SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
In the Matter of :
CENTRAL AND SOUTH WEST CORPORATION, CERTIFICATE
et al. :
OF
File No. 70-8979 :
: NOTIFICATION
(Public Utility Holding Company Act of 1935) :
:
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Central and South West Corporation ("CSW") and its subsidiary
companies Central Power and Light Company ("CPL"), Public Service Company of
Oklahoma ("PSO"), Southwestern Electric Power Company ("SWEPCO") and West Texas
Utilities Company ("WTU"), each sometimes referred to as an "Operating
Subsidiary" and collectively referred to as the "Operating Subsidiaries", hereby
certify, pursuant to Rule 24, that:
1. On March 18, 1997, CSW offered to purchase the 4.20% Series and
4.00% Series of preferred stock of CPL and all the outstanding series
of preferred stock of PSO, SWEPCO and WTU. Each offer was scheduled to
expire at 5:00 pm central time, Wednesday, April 16, 1997. The offer
to purchase all of the shares of PSO and SWEPCO expired and the
tendered shares were accepted for payment on April 16, 1997. On April
23, 1997, CSW paid for 53,203 shares of PSO's 4.00% Series and 91,931
shares of PSO's 4.24% Series and 52,614 shares of SWEPCO's 4.28%
Series, 23,092 shares of SWEPCO's 4.65% Series, 37,228 shares of
SWEPCO's 5.00% Series and 41,990 shares of SWEPCO's 6.95% Series
tendered pursuant to CSW's offer and subsequently resold the shares to
SWEPCO and PSO for cancellation and retirement.
CSW's offers to purchase the 4.20% Series and 4.00% Series of
preferred stock of CPL and the outstanding series of preferred stock
of WTU were extended until 10:00 am central time, Monday, April 28,
1997. The offers to purchase the 4.20% Series and 4.00% Series of
preferred stock of CPL and the outstanding series of preferred stock
of WTU expired and the tendered shares were accepted for payment on
April 28, 1997. On May 1, 1997, CSW paid for 57,524 shares of CPL's
4.20% Series and 57,952 shares of CPL's 4.00% Series and 36,306 shares
of WTU's 4.40% Series tendered pursuant to CSW's offer and
subsequently resold the shares to CPL and WTU for cancellation and
retirement.
2. On March 18, 1997, CPL, PSO, SWEPCO and WTU began a proxy
solicitation of each of their outstanding preferred shareholders
seeking approval to amend their respective Articles of Incorporation,
in the case of CPL and WTU, or their Certificate of Incorporation, in
the case of PSO and SWEPCO, to remove a provision limiting the amount
of unsecured debt each Operating Subsidiary could issue.
3. On April 7, 1997, a special meeting of shareholders was held at the
corporate offices of CPL in Corpus Christi, Texas. At this meeting a
vote on the proposed amendment was held. Approximately 75% of the
preferred shares and 100% of the common shares were voted in favor of
the amendment. The presiding officer declared that the amendment was
passed and the special meeting was adjourned.
4. On April 16, 1997, special meetings of shareholders were held at
the corporate offices of PSO, SWEPCO and WTU in Tulsa, Oklahoma,
Shreveport, Louisiana and Abilene, Texas, respectively. At the special
meetings for PSO and SWEPCO, a vote on the proposed amendments was
held. More than 82% of PSO's preferred shares and 100% of PSO's common
shares voted in favor of the amendment. More than 91% of SWEPCO's
preferred shares and 100% of SWEPCO's common shares voted in favor of
the amendment. The presiding officer at each special meeting declared
that the amendment was passed and the special meetings were adjourned.
By vote of the preferred and common shareholders the special meeting
for WTU was adjourned until April 28, 1997.
On April 28, 1997, the special meeting was reconvened at WTU's
corporate offices in Abilene, Texas. A quorum of both the preferred
and common shareholders was present. During this meeting, a vote on
the proposed amendment was held. More than 73% of the preferred shares
and 100% of the common shares voted in favor of the amendment. The
presiding officer declared that the amendment was passed and the
special meeting was adjourned.
5. On April 24, 1997, PSO Capital I, a Delaware statutory business
trust, entered into an underwriting agreement (the "PSO Underwriting
Agreement") with Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated and Smith
Barney Inc. for the negotiated sale of $75,000,000 of 8% Trust
Originated Preferred Securities, Series A due April 30, 2037 (the "PSO
Preferred Securities").
On May 2, 1997, the Indenture (the "PSO Indenture") and the First
Supplemental Indenture (the "PSO Supplemental Indenture") each dated
May 1, 1997, between PSO and The Bank of New York, as Trustee,
pursuant to which PSO issued $77,320,000 of its 8% Junior Subordinated
Deferrable Interest Debentures, Series A, were executed by the parties
thereto.
On May 2, 1997, the Amended and Restated Trust Agreement (the "PSO
Trust Agreement") dated May 1, 1997, between PSO and The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee and the Administrative Trustees named therein, was
executed by the parties thereto.
On May 2, 1997, the Guarantee Agreement (the "PSO Guarantee
Agreement") dated May 1, 1997, between PSO and The Bank of New York,
as Trustee, was executed by the parties thereto.
On May 2, 1997, PSO Capital I issued, sold and delivered to the
Underwriters the PSO Preferred Securities.
6. On April 30, 1997, SWEPCO Capital I, a Delaware statutory business
trust, entered into an underwriting agreement (the "SWEPCO
Underwriting Agreement") with Smith Barney Inc., Dean Witter Reynolds
Inc., Goldman, Sachs & Co., and Morgan Stanley & Co. Incorporated for
the negotiated sale of $110,000,000 of 7.875% Trust Preferred
Securities, Series A due April 30, 2037 (the "SWEPCO Preferred
Securities").
On May 8, 1997, the Indenture (the "SWEPCO Indenture") and the First
Supplemental Indenture (the "SWEPCO Supplemental Indenture") each
dated May 1, 1997, between SWEPCO and The Bank of New York, as
Trustee, pursuant to which SWEPCO issued $113,402,075 of its 7.875%
Junior Subordinated Deferrable Interest Debentures, Series A, were
executed by the parties thereto. On May 8, 1997, the Amended and
Restated Trust Agreement (the "SWEPCO Trust Agreement") dated May 1,
1997, between SWEPCO and The Bank of New York, as Property Trustee,
The Bank of New York (Delaware), as Delaware Trustee and the
Administrative Trustees named therein, was executed by the parties
thereto.
On May 8, 1997, the Guarantee Agreement (the "SWEPCO Guarantee
Agreement") dated May 1, 1997, between SWEPCO and The Bank of New
York, as Trustee, was executed by the parties thereto.
On May 8, 1997, SWEPCO Capital I issued, sold and delivered to the
Underwriters the SWEPCO Preferred Securities.
7. On May 8, 1997, CPL Capital I, a Delaware statutory business trust,
entered into an underwriting agreement (the "CPL Underwriting
Agreement") with Goldman, Sachs & Co., Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Smith Barney Inc. for
the negotiated sale of $150,000,000 of 8.00% Cumulative Quarterly
Income Preferred Securities, Series A due April 30, 2037 (the "CPL
Preferred Securities").
On May 14, 1997, the Indenture (the "CPL Indenture") and the First
Supplemental Indenture (the "CPL Supplemental Indenture") each dated
May 1, 1997, between CPL and The Bank of New York, as Trustee,
pursuant to which CPL issued $154,639,200 of its 8.00% Junior
Subordinated Deferrable Interest Debentures, Series A, were executed
by the parties thereto.
On May 14, 1997, the Amended and Restated Trust Agreement (the "CPL
Trust Agreement") dated May 1, 1997, between CPL and The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as
Delaware Trustee and the Administrative Trustees named therein, was
executed by the parties thereto.
On May 14, 1997, the Guarantee Agreement (the "CPL Guarantee
Agreement") dated May 1, 1997, between CPL and The Bank of New York,
as Trustee, was executed by the parties thereto.
On May 14, 1997, CPL Capital I issued, sold and delivered to the
Underwriters the CPL Preferred Securities.
8. The above described transactions have been carried out in
accordance with the terms and conditions of, and for the purpose
represented in, the Form U-1 Application-Declaration of the Company in
File No. 70-8979, and in accordance with the terms and conditions of
the Commission's order dated March 17, 1997, and the Commission's
Supplemental Order dated April 10, 1997.
<PAGE>
The following exhibits are filed herewith:
Exhibit 8(a) - PSO Indenture (incorporated by reference to PSO's
Form 10-Q for the quarter ended March 31, 1997, ITEM
6(a)(4)(6)).
Exhibit 8(b)- SWEPCO Indenture (incorporated by reference to
SWEPCO's Form 10-Q for the quarter ended March 31, 1997,
ITEM 6(a) (4)(11)).
Exhibit 8(c) - CPL Indenture (incorporated by reference to CPL's
Form 10-Q for the quarter ended March 31, 1997, ITEM
6(a)(4)(1)).
Exhibit 9(a) - PSO Supplemental Indenture (incorporated by reference
to PSO's Form 10-Q for the quarter ended March 31, 1997,
ITEM 6(a)(4)(7)).
Exhibit 9(b)- SWEPCO Supplemental Indenture (incorporated by
reference to SWEPCO's Form 10-Q for the quarter ended March
31, 1997, ITEM 6(a)(4)(12)).
Exhibit 9(c) - CPL Supplemental Indenture (incorporated by reference
to CPL's Form 10-Q for the quarter ended March 31, 1997,
ITEM 6(a)(4)(2)).
Exhibit 10(a) -PSO Guarantee (incorporated by reference to PSO's
Form 10-Q for the quarter ended March 31, 1997, ITEM
6(a)(4)(9)).
Exhibit 10(b) -SWEPCO Guarantee (incorporated by reference to
SWEPCO's Form 10-Q for the quarter ended March 31, 1997,
ITEM 6(a) (4)(14)).
Exhibit 10(c) -CPL Guarantee (incorporated by reference to CPL's
Form 10-Q for the quarter ended March 31, 1997, ITEM
6(a)(4)(4)).
Exhibit 11(a) -PSO Underwriting Agreement dated April 24, 1997.
Exhibit 11(b) -SWEPCO Underwriting Agreement dated April 30, 1997.
Exhibit 11(c) -CPL Underwriting Agreement dated May 8, 1997.
Exhibit 16 -Final or "past tense" opinion of Milbank, Tweed, Hadley
& McCloy, counsel to the company, dated May 27, 1997.
Exhibit 17 -Application by PSO to the Corporation Commission of the
State of Oklahoma for authority to issue and sell
Debentures.
Exhibit 18 -Order of State Commission referred to in Exhibit 17.
Exhibit 19(a) -Copy of the Prospectus Supplement dated April 24,
1997 with respect to the PSO Preferred Securities, and the
accompanying Prospectus dated April 7, 1997 (filed
electronically April 25, 1997, in File Nos. 333-21153 and
333-21153-01).
Exhibit 19(b) -Copy of the Prospectus Supplement dated April 30,
1997 with respect to the SWEPCO Preferred Securities, and
the accompanying Prospectus dated April 7, 1997 (filed
electronically May 7, 1997, in File Nos. 333-21155 and
333-21155-01).
Exhibit 19(c) -Copy of the Prospectus Supplement dated May 8, 1997
with respect to the CPL Preferred Securities, and the
accompanying Prospectus dated April 14, 1997 (filed
electronically May 12, 1997, in File Nos. 333-21149 and
333-21149-01).
<PAGE>
S I G N A T U R E
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, as amended, the undersigned company has duly caused this document to be
signed on its behalf by the undersigned thereunto duly authorized.
Dated: May 28, 1997
CENTRAL POWER AND LIGHT COMPANY
By: /s/ Wendy G. Hargus
Wendy G. Hargus
Treasurer
<PAGE>
EXHIBIT INDEX
EXHIBIT TRANSMISSION
NUMBER EXHIBITS METHOD
8(a) PSO Indenture (incorporated by reference to
PSO's Form 10-Q for the quarter ended
March 31, 1997, ITEM 6(a)(4)(6)). --
8(b) SWEPCO Indenture (incorporated by reference to
SWEPCO's Form 10-Q for the quarter ended
March 31, 1997, ITEM 6(a)(4)(11)). --
8(c) CPL Indenture (incorporated by reference to CPL's
Form 10-Q for the quarter ended March 31, 1997,
ITEM 6(a)(4)(1)). --
9(a) PSO Supplemental Indenture (incorporated by reference
to PSO's Form 10-Q for the quarter ended March 31,
1997, ITEM 6(a)(4)(7)). --
9(b) SWEPCO Supplemental Indenture (incorporated by
reference to SWEPCO's Form 10-Q for the quarter
ended March 31, 1997, ITEM 6(a)(4)(12)). --
9(c) CPL Supplemental Indenture (incorporated by
reference to CPL's Form 10-Q for the quarter
ended March 31, 1997, ITEM 6(a)(4)(2)). --
10(a) PSO Guarantee (incorporated by reference to PSO's
Form 10-Q for the quarter ended March 31, 1997,
ITEM 6(a)(4)(9)). --
10(b) SWEPCO Guarantee (incorporated by reference to
SWEPCO's Form 10-Q for the quarter ended
March 31, 1997, ITEM 6(a)(4)(14)). --
10(c) CPL Guarantee (incorporated by reference to CPL's
Form 10-Q for the quarter ended March 31, 1997,
ITEM 6(a)(4)(4)). --
11(a) PSO Underwriting Agreement dated April
24, 1997. Electronic
11(b) SWEPCO Underwriting Agreement dated April
30, 1997. Electronic
11(c) CPL Underwriting Agreement dated May 8, 1997. Electronic
16 Final or "past tense" opinion of Milbank,
Tweed, Hadley & McCloy, counsel to the Company,
dated May 27, 1997. Electronic
17 Application by PSO to the Corporation Commission
of the State of Oklahoma for authority to issue
and sell Debentures. Electronic
18 Order of State Commission referred to in
Exhibit 17. Electronic
19(a) Copy of the Prospectus Supplement dated April 24, 1997
with respect to the PSO Preferred Securities, and the
accompanying Prospectus dated April 7, 1997 (filed
electronically April 25, 1997, in File Nos. 333-21153
and 333-21153-01). --
19(b) Copy of the Prospectus Supplement dated April 30, 1997
with respect to the SWEPCO Preferred Securities, and
the accompanying Prospectus dated April 7, 1997 (filed
electronically May 7, 1997, in File Nos. 333-21155 and
333-21155-01). --
19(c) Copy of the Prospectus Supplement dated May 8, 1997
with respect to the CPL Preferred Securities, and the
accompanying Prospectus dated April 14, 1997 (filed
electronically May 12, 1997, in File Nos. 333-21149 and
333-21149-01). --
Exhibit 11(a)
PSO Capital I
Trust Originated Preferred Securities SM ("TOPrS"SM)*
(liquidation preference $25 per preferred security)
guaranteed by
Public Service Company of Oklahoma
Underwriting Agreement
April 24, 1997
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Smith Barney Inc.,
c/o Merrill Lynch & Co.
World Financial Center - North Tower,
New York, New York 10281
Ladies and Gentlemen:
From time to time, PSO Capital I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust") and Public Service Company
of Oklahoma, an Oklahoma corporation, as depositor of the Trust and as guarantor
(the "Guarantor"), each proposes to enter into one or more Pricing Agreements
(each a "Pricing Agreement") in the form of Annex I hereto, with such additions
and deletions as the parties thereto may determine, and, subject to the terms
and conditions stated herein and therein, to issue and sell to the firms named
in Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of the Trust's Trust Originated Preferred
SecuritiesSM (liquidation preference $25 per preferred security) (the
"Securities") representing undivided beneficial interests in the assets of the
Trust, guaranteed by the Guarantor as to the payment of distributions, and as to
payments on liquidation or redemption, as set forth in a guarantee agreement
(the "Guarantee") between the Guarantor and The Bank of New York, as trustee
(the "Guarantee Trustee"). The Securities represented by such Pricing Agreement
are referred to as the "Designated Securities" with respect to such Pricing
Agreement. The proceeds of the sale of the Securities and certain of the Trust's
Common Securities (liquidation preference $25 per common security) (the "Common
Securities") by the Trust are to be invested in Junior Subordinated Deferrable
Interest Debentures (the "Subordinated Debentures") of the Guarantor, to be
issued pursuant to an Indenture (the "Indenture") between the Guarantor and The
Bank of New York, as trustee (the "Debenture Trustee"), as heretofore
supplemented and amended, including by the supplemental indenture relating to
the Subordinated Debentures in which the proceeds of the sale of the Designated
Securities are to be invested.
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Trust to sell any of the Securities or as an obligation of
any of the Underwriters to purchase any of the Securities. The obligation of the
Trust to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate number of Designated Securities,
the initial public offering price of such Securities or the manner of
determining such price, the terms of the Designated Securities, the purchase
price to the Underwriters of such Designated Securities, the names of the
Underwriters of such Designated Securities, the names of the Representatives of
such Underwriters, the number of such Designated Securities to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Securities, and payment therefor. The Pricing Agreement shall also specify
(to the extent not set forth in the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. Each of the Guarantor and the Trust, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-21153),
as amended by Amendment No. 1 thereto (the "Initial Registration
Statement"), in respect of the Securities, the Guarantee and the
Subordinated Debentures (collectively, the "Registered Securities"),
including a prospectus relating to the Registered Securities, and the
offering thereof from time to time in accordance with Rule 415 under
the Securities Act of 1933, as amended (the "Act"), has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to such registration statement
but including all documents incorporated by reference in the prospectus
included therein, to the Representatives for each of the other
Underwriters has been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Act, which becomes effective upon
filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424 of the rules and regulations of
the Commission under the Act, each in the form heretofore delivered to
the Representatives); and no stop order suspending the effectiveness of
the Initial Registration Statement, and post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened, to the knowledge of the Guarantor or the Trust, by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) under the Act, is hereinafter called a "Preliminary Prospectus";
the various parts of the Initial Registration Statement and the 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective (but excluding Form T-1) or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, each as amended at the time such part of
the Initial Registration Statement became effective, are hereinafter
collectively called the "Registration Statement"; the prospectus
relating to the Registered Securities in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under
the Act, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the
Guarantor filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in relation to
the applicable Designated Securities in the form in which it is filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing).
(b) The documents incorporated by reference in the Prospectus
as amended or supplemented, when they became effective or were filed
with the Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder,
and none of such documents contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Trust or
the Guarantor by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(c) The Registration Statement, as of its effective date, and
the Prospectus, at the time it is filed with the Commission, conform
and will conform, as the case may be, and any further amendments or
supplements to the Registration Statement or the Prospectus will
conform, in all material respects with the applicable requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
thereunder; neither the Registration Statement, nor any amendment
thereto, as of the applicable effective date, contains an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and the Prospectus and any amendment or supplement thereto
at the time it is filed with the Commission, does not include and will
not include an untrue statement of a material fact and does not omit
and will not omit to state a material fact necessary to make the
statements therein in light of the circumstances under which they were
made not misleading; provided, however, that this representation and
warranty shall not apply to the part of the Registration Statement that
constitutes the statement of eligibility on Form T-1 under the Trust
Indenture Act of the Property Trustee, the Delaware Trustee and the
Guarantor Trustee and any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Trust or
the Guarantor by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(d) Since the respective dates as of which information is
given in the Registration Statement and in the Prospectus as amended or
supplemented, there has been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor and its subsidiaries, taken as a whole, or
(ii) adverse development concerning the business or assets of the
Guarantor and its subsidiaries, taken as a whole, which would result in
a material adverse change in the prospective financial condition or
results of operations of the Guarantor and its subsidiaries, taken as a
whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended or supplemented
(including the financial statements and notes thereto included or
incorporated by reference therein).
(e) The Trust has been duly created and is validly existing as
a statutory business trust in good standing under the Business Trust
Act of the State of Delaware (the "Delaware Business Trust Act") with
the power and authority to own its properties and conduct its business
as described in the Prospectus as amended or supplemented, and the
Trust has conducted and will conduct no business in the future that
would be inconsistent with the description of the Trust set forth in
the Prospectus as amended or supplemented; the Trust is not a party to
or bound by any agreement or instrument other than this Agreement, the
Trust Agreement (the "Trust Agreement") between the Guarantor and the
trustees named therein (the "Trustees"), the Trust Certificate (as
hereinafter defined) and the agreements and instruments contemplated by
the Trust Agreement; the Trust has no liabilities or obligations other
than those arising out of the transactions contemplated by this
Agreement and the Trust Agreement and described in the Prospectus;
based on current law, the Trust is not classified as an association
taxable as a corporation for United States federal income tax purposes;
and the Trust is not a party to or subject to any action, suit or
proceeding of any nature.
(f) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Oklahoma, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus as amended or
supplemented, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business so as to require such qualification except where
the failure to so qualify would not have a material adverse effect on
the financial condition of the Guarantor and its subsidiaries, taken as
a whole.
(g) The Guarantor has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Guarantor have been duly and validly authorized and issued and
are fully paid and non-assessable.
(h) The Guarantor has no significant subsidiaries, as
"significant subsidiary" is defined in Rule 405 of Regulation C of the
rules and regulations promulgated by the Commission under the Act.
(i) This Agreement has been duly authorized, executed and
delivered by each of the Guarantor and the Trust.
(j) The Securities have been duly and validly authorized by
the Trust in accordance with the Trust Agreement, and, when issued and
delivered pursuant to this Agreement and the Pricing Agreement with
respect to such Designated Securities, such Designated Securities, will
be duly and validly issued and fully paid and non-assessable undivided
beneficial interests in the assets of the Trust and be entitled to the
benefits of the Trust Agreement; the Securities conform in all material
respects to the description thereof contained in the Registration
Statement and the Designated Securities will conform in all material
respects to the description thereof contained in the Prospectus as
amended or supplemented; the issuance of the Securities is not subject
to preemptive or other similar rights; and the terms of the Securities
are valid and binding on the Trust; the Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General Corporation
Law of the State of Delaware.
(k) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending
or, to the knowledge of the Guarantor, threatened to which the
Guarantor or any of its subsidiaries is a party or to which any of the
properties of the Guarantor or any of its subsidiaries is subject,
which are required to be described in the Prospectus, as amended or
supplemented; and there are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus as amended or supplemented or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) The Guarantor (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would
not, singly or in the aggregate, have a material adverse effect on the
Guarantor and its subsidiaries, taken as a whole.
(m) The Common Securities have been duly and validly
authorized by the Trust in accordance with the Trust Agreement and upon
issuance and delivery by the Trust to the Guarantor against payment
therefor as described in the Prospectus, will be duly and validly
issued and fully paid and non-assessable undivided beneficial interests
in the assets of the Trust and be entitled to the benefits of the Trust
Agreement; the Common Securities conform in all material respects to
the description thereof contained in the Prospectus as amended or
supplemented; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Time of Delivery (as
defined in Section 4 hereof), all of the issued and outstanding Common
Securities of the Trust will be directly owned by the Guarantor free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(n) The Guarantee Agreement has been duly and validly
authorized by the Guarantor and when executed and delivered by the
Guarantor and by the Guarantee Trustee will have been duly executed and
delivered and will constitute a valid and legally binding obligation of
the Guarantor enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law); and the Guarantee
Agreement has been qualified under the Trust Indenture Act.
(o) The Subordinated Debentures have been duly and validly
authorized by the Guarantor and when executed, authenticated and
delivered in accordance with the Indenture will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Guarantor enforceable in
accordance with their terms, except as limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization and other similar
laws relating to or affecting creditors' rights generally and general
equitable principles (whether considered in a proceeding in equity or
at law) and the Subordinated Debentures are entitled to the benefits of
the Indenture.
(p) The Trust Agreement has been duly and validly authorized
by the Guarantor and when executed and delivered by the Guarantor and
by the Administrative Trustees will have been duly executed and
delivered and will constitute a valid and legally binding obligation of
the Guarantor enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law); and the Trust
Agreement has been qualified under the Trust Indenture Act.
(q) The Indenture has been duly and validly authorized by the
Guarantor and when executed and delivered by the Guarantor and the
Debenture Trustee will have been duly executed and delivered and will
constitute a valid and legally binding obligation of the Guarantor
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in
equity or at law); and the Indenture has been qualified under the Trust
Indenture Act.
(r) The Expense Agreement between the Guarantor and the Trust
(the "Expense Agreement") has been duly and validly authorized by the
Guarantor and when executed and delivered by the Guarantor and the
Trust, will have been duly executed and delivered and will constitute a
valid and legally binding obligation of the Guarantor enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization and other similar laws relating
to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
(s) The Commission has entered an order (the "Order") under
the Public Utility Holding Company Act of 1935, as amended (the "1935
Act"), permitting to become effective the Form U-1
Application-Declaration filed by the Guarantor authorizing the creation
of the Trust, the issue and sale of the Securities by the Trust, the
issuance and delivery of the Common Securities by the Trust, the
issuance and sale of the Subordinated Debentures by the Guarantor and
the execution, delivery and performance of the Guarantee. A copy of
such order heretofore entered by the Commission has been or will be
delivered to Merrill Lynch, Pierce, Fenner & Smith Incorporated on
behalf of the Representatives.
(t) The Corporation Commission of Oklahoma has entered an
order authorizing or approving, among other things, the issuance and
sale of the Securities by the Company. A copy of such order heretofore
entered by the Commission has been or will be delivered to Merrill
Lynch, Pierce, Fenner & Smith Incorporated on behalf of the
Representatives.
(u) The issue and sale of the Securities and the Common
Securities by the Trust, the compliance by the Trust with all of the
provisions of this Agreement and any Pricing Agreement, the execution,
delivery and performance by the Trust of the Expense Agreement, the
purchase of the Subordinated Debentures by the Trust, and the
consummation of the transactions contemplated herein and therein will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture or
other material agreement or instrument to which the Trust is a party or
by which the Trust is bound or to which any of the property or assets
of the Trust is subject, nor will such action result in any violation
of the provisions of the Certificate of Trust of the Trust or the Trust
Agreement or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Trust or
any of its properties; and no consent, approval, authorization, order,
license, certificate, permit, registration or qualification of or with
any such court or governmental agency or body, other than the Order and
the order of the Corporation Commission of Oklahoma, which have been
duly obtained and are in full force and effect, is required, for the
issue and sale of the Securities and the Common Securities by the
Trust, the purchase of the Subordinated Debentures by the Trust or the
consummation by the Trust of the transactions contemplated by this
Agreement or any Pricing Agreement, except such as have been, or will
have been prior to the Time of Delivery (as defined in Section 4
hereof), obtained under the Act and the Exchange Act, of the Registered
Securities and the Securities, respectively, the qualification of the
Trust Agreement, the Indenture and the Guarantee under the Trust
Indenture Act, and such consents, approvals, authorizations, orders,
licenses, certificates, permits, registrations or qualifications as
have already been obtained, or as may be subsequently obtained in the
ordinary course of business, or as may be required under state
securities or Blue Sky laws in connection with the purchase of the
Securities and the distribution of the Securities by the Underwriters.
(v) The issuance by the Guarantor of the Guarantee, the
compliance by the Guarantor with all of the provisions of this
Agreement and any Pricing Agreement, the execution, delivery and
performance by the Guarantor of the Guarantee Agreement, the
Subordinated Debentures, the Trust Agreement, the Indenture and the
Expense Agreement, and the consummation of the transactions
contemplated herein and therein will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture or other material agreement or
instrument to which the Guarantor or any of its subsidiaries is a party
or by which the Guarantor or any of its subsidiaries is bound or to
which any of the property or assets of the Guarantor or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the Restated Certificate of Incorporation or
by-laws of the Guarantor or the charter or by-laws of any of its
subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Guarantor or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, license, certificate, permit,
registration or qualification of or with any such court or other
governmental agency or body, other than the Order and the order of the
Corporation Commission of the State of Oklahoma, which have been duly
obtained and are in full force and effect, is required for the issue of
the Guarantee or the consummation by the Guarantor of the other
transactions contemplated by this Agreement or any Pricing Agreement,
except the registration under the Act of the Registered Securities, the
qualification of the Trust Agreement, the Indenture and the Guarantee
Agreement under the Trust Indenture Act and such consents, approvals,
authorizations, orders, licenses, certificates, permits, registrations
or qualifications as have already been obtained, or as may be
subsequently obtained in the ordinary course of business, or as may be
required under state securities or Blue Sky laws and in connection with
the purchase of the Securities and distribution of the Securities by
the Underwriters.
(w) Neither the Trust nor the Guarantor is in violation of its
organizational documents or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any indenture or other material agreement or instrument to which it
is a party or by which it or any of its properties may be bound.
(x) Neither the Trust nor the Guarantor is, and after giving
effect to the offering and sale of the Securities, neither the Trust
nor the Guarantor will be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(y) There are no contracts, agreements or understandings
between the Trust or the Guarantor and any person that grant such
person the right to require the Trust or the Guarantor to file a
registration statement under the Act with respect to any undivided
beneficial interests in the assets of the Trust or any capital stock of
the Guarantor owned or to be owned by such person or to require the
Trust or the Guarantor to include such securities in the securities
registered pursuant to the Registration Statement.
(z) Arthur Andersen LLP, who have certified certain financial
statements of the Guarantor and the Guarantor's subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities, the several Underwriters propose to offer the Designated
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
4. Certificates for the Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto, in the form
specified in such Pricing Agreement, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Trust, shall be delivered by or on behalf
of the Trust to the Representatives for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor in
immediately available funds by wire transfer to an account designated in writing
by the Trust as specified in such Pricing Agreement, all in the manner and at
the place and time and date as the Representatives and the Trust may agree upon
in writing, such time and date being herein called the "Time of Delivery".
5. Each of the Trust and the Guarantor, jointly and severally, agrees
with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities, or, if
applicable, such time as may be required by Rule 424(b) under the Act;
to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Securities and prior to any Time
of Delivery for such Securities which shall be disapproved in writing
by the Representatives for such Securities promptly after reasonable
notice thereof; to advise the Representatives promptly of any such
amendment or supplement after any Time of Delivery for such Securities
and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required
to be filed by the Trust or the Guarantor with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long
as the delivery of a prospectus is required in connection with the
offering or sale of such Securities, and during such same period to
advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of the Registered Securities for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, promptly to use its
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith
neither the Trust nor the Guarantor shall be required to qualify as a
foreign corporation or trust or to qualify as a dealer in Securities or
to file any general consents to service of process in any jurisdiction;
(c) To use its best efforts to furnish, prior to 12:00 noon,
New York City time, on the New York Business Day next succeeding the
date of the applicable Pricing Agreement and from time to time during
the period when a prospectus is required to be delivered under the Act
by any Underwriter or dealer, the Underwriters with copies of the
Prospectus as amended or supplemented in New York City in such
quantities as the Representatives may reasonably request, and if, in
the reasonable opinion of counsel to the Guarantor, the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would in the reasonable opinion of counsel for the
Guarantor include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such period to amend or supplement
the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply in the
reasonable opinion of counsel for the Guarantor with the Act or the
Exchange Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus, if any, which will
correct such statement or omission or effect such compliance;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Guarantor and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Guarantor, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the earlier of (i) the date, after the Time of Delivery, on
which the distribution of the Securities ceases, as determined by the
Representatives on behalf of the Underwriters, and (ii) 30 days after
the Time of Delivery for such Designated Securities, not to offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Trust, any other beneficial interests
of the Trust, or any preferred securities or any other securities of
the Trust or the Guarantor, as the case may be, that are substantially
similar to the Designated Securities, including the Guarantee, and
including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive securities,
preferred securities or any such substantially similar securities of
either the Trust or the Guarantor, without the prior consent of the
Representatives;
(f) To issue the Guarantee concurrently with the issue
and sale of the Securities as contemplated herein;
(g) To use its best efforts to list, subject to notice of
issuance, the Securities on the New York Stock Exchange; and
(h) If the Trust and the Guarantor elect to rely upon Rule
462(b), to file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m. Washington,
D.C. time, on the date of the applicable Pricing Agreement, and at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
6. The Guarantor covenants and agrees with the several Underwriters
that it will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Trust's and the Guarantor's counsel and accountants in
connection with the registration of the Registered Securities under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers, excluding the fees and disbursements of
counsel for the Underwriters, except as set forth in clause (iii) below and
Section 11 hereof; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, any Pricing Agreement, the Indenture, the
Guarantee, any Blue Sky Memorandum and any other documents in connection with
the offering, purchase, sale and delivery of the Registered Securities; (iii)
all expenses in connection with the qualification of the Registered Securities
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky surveys,
not exceeding however $6,000 in the aggregate; (iv) any fees charged by
securities rating services for rating the Securities; (v) the cost and charges
of the transfer agent or registrar; (vi) the cost of qualifying the Securities
with The Depository Trust Company; (vii) all reasonable fees and expenses of the
Trustees, the Debenture Trustee, the Guarantee Trustee and their counsel; (viii)
all fees and expenses in connection with the listing of the Securities on the
New York Stock Exchange and the cost of registering the Securities under Section
12 of the Exchange Act; and (ix) the cost of preparing certificates for the
Securities and the Subordinated Debentures. It is understood, however, that,
except as provided in this Section and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Trust and the
Guarantor in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the Trust and the
Guarantor shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Trust and the Guarantor
have elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m. Washington, D.C.
time, on the date of the applicable Pricing Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or, to the knowledge of the Guarantor or the
Representatives, threatened by the Commission;
(b) Sidley & Austin, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions (a draft of
each such opinion is attached as Annex II(a) hereto), dated each Time
of Delivery for such Designated Securities, with respect to: the
incorporation of the Guarantor; insofar as the federal laws of the
United States or the General Corporation Law of the State of Delaware
is concerned, the validity of the Registered Securities and the
Subordinated Debentures; the Registration Statement and the Prospectus;
and other related matters as the Representatives may reasonably
request; and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) Richards, Layton & Finger, P.A., special Delaware counsel
for the Guarantor and the Trust, shall have furnished to the
Representatives their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(d) Milbank, Tweed, Hadley & McCloy, counsel for the Trust and
the Guarantor, shall have furnished to the Representatives their
written opinion (a draft of such opinion is attached as Annex II(c)
hereto), dated each Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives, to the effect
set forth in such Annex;
(e) Christy & Viener, special tax counsel for the Guarantor
and the Trust, shall have furnished to the Representatives their
written opinion (a draft of such opinion is attached as Annex II(d)
hereto), dated each Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives, to the effect
set forth in such Annex;
(f) Doerner, Saunders, Daniel & Anderson, special Oklahoma
counsel for the Guarantor and the Trust, shall have furnished to the
Representatives their written opinion (a draft of such opinion is
attached as Annex II(e) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(g) Wagstaff, Alvis, Stubbeman, Seamster & Longacre, L.L.P.,
special Texas counsel for the Guarantor and the Trust, shall have
furnished to the Representatives their written opinion (a draft of such
opinion is attached as Annex II(f) hereto), dated each Time of Delivery
for such Designated Securities, in form and substance satisfactory to
the Representatives, to the effect set forth in such Annex;
(h) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to the Designated Securities and at each Time of Delivery
for such Designated Securities, Arthur Andersen LLP shall have
furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed
with the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex III hereto,
and with respect to such letter dated such Time of Delivery, as to such
other matters as the Representatives may reasonably request and in form
and substance satisfactory to the Representatives; (a draft of the form
of letter to be delivered at a time prior to the execution of the
Pricing Agreement, on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery
may be attached as Annex III hereto);
Subsequent to the respective dates as of which information is
given in each of the Registration Statement and the Prospectus, there
shall not have been any change or decrease specified in the letters
required by subsection (g) of this Section 7 which is, in the judgment
of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the
delivery of the Designated Securities as contemplated by the
Registration Statement and the Prospectus;
(i) The Trust Agreement, the Guarantee and the Indenture shall
have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives;
(j) Since the respective dates as of which information is
given in each of the Registration Statement and in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities there shall have been no (i) material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Guarantor and its subsidiaries, taken as
a whole, or (ii) any adverse development concerning the business or
assets of the Guarantor and its subsidiaries, taken as a whole, which
would result in a material adverse change in the prospective financial
condition or results of operations of the Guarantor and its
subsidiaries, taken as a whole, except such changes as are set forth or
contemplated in such Registration Statement or the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities (including the financial statements and notes
thereto included or incorporated by reference in the Registration
Statement);
(k) On or after the date of the Pricing Agreement relating to
the Designated Securities no downgrading shall have occurred in the
rating accorded the Securities or the Guarantor's debt securities or
preferred stock by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act;
(l) On or after the date of the Pricing Agreement relating to
the Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Guarantor's or the Trust's
securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either Federal or New York
State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
war, if the effect of any such event specified in this Clause (iv) in
the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in
the Prospectus as first amended or supplemented relating to the
Designated Securities;
(m) The Securities at each Time of Delivery shall have been
approved for listing, subject to notice of issuance, on the New York
Stock Exchange; and
(n) The Trust and the Guarantor shall have furnished or caused
to be furnished to the Representatives at each Time of Delivery for
Designated Securities certificates of officers or Administrative
Trustees of the Trust (as defined in the Trust Agreement), as
applicable, of the Guarantor and the Trust, satisfactory to the
Representatives, as to the accuracy of the representations and
warranties of the Trust and the Guarantor herein at and as of such Time
of Delivery, as to the performance by the Trust and the Guarantor of
all of their obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and
(j) of this Section and as to such other matters as the Representatives
may reasonably request.
8. (a) The Trust and the Guarantor, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Securities Act, the Exchange Act
or the common law or otherwise, and to reimburse each such Underwriter or such
controlling person for any reasonable legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) incurred by it or them in
connection with defending against any such losses, claims, damages or
liabilities, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Guarantor shall have furnished any amendments or supplements
thereto) or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the indemnity agreement contained in this
subsection (a) shall not apply to any such losses, claims, damages or
liabilities arising out of or based upon (i) any such untrue statement or
alleged untrue statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Trust or the Guarantor by any of the
Underwriters for use in the Registration Statement or the Prospectus or any
amendment or supplement to either thereof or (ii) the failure of any Underwriter
to deliver (either directly or through the Representatives) a copy of the
Prospectus (excluding the documents incorporated therein by reference), or of
the Prospectus as amended or supplemented after it shall have been amended or
supplemented by the Guarantor (excluding the documents incorporated therein by
reference), to any person to whom a copy of any preliminary prospectus shall
have been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have been sold by such Underwriter, as such delivery
may be required by the Securities Act and the rules and regulations of the
Commission thereunder.
(b) Each of the Underwriters, severally and not jointly, agrees to
indemnify and hold harmless the Trust and the Guarantor, each of their officers
who signs the Registration Statement, each of their directors, each person who
controls the Trust or the Guarantor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each other Underwriter and
each person, if any, who so controls such other Underwriter, from and against
any and all losses, claims, damages or liabilities, joint or several, to which
any one or more of them may become subject under the Securities Act, the
Exchange Act or the common law or otherwise, and to reimburse each of them for
any reasonable legal or other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in connection with defending
against any such losses, claims, damages or liabilities of the character above
specified arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus or any amendment to the Registration Statement or amendment or
supplement to the Prospectus or upon any omission or alleged omission to state
in any thereof a material fact required to be stated therein or necessary to
make the statements therein not misleading if such statement or omission was
made in reliance upon and in conformity with information furnished in writing to
the Trust or the Guarantor by such Underwriter for use in the Registration
Statement or the Prospectus or any amendment or supplement to either thereof or
(ii) the failure of such Underwriter, due to the negligence of such Underwriter,
to deliver (either directly or through the Representatives) a copy of the
Prospectus (excluding the documents incorporated therein by reference), or of
the Prospectus as amended or supplemented after it shall have been amended or
supplemented by the Guarantor (excluding the documents incorporated therein by
reference), to any person to whom a copy of any preliminary prospectus shall
have been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have sold by such Underwriter, as such delivery may
be required by the Securities Act and the rules and regulations of the
Commission thereunder.
(c) Promptly after receipt by a party indemnified under this Section 8
(an "indemnified party") of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against a
party granting an indemnity under this Section 8 (the "indemnifying party"),
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof (thereby conceding that the action in question is subject to
indemnification by the indemnifying party), with counsel reasonably satisfactory
to such indemnified party, and shall pay the fees and disbursements of such
counsel related to such action; provided, however, that if the defendants in any
such action include both the indemnified party and the indemnifying party and
representation of both parties would be inappropriate due to actual or potential
differing interests between them, the indemnified party or parties shall have
the right to select separate counsel. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel), approved by the
Representatives in the case of subsection (a), representing the indemnified
parties under subsection (a) who are parties to such action and that all such
fees and expenses shall be reimbursed as they are incurred) or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that such liability
shall be only in respect of the counsel referred to in clause (i) or (ii). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section 8 shall be
unenforceable under applicable law by an indemnified party, the Trust and the
Guarantor, jointly and severally, agree to contribute to such indemnified party
with respect to any and all losses, claims, damages and liabilities for which
such indemnification provided for in this Section 8 shall be unenforceable, in
such proportion as shall be appropriate to reflect the relative fault of the
Trust and the Guarantor on the one hand and the indemnified party on the other
hand in connection with the statements or omissions which have resulted in such
losses, claims, damages and liabilities, as well as any other relevant equitable
considerations; provided, however, that no indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from the Trust or the
Guarantor if the Trust or the Guarantor, respectively, is not guilty of such
fraudulent misrepresentation. Relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust or the Guarantor or the indemnified
party and each such party's relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Trust, the Guarantor and each of the Underwriters agree that it would not be
just and equitable if contribution pursuant to this subparagraph were to be
determined solely by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
(e) The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
(f) The indemnity and contribution agreements contained in this Section
8 and the representations and warranties of the Trust and the Guarantor in the
Underwriting Agreement shall remain operative and in full force regardless of
(i) any termination of the Underwriting Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Trust or the Guarantor, their directors or officers or
any person controlling the Trust or the Guarantor and (iii) acceptance of and
payment for any of the Designated Securities.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
twenty-four hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Trust and
the Guarantor shall be entitled to a further period of twenty-four hours within
which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
the Trust and the Guarantor that they have so arranged for the purchase of such
Designated Securities, or the Trust or the Guarantor notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Trust and the Guarantor shall have the
right to postpone a Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Trust and the Guarantor agree to file
promptly any amendments or supplements to the Registration Statement or the
Prospectus which may be required in the opinion of counsel for the Guarantor.
The term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and the Guarantor as provided in subsection (a)
above, the aggregate number of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate number of the
Designated Securities to be purchased at the respective Time of Delivery, then
the Trust and the Guarantor shall have the right to require each non-defaulting
Underwriter to purchase the number of Designated Securities which such
Underwriter agreed to purchase under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Designated
Securities which such Underwriter agreed to purchase under such Pricing
Agreement) of the Designated Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and the Guarantor as provided in subsection (a)
above, the aggregate number of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate number of Designated Securities to be
purchased at the respective Time of Delivery, as referred to in subsection (b)
above, or if the Trust and the Guarantor shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter, the
Trust or the Guarantor, except for the expenses to be borne by the Guarantor and
the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, the Guarantor and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Trust, the Guarantor or any officer, trustee or director or controlling person
of the Trust or the Guarantor, and shall survive delivery of and payment for the
Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, neither the Trust nor the Guarantor shall then be under any liability to
any Underwriter with respect to the Designated Securities with respect to which
such Pricing Agreement shall have been terminated except as provided in Sections
6 and 8 hereof; but, if any Pricing Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part of
the Trust or the Guarantor to comply with the terms or to fulfill any of the
conditions of the Pricing Agreement (excluding those conditions set forth in
Section 7(j) hereof), or if for any reason the Trust or the Guarantor shall be
unable to perform its obligations under the Pricing Agreement, the Trust and the
Guarantor will reimburse the Underwriters or such Underwriters who have so
terminated the Pricing Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of Underwriters'
counsel) reasonably incurred by such Underwriters in connection with the Pricing
Agreement or the offering contemplated thereunder. Neither the Trust nor the
Guarantor shall in any event be liable to any of the Underwriters for damages on
account of loss of anticipated profits.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Trust or the Guarantor shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Trust or the
Guarantor, respectively, set forth in the Registration Statement, Attention:
Secretary; provided, however that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Trust and the Guarantor by the Representatives upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Trust, the Guarantor
and, to the extent provided in Sections 8 and 10 hereof, the officers, trustees
and directors of the Guarantor and the Trust and each person who controls the
Trust, the Guarantor or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any such Pricing
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return to us eight counterparts hereof.
Very truly yours,
Public Service Company of Oklahoma
By:_____________________________
Name:
Title:
PSO Capital I
By: Public Service Company of Oklahoma,
as Depositor
By:____________________________
Name:
Title:
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Smith Barney Inc.
By:___________________________________
(Merrill Lynch, Pierce, Fenner
& Smith Incorporated)
On behalf of each of the Underwriters
<PAGE>
Annex I
Pricing Agreement
April 24, 1997
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Smith Barney Inc.,
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Merrill Lynch & Co.,
World Financial Center - North Tower
New York, New York 10281
Ladies and Gentlemen:
PSO Capital I, a statutory business trust formed under the laws of the
State of Delaware (the "Trust") and Public Service Company of Oklahoma, an
Oklahoma corporation (the "Guarantor"), each proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated April 24, 1997
(the "Underwriting Agreement"), among the Trust and the Guarantor on the one
hand and Merrill Lynch, Pierce Fenner & Smith Incorporated and Goldman, Sachs &
Co., Morgan Stanley & Co. Incorporated and Smith Barney Inc., on the other hand,
to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the "Designated
Securities"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust, at the time and place and
at the purchase price to the Underwriters set forth in Schedule II hereto, the
number of Designated Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Trust and the Guarantor. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Trust and the Guarantor for examination but without
warranty on the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
PSO Capital I
By:__________________________
Name:
Title:
Public Service Company of Oklahoma
By:____________________________
Name:
Title:
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Smith Barney Inc.
By:
(Merrill Lynch, Pierce, Fenner
& Smith Incorporated)
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Underwriter Number of
Designated Securities
to be Purchased
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..........................487,500
Goldman, Sachs & Co....................................487,500
Morgan Stanley & Co. Incorporated......................487,500
Smith Barney Inc.......................................487,500
Bear, Stearns & Co. Inc.................................75,000
Alex. Brown & Sons Incorporated.........................75,000
Cowen & Company.........................................75,000
Dain Bosworth Incorporated..............................75,000
Dean Witter Reynolds Inc................................75,000
A.G. Edwards & Sons, Inc................................75,000
EVEREN Securities, Inc..................................75,000
J.P. Morgan Securities Inc..............................75,000
The Ohio Company........................................75,000
Oppenheimer & Co., Inc..................................75,000
Piper Jaffray Inc.......................................75,000
Prudential Securities Incorporated......................75,000
Raymond James & Associates, Inc.........................75,000
Tucker Anthony Incorporated.............................75,000
Total................................................3,000,000
<PAGE>
SCHEDULE II
Title of Designated Securities:
8.00% Trust Originated Preferred Securities, Series A
Number of Designated Securities:
3,000,000
Initial Offering Price to Public:
$25.00 per Preferred Security
Commission Payable to Underwriters:
$0.7875 per Preferred Security; provided, that such commission will be $0.50 per
Preferred Security sold to certain institutions, in Federal (same day) Funds by
wire transfer
Form of Designated Securities:
Book-entry only form represented by one or more global securities deposited with
The Depository Trust Company ("DTC") or its designated custodian for trading in
the Same Day Funds Settlement System of DTC, and to be made available for
checking by the Representatives at least twenty-four hours prior to the Time of
Delivery at the office of DTC
Specified Funds for Payment of Purchase Price:
Federal (same day) Funds by wire transfer
Time of Delivery:
The Underwriters shall pay for, and the Designated Securities shall be
concurrently delivered, at the Closing Location at 10:00 a.m. (New York City
time), on May 2, 1997 or at such other place and time, not later than May 9,
1997, as shall be mutually agreed. In accordance with Rule 15c6-1(d) promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Underwriters agree to this alternative date for payment of funds and delivery of
the Designated Securities in lieu of that required by paragraphs (a) and (c) of
Rule 15c6-1 of the Exchange Act.
Closing Location:
Milbank, Tweed, Hadley & McCloy 1 Chase Manhattan Plaza New York, New York 10005
Names and addresses of Representatives:
Designated Representatives
Address for Notices, etc.:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch & Co.
World Financial Tower
North Tower
New York, New York 10281
Attention: Joseph Lance
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Don Hansen
Morgan Stanley & Co. Incorporated
1585 Broadway, 2nd Floor
New York, New York 10036
Attention: Debt Syndicate Department
Smith Barney Inc.
390 Greenwich Street
New York, New York 10013
Attention: Edward P. Meehan
<PAGE>
ANNEX III
Form of letter of Arthur Andersen LLP
to be delivered pursuant to Section 7(h)
Pursuant to Section 7(h) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Guarantor and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Prospectus or the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act,
as applicable, and the related published rules and regulations
thereunder, and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Guarantor for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representatives of the Underwriters
(the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or the Guarantor's quarterly reports on
Form 10-Q incorporated by reference into the Prospectus as indicated in
their reports thereon copies of which have been separately furnished to
the Representatives; and on the basis of specified procedures including
inquiries of officials of the Guarantor who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Guarantor for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Guarantor's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Guarantor's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of Items 301, 302,
402 and 503(d) respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Guarantor and its subsidiaries,
inspection of the minute books of the Guarantor and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Guarantor and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in the
Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Guarantor's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Guarantor's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included or incorporated by reference in the Prospectus) or
any increase in the consolidated long-term debt of the
Guarantor and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenue or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period in the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Guarantor and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference), or
in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents incorporated
by reference in the Prospectus specified by the Representatives, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Guarantor and its
subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer to
the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement and to the Prospectus as amended or
supplemented (including all documents incorporated by reference therein) for the
purposes of the letter delivered either (i) on the effective date of any
post-effective amendment to the Registration Statement or Rule 462(b)
Registration Statement filed subsequent to the date of the Underwriting
Agreement or (ii) at the Time of Delivery, as the case may be.
Exhibit 11(b)
SWEPCO Capital I
Trust Preferred Securities
(liquidation preference $25 per preferred security)
guaranteed by
Southwestern Electric Power Company
Underwriting Agreement
April 30, 1997
Smith Barney Inc.
Dean Witter Reynolds Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated,
c/o Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
From time to time, SWEPCO Capital I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust") and Southwestern Electric
Power Company, a Delaware corporation, as depositor of the Trust and as
guarantor (the "Guarantor"), each proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of the Trust's Trust Preferred Securities
(liquidation preference $25 per preferred security) (the "Securities")
representing undivided beneficial interests in the assets of the Trust,
guaranteed by the Guarantor as to the payment of distributions, and as to
payments on liquidation or redemption, as set forth in a guarantee agreement
(the "Guarantee") between the Guarantor and The Bank of New York, as trustee
(the "Guarantee Trustee"). The Securities represented by such Pricing Agreement
are referred to as the "Designated Securities" with respect to such Pricing
Agreement. The proceeds of the sale of the Securities and certain of the Trust's
Common Securities (liquidation preference $25 per common security) (the "Common
Securities") by the Trust are to be invested in Junior Subordinated Deferrable
Interest Debentures (the "Subordinated Debentures") of the Guarantor, to be
issued pursuant to an Indenture (the "Indenture") between the Guarantor and The
Bank of New York, as trustee (the "Debenture Trustee"), as heretofore
supplemented and amended, including by the supplemental indenture relating to
the Subordinated Debentures in which the proceeds of the sale of the Designated
Securities are to be invested.
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Trust to sell any of the Securities or as an obligation of
any of the Underwriters to purchase any of the Securities. The obligation of the
Trust to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate number of Designated Securities,
the initial public offering price of such Securities or the manner of
determining such price, the terms of the Designated Securities, the purchase
price to the Underwriters of such Designated Securities, the names of the
Underwriters of such Designated Securities, the names of the Representatives of
such Underwriters, the number of such Designated Securities to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Securities, and payment therefor. The Pricing Agreement shall also specify
(to the extent not set forth in the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. Each of the Guarantor and the Trust, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-21155),
as amended by Amendment No. 1 thereto (the "Initial Registration
Statement"), in respect of the Securities, the Guarantee and the
Subordinated Debentures (collectively, the "Registered Securities"),
including a prospectus relating to the Registered Securities, and the
offering thereof from time to time in accordance with Rule 415 under
the Securities Act of 1933, as amended (the "Act"), has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to such registration statement
but including all documents incorporated by reference in the prospectus
included therein, to the Representatives for each of the other
Underwriters has been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Act, which becomes effective upon
filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424 of the rules and regulations of
the Commission under the Act, each in the form heretofore delivered to
the Representatives); and no stop order suspending the effectiveness of
the Initial Registration Statement, and post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened, to the knowledge of the Guarantor or the Trust, by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) under the Act, is hereinafter called a "Preliminary Prospectus";
the various parts of the Initial Registration Statement and the 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective (but excluding Form T-1) or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, each as amended at the time such part of
the Initial Registration Statement became effective, are hereinafter
collectively called the "Registration Statement"; the prospectus
relating to the Registered Securities in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under
the Act, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the
Guarantor filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in relation to
the applicable Designated Securities in the form in which it is filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing).
(b) The documents incorporated by reference in the Prospectus
as amended or supplemented, when they became effective or were filed
with the Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder,
and none of such documents contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Trust or
the Guarantor by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(c) The Registration Statement, as of its effective date, and
the Prospectus, at the time it is filed with the Commission, conform
and will conform, as the case may be, and any further amendments or
supplements to the Registration Statement or the Prospectus will
conform, in all material respects with the applicable requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
thereunder; neither the Registration Statement, nor any amendment
thereto, as of the applicable effective date, contains an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and the Prospectus and any amendment or supplement thereto
at the time it is filed with the Commission, does not include and will
not include an untrue statement of a material fact and does not omit
and will not omit to state a material fact necessary to make the
statements therein in light of the circumstances under which they were
made not misleading; provided, however, that this representation and
warranty shall not apply to the part of the Registration Statement that
constitutes the statement of eligibility on Form T-1 under the Trust
Indenture Act of the Property Trustee, the Delaware Trustee and the
Guarantor Trustee and any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Trust or
the Guarantor by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(d) Since the respective dates as of which information is
given in the Registration Statement and in the Prospectus as amended or
supplemented, there has been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor and its subsidiaries, taken as a whole, or
(ii) adverse development concerning the business or assets of the
Guarantor and its subsidiaries, taken as a whole, which would result in
a material adverse change in the prospective financial condition or
results of operations of the Guarantor and its subsidiaries, taken as a
whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended or supplemented
(including the financial statements and notes thereto included or
incorporated by reference therein).
(e) The Trust has been duly created and is validly existing as
a statutory business trust in good standing under the Business Trust
Act of the State of Delaware (the "Delaware Business Trust Act") with
the power and authority to own its properties and conduct its business
as described in the Prospectus as amended or supplemented, and the
Trust has conducted and will conduct no business in the future that
would be inconsistent with the description of the Trust set forth in
the Prospectus as amended or supplemented; the Trust is not a party to
or bound by any agreement or instrument other than this Agreement, the
Trust Agreement (the "Trust Agreement") between the Guarantor and the
trustees named therein (the "Trustees"), the Trust Certificate (as
hereinafter defined) and the agreements and instruments contemplated by
the Trust Agreement; the Trust has no liabilities or obligations other
than those arising out of the transactions contemplated by this
Agreement and the Trust Agreement and described in the Prospectus;
based on current law, the Trust is not classified as an association
taxable as a corporation for United States federal income tax purposes;
and the Trust is not a party to or subject to any action, suit or
proceeding of any nature.
(f) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus as amended or
supplemented, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business so as to require such qualification except where
the failure to so qualify would not have a material adverse effect on
the financial condition of the Guarantor and its subsidiaries, taken as
a whole.
(g) The Guarantor has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Guarantor have been duly and validly authorized and issued and
are fully paid and non-assessable.
(h) The Guarantor has no significant subsidiaries, as
"significant subsidiary" is defined in Rule 405 of Regulation C of the
rules and regulations promulgated by the Commission under the Act.
(i) This Agreement has been duly authorized, executed and
delivered by each of the Guarantor and the Trust.
(j) The Securities have been duly and validly authorized by
the Trust in accordance with the Trust Agreement, and, when issued and
delivered pursuant to this Agreement and the Pricing Agreement with
respect to such Designated Securities, such Designated Securities, will
be duly and validly issued and fully paid and non-assessable undivided
beneficial interests in the assets of the Trust and be entitled to the
benefits of the Trust Agreement; the Securities conform in all material
respects to the description thereof contained in the Registration
Statement and the Designated Securities will conform in all material
respects to the description thereof contained in the Prospectus as
amended or supplemented; the issuance of the Securities is not subject
to preemptive or other similar rights; and the terms of the Securities
are valid and binding on the Trust; the Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General Corporation
Law of the State of Delaware.
(k) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending
or, to the knowledge of the Guarantor, threatened to which the
Guarantor or any of its subsidiaries is a party or to which any of the
properties of the Guarantor or any of its subsidiaries is subject,
which are required to be described in the Prospectus, as amended or
supplemented; and there are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus as amended or supplemented or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) The Guarantor (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would
not, singly or in the aggregate, have a material adverse effect on the
Guarantor and its subsidiaries, taken as a whole.
(m) The Common Securities have been duly and validly
authorized by the Trust in accordance with the Trust Agreement and upon
issuance and delivery by the Trust to the Guarantor against payment
therefor as described in the Prospectus, will be duly and validly
issued and fully paid and non-assessable undivided beneficial interests
in the assets of the Trust and be entitled to the benefits of the Trust
Agreement; the Common Securities conform in all material respects to
the description thereof contained in the Prospectus as amended or
supplemented; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Time of Delivery (as
defined in Section 4 hereof), all of the issued and outstanding Common
Securities of the Trust will be directly owned by the Guarantor free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(n) The Guarantee Agreement has been duly and validly
authorized by the Guarantor and when executed and delivered by the
Guarantor and by the Guarantee Trustee will have been duly executed and
delivered and will constitute a valid and legally binding obligation of
the Guarantor enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law); and the Guarantee
Agreement has been qualified under the Trust Indenture Act.
(o) The Subordinated Debentures have been duly and validly
authorized by the Guarantor and when executed, authenticated and
delivered in accordance with the Indenture will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Guarantor enforceable in
accordance with their terms, except as limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization and other similar
laws relating to or affecting creditors' rights generally and general
equitable principles (whether considered in a proceeding in equity or
at law) and the Subordinated Debentures are entitled to the benefits of
the Indenture.
(p) The Trust Agreement has been duly and validly authorized
by the Guarantor and when executed and delivered by the Guarantor and
by the Administrative Trustees will have been duly executed and
delivered and will constitute a valid and legally binding obligation of
the Guarantor enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law); and the Trust
Agreement has been qualified under the Trust Indenture Act.
(q) The Indenture has been duly and validly authorized by the
Guarantor and when executed and delivered by the Guarantor and the
Debenture Trustee will have been duly executed and delivered and will
constitute a valid and legally binding obligation of the Guarantor
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in
equity or at law); and the Indenture has been qualified under the Trust
Indenture Act.
(r) The Expense Agreement between the Guarantor and the Trust
(the "Expense Agreement") has been duly and validly authorized by the
Guarantor and when executed and delivered by the Guarantor and the
Trust, will have been duly executed and delivered and will constitute a
valid and legally binding obligation of the Guarantor enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization and other similar laws relating
to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
(s) The Commission has entered an order (the "Order") under
the Public Utility Holding Company Act of 1935, as amended (the "1935
Act"), permitting to become effective the Form U-1
Application-Declaration filed by the Guarantor authorizing the creation
of the Trust, the issue and sale of the Securities by the Trust, the
issuance and delivery of the Common Securities by the Trust, the
issuance and sale of the Subordinated Debentures by the Guarantor and
the execution, delivery and performance of the Guarantee. A copy of
such order heretofore entered by the Commission has been or will be
delivered to Smith Barney Inc. on behalf of the Representatives.
(t) The issue and sale of the Securities and the Common
Securities by the Trust, the compliance by the Trust with all of the
provisions of this Agreement and any Pricing Agreement, the execution,
delivery and performance by the Trust of the Expense Agreement, the
purchase of the Subordinated Debentures by the Trust, and the
consummation of the transactions contemplated herein and therein will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture or
other material agreement or instrument to which the Trust is a party or
by which the Trust is bound or to which any of the property or assets
of the Trust is subject, nor will such action result in any violation
of the provisions of the Certificate of Trust of the Trust or the Trust
Agreement or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Trust or
any of its properties; and no consent, approval, authorization, order,
license, certificate, permit, registration or qualification of or with
any such court or governmental agency or body, other than the Order,
which has been duly obtained and is in full force and effect, is
required, for the issue and sale of the Securities and the Common
Securities by the Trust, the purchase of the Subordinated Debentures by
the Trust or the consummation by the Trust of the transactions
contemplated by this Agreement or any Pricing Agreement, except such as
have been, or will have been prior to the Time of Delivery (as defined
in Section 4 hereof), obtained under the Act and the Exchange Act, of
the Registered Securities and the Securities, respectively, the
qualification of the Trust Agreement, the Indenture and the Guarantee
Agreement under the Trust Indenture Act, and such consents, approvals,
authorizations, orders, licenses, certificates, permits, registrations
or qualifications as have already been obtained, or as may be
subsequently obtained in the ordinary course of business, or as may be
required under state securities or Blue Sky laws in connection with the
purchase of the Securities and the distribution of the Securities by
the Underwriters.
(u) The issuance by the Guarantor of the Guarantee, the
compliance by the Guarantor with all of the provisions of this
Agreement and any Pricing Agreement, the execution, delivery and
performance by the Guarantor of the Guarantee Agreement, the
Subordinated Debentures, the Trust Agreement, the Indenture and the
Expense Agreement, and the consummation of the transactions
contemplated herein and therein will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture or other material agreement or
instrument to which the Guarantor or any of its subsidiaries is a party
or by which the Guarantor or any of its subsidiaries is bound or to
which any of the property or assets of the Guarantor or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the Certificate of Incorporation or by-laws of the
Guarantor or the charter or by-laws of any of its subsidiaries or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Guarantor or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, license, certificate, permit, registration or
qualification of or with any such court or other governmental agency or
body, other than the Order, which has been duly obtained and is in full
force and effect, is required for the issue of the Guarantee or the
consummation by the Guarantor of the other transactions contemplated by
this Agreement or any Pricing Agreement, except the registration under
the Act of the Registered Securities, the qualification of the Trust
Agreement, the Indenture and the Guarantee under the Trust Indenture
Act and such consents, approvals, authorizations, orders, licenses,
certificates, permits, registrations or qualifications as have already
been obtained, or as may be subsequently obtained in the ordinary
course of business, or as may be required under state securities or
Blue Sky laws and in connection with the purchase of the Securities and
distribution of the Securities by the Underwriters.
(v) Neither the Trust nor the Guarantor is in violation of its
organizational documents or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any indenture or other material agreement or instrument to which it
is a party or by which it or any of its properties may be bound.
(w) Neither the Trust nor the Guarantor is, and after giving
effect to the offering and sale of the Securities, neither the Trust
nor the Guarantor will be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(x) There are no contracts, agreements or understandings
between the Trust or the Guarantor and any person that grant such
person the right to require the Trust or the Guarantor to file a
registration statement under the Act with respect to any undivided
beneficial interests in the assets of the Trust or any capital stock of
the Guarantor owned or to be owned by such person or to require the
Trust or the Guarantor to include such securities in the securities
registered pursuant to the Registration Statement.
(y) Arthur Andersen LLP, who have certified certain financial
statements of the Guarantor and the Guarantor's subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities, the several Underwriters propose to offer the Designated
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
4. Certificates for the Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto, in the form
specified in such Pricing Agreement, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Trust, shall be delivered by or on behalf
of the Trust to the Representatives for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor in
immediately available funds by wire transfer to an account designated in writing
by the Trust as specified in such Pricing Agreement, all in the manner and at
the place and time and date as the Representatives and the Trust may agree upon
in writing, such time and date being herein called the "Time of Delivery".
5. Each of the Trust and the Guarantor, jointly and severally,
agrees with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities, or, if
applicable, such time as may be required by Rule 424(b) under the Act;
to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Securities and prior to any Time
of Delivery for such Securities which shall be disapproved in writing
by the Representatives for such Securities promptly after reasonable
notice thereof; to advise the Representatives promptly of any such
amendment or supplement after any Time of Delivery for such Securities
and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required
to be filed by the Trust or the Guarantor with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long
as the delivery of a prospectus is required in connection with the
offering or sale of such Securities, and during such same period to
advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of the Registered Securities for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, promptly to use its
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith
neither the Trust nor the Guarantor shall be required to qualify as a
foreign corporation or trust or to qualify as a dealer in Securities or
to file any general consents to service of process in any jurisdiction;
(c) To use its best efforts to furnish, prior to 12:00 noon,
New York City time, on the New York Business Day next succeeding the
date of the applicable Pricing Agreement and from time to time during
the period when a prospectus is required to be delivered under the Act
by any Underwriter or dealer, the Underwriters with copies of the
Prospectus as amended or supplemented in New York City in such
quantities as the Representatives may reasonably request, and if, in
the reasonable opinion of counsel to the Guarantor, the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would in the reasonable opinion of counsel for the
Guarantor include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such period to amend or supplement
the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply in the
reasonable opinion of counsel for the Guarantor with the Act or the
Exchange Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus, if any, which will
correct such statement or omission or effect such compliance;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Guarantor and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Guarantor, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the earlier of (i) the date, after the Time of Delivery, on
which the distribution of the Securities ceases, as determined by the
Representatives on behalf of the Underwriters, and (ii) 30 days after
the Time of Delivery for such Designated Securities, not to offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Trust, any other beneficial interests
of the Trust, or any preferred securities or any other securities of
the Trust or the Guarantor, as the case may be, that are substantially
similar to the Designated Securities, including the Guarantee, and
including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive securities,
preferred securities or any such substantially similar securities of
either the Trust or the Guarantor, without the prior consent of the
Representatives;
(f) To issue the Guarantee concurrently with the issue
and sale of the Securities as contemplated herein;
(g) To use its best efforts to list, subject to notice of
issuance, the Securities on the New York Stock Exchange; and
(h) If the Trust and the Guarantor elect to rely upon Rule
462(b), to file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m. Washington,
D.C. time, on the date of the applicable Pricing Agreement, and at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
6. The Guarantor covenants and agrees with the several Underwriters
that it will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Trust's and the Guarantor's counsel and accountants in
connection with the registration of the Registered Securities under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers, excluding the fees and disbursements of
counsel for the Underwriters, except as set forth in clause (iii) below and
Section 11 hereof; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, any Pricing Agreement, the Indenture, the
Guarantee, any Blue Sky Memorandum and any other documents in connection with
the offering, purchase, sale and delivery of the Registered Securities; (iii)
all expenses in connection with the qualification of the Registered Securities
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky surveys,
not exceeding however $6,000 in the aggregate; (iv) any fees charged by
securities rating services for rating the Securities; (v) the cost and charges
of the transfer agent or registrar; (vi) the cost of qualifying the Securities
with The Depository Trust Company; (vii) all reasonable fees and expenses of the
Trustees, the Debenture Trustee, the Guarantee Trustee and their counsel; (viii)
all fees and expenses in connection with the listing of the Securities on the
New York Stock Exchange and the cost of registering the Securities under Section
12 of the Exchange Act; and (ix) the cost of preparing certificates for the
Securities and the Subordinated Debentures. It is understood, however, that,
except as provided in this Section and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Trust and the
Guarantor in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the Trust and the
Guarantor shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Trust and the Guarantor
have elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m. Washington, D.C.
time, on the date of the applicable Pricing Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or, to the knowledge of the Guarantor or the
Representatives, threatened by the Commission;
(b) Sidley & Austin, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions (a draft of
each such opinion is attached as Annex II(a) hereto), dated each Time
of Delivery for such Designated Securities, with respect to: the
incorporation of the Guarantor; insofar as the federal laws of the
United States or the General Corporation Law of the State of Delaware
is concerned, the validity of the Registered Securities and the
Subordinated Debentures; the Registration Statement and the Prospectus;
and other related matters as the Representatives may reasonably
request; and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) Richards, Layton & Finger, P.A., special Delaware counsel
for the Guarantor and the Trust, shall have furnished to the
Representatives their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(d) Milbank, Tweed, Hadley & McCloy, counsel for the Trust and
the Guarantor, shall have furnished to the Representatives their
written opinion (a draft of such opinion is attached as Annex II(c)
hereto), dated each Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives, to the effect
set forth in such Annex;
(e) Christy & Viener, special tax counsel for the Guarantor
and the Trust, shall have furnished to the Representatives their
written opinion (a draft of such opinion is attached as Annex II(d)
hereto), dated each Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives, to the effect
set forth in such Annex;
(f) Matthews, Campbell, Rhoads, McClure & Thompson, special
Arkansas counsel for the Guarantor and the Trust, shall have furnished
to the Representatives their written opinion (a draft of such opinion
is attached as Annex II(e) hereto), dated each Time of Delivery for
such Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(g) Doerner, Saunders, Daniel & Anderson, special Oklahoma
counsel for the Guarantor and the Trust, shall have furnished to the
Representatives their written opinion (a draft of such opinion is
attached as Annex II(f) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(h) Wilkinson, Carmody & Gilliam, special Louisiana counsel
for the Guarantor and the Trust, shall have furnished to the
Representatives their written opinion (a draft of such opinion is
attached as Annex II(g) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(i) Coghlan, Crowson, Fitzpatrick & Westbrook, special Texas
counsel for the Guarantor and the Trust, shall have furnished to the
Representatives their written opinion (a draft of such opinion is
attached as Annex II(h) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(j) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to the Designated Securities and at each Time of Delivery
for such Designated Securities, Arthur Andersen LLP shall have
furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed
with the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex III hereto,
and with respect to such letter dated such Time of Delivery, as to such
other matters as the Representatives may reasonably request and in form
and substance satisfactory to the Representatives; (a draft of the form
of letter to be delivered at a time prior to the execution of the
Pricing Agreement, on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery
may be attached as Annex III hereto);
Subsequent to the respective dates as of which information is
given in each of the Registration Statement and the Prospectus, there
shall not have been any change or decrease specified in the letters
required by subsection (g) of this Section 7 which is, in the judgment
of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the
delivery of the Designated Securities as contemplated by the
Registration Statement and the Prospectus;
(k) The Trust Agreement, the Guarantee and the Indenture shall
have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives;
(l) Since the respective dates as of which information is
given in each of the Registration Statement and in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities there shall have been no (i) material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Guarantor and its subsidiaries, taken as
a whole, or (ii) any adverse development concerning the business or
assets of the Guarantor and its subsidiaries, taken as a whole, which
would result in a material adverse change in the prospective financial
condition or results of operations of the Guarantor and its
subsidiaries, taken as a whole, except such changes as are set forth or
contemplated in such Registration Statement or the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities (including the financial statements and notes
thereto included or incorporated by reference in the Registration
Statement);
(m) On or after the date of the Pricing Agreement relating to
the Designated Securities no downgrading shall have occurred in the
rating accorded the Securities or the Guarantor's debt securities or
preferred stock by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act;
(n) On or after the date of the Pricing Agreement relating to
the Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Guarantor's or the Trust's
securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either Federal or New York
State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
war, if the effect of any such event specified in this Clause (iv) in
the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in
the Prospectus as first amended or supplemented relating to the
Designated Securities;
(o) The Securities at each Time of Delivery shall have been
approved for listing, subject to notice of issuance, on the New York
Stock Exchange; and
(p) The Trust and the Guarantor shall have furnished or caused
to be furnished to the Representatives at each Time of Delivery for
Designated Securities certificates of officers or Administrative
Trustees of the Trust (as defined in the Trust Agreement), as
applicable, of the Guarantor and the Trust, satisfactory to the
Representatives, as to the accuracy of the representations and
warranties of the Trust and the Guarantor herein at and as of such Time
of Delivery, as to the performance by the Trust and the Guarantor of
all of their obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and
(l) of this Section and as to such other matters as the Representatives
may reasonably request.
8. (a) The Trust and the Guarantor, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Securities Act, the Exchange Act
or the common law or otherwise, and to reimburse each such Underwriter or such
controlling person for any reasonable legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) incurred by it or them in
connection with defending against any such losses, claims, damages or
liabilities, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Guarantor shall have furnished any amendments or supplements
thereto) or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the indemnity agreement contained in this
subsection (a) shall not apply to any such losses, claims, damages or
liabilities arising out of or based upon (i) any such untrue statement or
alleged untrue statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Trust or the Guarantor by any of the
Underwriters for use in the Registration Statement or the Prospectus or any
amendment or supplement to either thereof or (ii) the failure of any Underwriter
to deliver (either directly or through the Representatives) a copy of the
Prospectus (excluding the documents incorporated therein by reference), or of
the Prospectus as amended or supplemented after it shall have been amended or
supplemented by the Guarantor (excluding the documents incorporated therein by
reference), to any person to whom a copy of any preliminary prospectus shall
have been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have been sold by such Underwriter, as such delivery
may be required by the Securities Act and the rules and regulations of the
Commission thereunder.
(b) Each of the Underwriters, severally and not jointly, agrees to
indemnify and hold harmless the Trust and the Guarantor, each of their officers
who signs the Registration Statement, each of their directors, each person who
controls the Trust or the Guarantor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each other Underwriter and
each person, if any, who so controls such other Underwriter, from and against
any and all losses, claims, damages or liabilities, joint or several, to which
any one or more of them may become subject under the Securities Act, the
Exchange Act or the common law or otherwise, and to reimburse each of them for
any reasonable legal or other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in connection with defending
against any such losses, claims, damages or liabilities of the character above
specified arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus or any amendment to the Registration Statement or amendment or
supplement to the Prospectus or upon any omission or alleged omission to state
in any thereof a material fact required to be stated therein or necessary to
make the statements therein not misleading if such statement or omission was
made in reliance upon and in conformity with information furnished in writing to
the Trust or the Guarantor by such Underwriter for use in the Registration
Statement or the Prospectus or any amendment or supplement to either thereof or
(ii) the failure of such Underwriter, due to the negligence of such Underwriter,
to deliver (either directly or through the Representatives) a copy of the
Prospectus (excluding the documents incorporated therein by reference), or of
the Prospectus as amended or supplemented after it shall have been amended or
supplemented by the Guarantor (excluding the documents incorporated therein by
reference), to any person to whom a copy of any preliminary prospectus shall
have been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have sold by such Underwriter, as such delivery may
be required by the Securities Act and the rules and regulations of the
Commission thereunder.
(c) Promptly after receipt by a party indemnified under this Section 8
(an "indemnified party") of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against a
party granting an indemnity under this Section 8 (the "indemnifying party"),
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof (thereby conceding that the action in question is subject to
indemnification by the indemnifying party), with counsel reasonably satisfactory
to such indemnified party, and shall pay the fees and disbursements of such
counsel related to such action; provided, however, that if the defendants in any
such action include both the indemnified party and the indemnifying party and
representation of both parties would be inappropriate due to actual or potential
differing interests between them, the indemnified party or parties shall have
the right to select separate counsel. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel), approved by the
Representatives in the case of subsection (a), representing the indemnified
parties under subsection (a) who are parties to such action and that all such
fees and expenses shall be reimbursed as they are incurred) or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that such liability
shall be only in respect of the counsel referred to in clause (i) or (ii). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section 8 shall be
unenforceable under applicable law by an indemnified party, the Trust and the
Guarantor, jointly and severally, agree to contribute to such indemnified party
with respect to any and all losses, claims, damages and liabilities for which
such indemnification provided for in this Section 8 shall be unenforceable, in
such proportion as shall be appropriate to reflect the relative fault of the
Trust and the Guarantor on the one hand and the indemnified party on the other
hand in connection with the statements or omissions which have resulted in such
losses, claims, damages and liabilities, as well as any other relevant equitable
considerations; provided, however, that no indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from the Trust or the
Guarantor if the Trust or the Guarantor, respectively, is not guilty of such
fraudulent misrepresentation. Relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust or the Guarantor or the indemnified
party and each such party's relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Trust, the Guarantor and each of the Underwriters agree that it would not be
just and equitable if contribution pursuant to this subparagraph were to be
determined solely by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
(e) The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
(f) The indemnity and contribution agreements contained in this Section
8 and the representations and warranties of the Trust and the Guarantor in the
Underwriting Agreement shall remain operative and in full force regardless of
(i) any termination of the Underwriting Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Trust or the Guarantor, their directors or officers or
any person controlling the Trust or the Guarantor and (iii) acceptance of and
payment for any of the Designated Securities.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
twenty-four hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Trust and
the Guarantor shall be entitled to a further period of twenty-four hours within
which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
the Trust and the Guarantor that they have so arranged for the purchase of such
Designated Securities, or the Trust or the Guarantor notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Trust and the Guarantor shall have the
right to postpone a Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Trust and the Guarantor agree to file
promptly any amendments or supplements to the Registration Statement or the
Prospectus which may be required in the opinion of counsel for the Guarantor.
The term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and the Guarantor as provided in subsection (a)
above, the aggregate number of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate number of the
Designated Securities to be purchased at the respective Time of Delivery, then
the Trust and the Guarantor shall have the right to require each non-defaulting
Underwriter to purchase the number of Designated Securities which such
Underwriter agreed to purchase under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Designated
Securities which such Underwriter agreed to purchase under such Pricing
Agreement) of the Designated Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and the Guarantor as provided in subsection (a)
above, the aggregate number of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate number of Designated Securities to be
purchased at the respective Time of Delivery, as referred to in subsection (b)
above, or if the Trust and the Guarantor shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter, the
Trust or the Guarantor, except for the expenses to be borne by the Guarantor and
the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, the Guarantor and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Trust, the Guarantor or any officer, trustee or director or controlling person
of the Trust or the Guarantor, and shall survive delivery of and payment for the
Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, neither the Trust nor the Guarantor shall then be under any liability to
any Underwriter with respect to the Designated Securities with respect to which
such Pricing Agreement shall have been terminated except as provided in Sections
6 and 8 hereof; but, if any Pricing Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part of
the Trust or the Guarantor to comply with the terms or to fulfill any of the
conditions of the Pricing Agreement (excluding those conditions set forth in
Section 7(j) hereof), or if for any reason the Trust or the Guarantor shall be
unable to perform its obligations under the Pricing Agreement, the Trust and the
Guarantor will reimburse the Underwriters or such Underwriters who have so
terminated the Pricing Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of Underwriters'
counsel) reasonably incurred by such Underwriters in connection with the Pricing
Agreement or the offering contemplated thereunder. Neither the Trust nor the
Guarantor shall in any event be liable to any of the Underwriters for damages on
account of loss of anticipated profits.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Trust or the Guarantor shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Trust or the
Guarantor, respectively, set forth in the Registration Statement, Attention:
Secretary; provided, however that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Trust and the Guarantor by the Representatives upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Trust, the Guarantor
and, to the extent provided in Sections 8 and 10 hereof, the officers, trustees
and directors of the Guarantor and the Trust and each person who controls the
Trust, the Guarantor or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any such Pricing
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return to us eight counterparts hereof.
Very truly yours,
Southwestern Electric
Power Company
By:____________________________
Name:
Title:
SWEPCO Capital I
By: Southwestern Electric Power Company,
as Depositor
By:_________________________________
Name:
Title:
Accepted as of the date hereof:
Smith Barney Inc.
Dean Witter Reynolds Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
By:
(Smith Barney Inc.)
On behalf of each of the Underwriters
<PAGE>
Annex I
Pricing Agreement
April 30, 1997
Smith Barney Inc.,
Dean Witter Reynolds Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Smith Barney Inc.,
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
SWEPCO Capital I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust") and Southwestern Electric Power Company, a
Delaware corporation (the "Guarantor"), each proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated April 30, 1997
(the "Underwriting Agreement"), among the Trust and the Guarantor on the one
hand and Smith Barney Inc. [and (names of Co-Representatives named therein)] on
the other hand, to issue and sell to the Underwriters named in Schedule I hereto
(the "Underwriters") the Securities specified in Schedule II hereto (the
"Designated Securities"). Each of the provisions of the Underwriting Agreement
is incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust, at the time and place and
at the purchase price to the Underwriters set forth in Schedule II hereto, the
number of Designated Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Trust and the Guarantor. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Trust and the Guarantor for examination but without
warranty on the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
SWEPCO Capital I
By:
Name:
Title:
Southwestern Electric Power Company
By:
Name:
Title:
Accepted as of the date hereof:
Smith Barney Inc.
Dean Witter Reynolds Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
By:_______________________________
(Smith Barney Inc.)
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Underwriter Number of
Designated Securities
to be Purchased
Smith Barney Inc...................................................820,000
Dean Witter Reynolds Inc...........................................820,000
Goldman, Sachs & Co................................................820,000
Morgan Stanley & Co. Incorporated..................................820,000
Bear, Stearns & Co. Inc.............................................80,000
Alex. Brown & Sons Incorporated.....................................80,000
Cowen & Company.....................................................80,000
Dain Bosworth Incorporated..........................................80,000
A. G. Edwards & Sons, Inc...........................................80,000
EVEREN Securities, Inc..............................................80,000
J.P. Morgan & Co....................................................80,000
Oppenheimer & Co., Inc..............................................80,000
Piper Jaffray Inc...................................................80,000
Prudential Securities Incorporated..................................80,000
Raymond James & Associates, Inc.....................................80,000
Rauscher Pierce Refnes, Inc.........................................80,000
The Robinson-Humphrey Company, Inc..................................80,000
U.S. Clearing Corp..................................................80,000
Total............................................................4,400,000
<PAGE>
SCHEDULE II
Title of Designated Securities:
7.875% Trust Preferred Securities, Series A
Number of Designated Securities:
4,400,000
Initial Offering Price to Public:
$25.00 per Preferred Security
Commission Payable to Underwriters:
$0.7875 per Preferred Security; provided, that such commission will be $0.50 per
Preferred Security sold to certain institutions, in Federal (same day) Funds by
wire transfer
Form of Designated Shares:
Book-entry only form represented by one or more global securities deposited with
The Depository Trust Company ("DTC") or its designated custodian for trading in
the Same Day Funds Settlement System of DTC, and to be made available for
checking by the Representatives at least twenty-four hours prior to the Time of
Delivery at the office of DTC.
Specified Funds for Payment of Purchase Price:
Federal (same day) Funds by wire transfer
Time of Delivery:
10:00 a.m. (New York City time), on May 8, 1997 or at such other place and time,
not later than May 15, 1997, as shall be mutually agreed. In accordance with
Rule 15c6-1(d) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Underwriters agree to this alternative date for
payment of funds and delivery of the Designated Securities in lieu of that
required by paragraphs (a) and (c) of Rule 15c6-1 of the Exchange Act.
Closing Location:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Names and addresses of Representatives:
Designated Representatives
Address for Notices, etc.:
Smith Barney Inc.
390 Greenwich Street
New York, New York 10013
Attention: Edward P. Meehan
Dean Witter Reynolds Inc.
2 World Trade Center
New York, New York 10048
Attention: Tim Laslavic
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Don Hansen
Morgan Stanley & Co. Incorporated
1585 Broadway, 2nd Floor
New York, New York 10036
Attention: Debt Syndicate Department
<PAGE>
ANNEX III
Form of letter of Arthur Andersen LLP
to be delivered pursuant to Section 7(j)
Pursuant to Section 7(j) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Guarantor and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Prospectus or the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act,
as applicable, and the related published rules and regulations
thereunder, and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Guarantor for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representatives of the Underwriters
(the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or the Guarantor's quarterly reports on
Form 10-Q incorporated by reference into the Prospectus as indicated in
their reports thereon copies of which have been separately furnished to
the Representatives; and on the basis of specified procedures including
inquiries of officials of the Guarantor who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Guarantor for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Guarantor's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Guarantor's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of Items 301, 302,
402 and 503(d) respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Guarantor and its subsidiaries,
inspection of the minute books of the Guarantor and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Guarantor and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in the
Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Guarantor's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Guarantor's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included or incorporated by reference in the Prospectus) or
any increase in the consolidated long-term debt of the
Guarantor and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenue or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period in the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Guarantor and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference), or
in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents incorporated
by reference in the Prospectus specified by the Representatives, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Guarantor and its
subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement and to the Prospectus as amended
or supplemented (including all documents incorporated by reference therein) for
the purposes of the letter delivered either (i) on the effective date of any
post-effective amendment to the Registration Statement or Rule 462(b)
Registration Statement filed subsequent to the date of the Underwriting
Agreement or (ii) at the Time of Delivery, as the case may be.
Exhibit 11(c)
CPL Capital I
Cumulative Quarterly Income Preferred Securities ("QUIPS"SM)*
(liquidation preference $25 per preferred security)
guaranteed by
Central Power and Light Company
Underwriting Agreement
May 8, 1997
Goldman, Sachs & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Smith Barney Inc.,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
From time to time, CPL Capital I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust") and Central Power and
Light Company, a Texas corporation, as depositor of the Trust and as guarantor
(the "Guarantor"), each proposes to enter into one or more Pricing Agreements
(each a "Pricing Agreement") in the form of Annex I hereto, with such additions
and deletions as the parties thereto may determine, and, subject to the terms
and conditions stated herein and therein, to issue and sell to the firms named
in Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of the Trust's Cumulative Quarterly Income Preferred
Securities (liquidation preference $25 per preferred security) (the
"Securities") representing undivided beneficial interests in the assets of the
Trust, guaranteed by the Guarantor as to the payment of distributions, and as to
payments on liquidation or redemption, as set forth in a guarantee agreement
(the "Guarantee") between the Guarantor and The Bank of New York, as trustee
(the "Guarantee Trustee"). The Securities represented by such Pricing Agreement
are referred to as the "Designated Securities" with respect to such Pricing
Agreement. The proceeds of the sale of the Securities and certain of the Trust's
Common Securities (liquidation preference $25 per common security) (the "Common
Securities") by the Trust are to be invested in Junior Subordinated Deferrable
Interest Debentures (the "Subordinated Debentures") of the Guarantor, to be
issued pursuant to an Indenture (the "Indenture") between the Guarantor and The
Bank of New York, as trustee (the "Debenture Trustee"), as heretofore
supplemented and amended, including by the supplemental indenture relating to
the Subordinated Debentures in which the proceeds of the sale of the Designated
Securities are to be invested.
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Trust to sell any of the Securities or as an obligation of
any of the Underwriters to purchase any of the Securities. The obligation of the
Trust to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate number of Designated Securities,
the initial public offering price of such Securities or the manner of
determining such price, the terms of the Designated Securities, the purchase
price to the Underwriters of such Designated Securities, the names of the
Underwriters of such Designated Securities, the names of the Representatives of
such Underwriters, the number of such Designated Securities to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Securities, and payment therefor. The Pricing Agreement shall also specify
(to the extent not set forth in the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. Each of the Guarantor and the Trust, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-21149),
as amended by Amendment No. 1 thereto (the "Initial Registration
Statement"), in respect of the Securities, the Guarantee and the
Subordinated Debentures (collectively, the "Registered Securities"),
including a prospectus relating to the Registered Securities, and the
offering thereof from time to time in accordance with Rule 415 under
the Securities Act of 1933, as amended (the "Act"), has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to such registration statement
but including all documents incorporated by reference in the prospectus
included therein, to the Representatives for each of the other
Underwriters has been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Act, which becomes effective upon
filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424 of the rules and regulations of
the Commission under the Act, each in the form heretofore delivered to
the Representatives); and no stop order suspending the effectiveness of
the Initial Registration Statement, and post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened, to the knowledge of the Guarantor or the Trust, by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) under the Act, is hereinafter called a "Preliminary Prospectus";
the various parts of the Initial Registration Statement and the 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective (but excluding Form T-1) or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, each as amended at the time such part of
the Initial Registration Statement became effective, are hereinafter
collectively called the "Registration Statement"; the prospectus
relating to the Registered Securities in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under
the Act, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the
Guarantor filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in relation to
the applicable Designated Securities in the form in which it is filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing).
(b) The documents incorporated by reference in the Prospectus
as amended or supplemented, when they became effective or were filed
with the Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder,
and none of such documents contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Trust or
the Guarantor by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(c) The Registration Statement, as of its effective date, and
the Prospectus, at the time it is filed with the Commission, conform
and will conform, as the case may be, and any further amendments or
supplements to the Registration Statement or the Prospectus will
conform, in all material respects with the applicable requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
thereunder; neither the Registration Statement, nor any amendment
thereto, as of the applicable effective date, contains an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and the Prospectus and any amendment or supplement thereto
at the time it is filed with the Commission, does not include and will
not include an untrue statement of a material fact and does not omit
and will not omit to state a material fact necessary to make the
statements therein in light of the circumstances under which they were
made not misleading; provided, however, that this representation and
warranty shall not apply to the part of the Registration Statement that
constitutes the statement of eligibility on Form T-1 under the Trust
Indenture Act of the Property Trustee, the Delaware Trustee and the
Guarantor Trustee and any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Trust or
the Guarantor by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(d) Since the respective dates as of which information is
given in the Registration Statement and in the Prospectus as amended or
supplemented, there has been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor and its subsidiaries, taken as a whole, or
(ii) adverse development concerning the business or assets of the
Guarantor and its subsidiaries, taken as a whole, which would result in
a material adverse change in the prospective financial condition or
results of operations of the Guarantor and its subsidiaries, taken as a
whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended or supplemented
(including the financial statements and notes thereto included or
incorporated by reference therein).
(e) The Trust has been duly created and is validly existing as
a statutory business trust in good standing under the Business Trust
Act of the State of Delaware (the "Delaware Business Trust Act") with
the power and authority to own its properties and conduct its business
as described in the Prospectus as amended or supplemented, and the
Trust has conducted and will conduct no business in the future that
would be inconsistent with the description of the Trust set forth in
the Prospectus as amended or supplemented; the Trust is not a party to
or bound by any agreement or instrument other than this Agreement, the
Trust Agreement (the "Trust Agreement") between the Guarantor and the
trustees named therein (the "Trustees"), the Trust Certificate (as
hereinafter defined) and the agreements and instruments contemplated by
the Trust Agreement; the Trust has no liabilities or obligations other
than those arising out of the transactions contemplated by this
Agreement and the Trust Agreement and described in the Prospectus;
based on current law, the Trust is not classified as an association
taxable as a corporation for United States federal income tax purposes;
and the Trust is not a party to or subject to any action, suit or
proceeding of any nature.
(f) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Texas, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus as amended or
supplemented, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business so as to require such qualification except where
the failure to so qualify would not have a material adverse effect on
the financial condition of the Guarantor and its subsidiaries, taken as
a whole.
(g) The Guarantor has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Guarantor have been duly and validly authorized and issued and
are fully paid and non-assessable.
(h) The Guarantor has no significant subsidiaries, as
"significant subsidiary" is defined in Rule 405 of Regulation C of the
rules and regulations promulgated by the Commission under the Act.
(i) This Agreement has been duly authorized, executed and
delivered by each of the Guarantor and the Trust.
(j) The Securities have been duly and validly authorized by
the Trust in accordance with the Trust Agreement, and, when issued and
delivered pursuant to this Agreement and the Pricing Agreement with
respect to such Designated Securities, such Designated Securities, will
be duly and validly issued and fully paid and non-assessable undivided
beneficial interests in the assets of the Trust and be entitled to the
benefits of the Trust Agreement; the Securities conform in all material
respects to the description thereof contained in the Registration
Statement and the Designated Securities will conform in all material
respects to the description thereof contained in the Prospectus as
amended or supplemented; the issuance of the Securities is not subject
to preemptive or other similar rights; and the terms of the Securities
are valid and binding on the Trust; the Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General Corporation
Law of the State of Delaware.
(k) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending
or, to the knowledge of the Guarantor, threatened to which the
Guarantor or any of its subsidiaries is a party or to which any of the
properties of the Guarantor or any of its subsidiaries is subject,
which are required to be described in the Prospectus, as amended or
supplemented; and there are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus as amended or supplemented or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) The Guarantor (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would
not, singly or in the aggregate, have a material adverse effect on the
Guarantor and its subsidiaries, taken as a whole.
(m) The Common Securities have been duly and validly
authorized by the Trust in accordance with the Trust Agreement and upon
issuance and delivery by the Trust to the Guarantor against payment
therefor as described in the Prospectus, will be duly and validly
issued and fully paid and non-assessable undivided beneficial interests
in the assets of the Trust and be entitled to the benefits of the Trust
Agreement; the Common Securities conform in all material respects to
the description thereof contained in the Prospectus as amended or
supplemented; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Time of Delivery (as
defined in Section 4 hereof), all of the issued and outstanding Common
Securities of the Trust will be directly owned by the Guarantor free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(n) The Guarantee Agreement has been duly and validly
authorized by the Guarantor and when executed and delivered by the
Guarantor and by the Guarantee Trustee will have been duly executed and
delivered and will constitute a valid and legally binding obligation of
the Guarantor enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law); and the Guarantee
Agreement has been qualified under the Trust Indenture Act.
(o) The Subordinated Debentures have been duly and validly
authorized by the Guarantor and when executed, authenticated and
delivered in accordance with the Indenture will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Guarantor enforceable in
accordance with their terms, except as limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization and other similar
laws relating to or affecting creditors' rights generally and general
equitable principles (whether considered in a proceeding in equity or
at law) and the Subordinated Debentures are entitled to the benefits of
the Indenture.
(p) The Trust Agreement has been duly and validly authorized
by the Guarantor and when executed and delivered by the Guarantor and
by the Administrative Trustees will have been duly executed and
delivered and will constitute a valid and legally binding obligation of
the Guarantor enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law); and the Trust
Agreement has been qualified under the Trust Indenture Act.
(q) The Indenture has been duly and validly authorized by the
Guarantor and when executed and delivered by the Guarantor and the
Debenture Trustee will have been duly executed and delivered and will
constitute a valid and legally binding obligation of the Guarantor
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in
equity or at law); and the Indenture has been qualified under the Trust
Indenture Act.
(r) The Expense Agreement between the Guarantor and the Trust
(the "Expense Agreement") has been duly and validly authorized by the
Guarantor and when executed and delivered by the Guarantor and the
Trust, will have been duly executed and delivered and will constitute a
valid and legally binding obligation of the Guarantor enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization and other similar laws relating
to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
(s) The Commission has entered an order (the "Order") under
the Public Utility Holding Company Act of 1935, as amended (the "1935
Act"), permitting to become effective the Form U-1
Application-Declaration filed by the Guarantor authorizing the creation
of the Trust, the issue and sale of the Securities by the Trust, the
issuance and delivery of the Common Securities by the Trust, the
issuance and sale of the Subordinated Debentures by the Guarantor and
the execution, delivery and performance of the Guarantee. A copy of
such order heretofore entered by the Commission has been or will be
delivered to Goldman, Sachs & Co. on behalf of the Representatives.
(t) The issue and sale of the Securities and the Common
Securities by the Trust, the compliance by the Trust with all of the
provisions of this Agreement and any Pricing Agreement, the execution,
delivery and performance by the Trust of the Expense Agreement, the
purchase of the Subordinated Debentures by the Trust, and the
consummation of the transactions contemplated herein and therein will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture or
other material agreement or instrument to which the Trust is a party or
by which the Trust is bound or to which any of the property or assets
of the Trust is subject, nor will such action result in any violation
of the provisions of the Certificate of Trust of the Trust or the Trust
Agreement or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Trust or
any of its properties; and no consent, approval, authorization, order,
license, certificate, permit, registration or qualification of or with
any such court or governmental agency or body, other than the Order,
which has been duly obtained and is in full force and effect, is
required, for the issue and sale of the Securities and the Common
Securities by the Trust, the purchase of the Subordinated Debentures by
the Trust or the consummation by the Trust of the transactions
contemplated by this Agreement or any Pricing Agreement, except such as
have been, or will have been prior to the Time of Delivery (as defined
in Section 4 hereof), obtained under the Act and the Exchange Act, of
the Registered Securities and the Securities, respectively, the
qualification of the Trust Agreement, the Indenture and the Guarantee
under the Trust Indenture Act, and such consents, approvals,
authorizations, orders, licenses, certificates, permits, registrations
or qualifications as have already been obtained, or as may be
subsequently obtained in the ordinary course of business, or as may be
required under state securities or Blue Sky laws in connection with the
purchase of the Securities and the distribution of the Securities by
the Underwriters.
(u) The issuance by the Guarantor of the Guarantee, the
compliance by the Guarantor with all of the provisions of this
Agreement and any Pricing Agreement, the execution, delivery and
performance by the Guarantor of the Guarantee Agreement, the
Subordinated Debentures, the Trust Agreement, the Indenture and the
Expense Agreement, and the consummation of the transactions
contemplated herein and therein will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture or other material agreement or
instrument to which the Guarantor or any of its subsidiaries is a party
or by which the Guarantor or any of its subsidiaries is bound or to
which any of the property or assets of the Guarantor or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the Restated Articles of Incorporation or by-laws
of the Guarantor or the charter or by-laws of any of its subsidiaries
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Guarantor or
any of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, license, certificate, permit,
registration or qualification of or with any such court or other
governmental agency or body, other than the Order, which has been duly
obtained and is in full force and effect, is required for the issue of
the Guarantee or the consummation by the Guarantor of the other
transactions contemplated by this Agreement or any Pricing Agreement,
except the registration under the Act of the Registered Securities, the
qualification of the Trust Agreement, the Indenture and the Guarantee
Agreement under the Trust Indenture Act and such consents, approvals,
authorizations, orders, licenses, certificates, permits, registrations
or qualifications as have already been obtained, or as may be
subsequently obtained in the ordinary course of business, or as may be
required under state securities or Blue Sky laws and in connection with
the purchase of the Securities and distribution of the Securities by
the Underwriters.
(v) Neither the Trust nor the Guarantor is in violation of its
organizational documents or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any indenture or other material agreement or instrument to which it
is a party or by which it or any of its properties may be bound.
(w) Neither the Trust nor the Guarantor is, and after giving
effect to the offering and sale of the Securities, neither the Trust
nor the Guarantor will be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(x) There are no contracts, agreements or understandings
between the Trust or the Guarantor and any person that grant such
person the right to require the Trust or the Guarantor to file a
registration statement under the Act with respect to any undivided
beneficial interests in the assets of the Trust or any capital stock of
the Guarantor owned or to be owned by such person or to require the
Trust or the Guarantor to include such securities in the securities
registered pursuant to the Registration Statement.
(y) Arthur Andersen LLP, who have certified certain financial
statements of the Guarantor and the Guarantor's subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities, the several Underwriters propose to offer the Designated
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
4. Certificates for the Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto, in the form
specified in such Pricing Agreement, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Trust, shall be delivered by or on behalf
of the Trust to the Representatives for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor in
immediately available funds by wire transfer to an account designated in writing
by the Trust as specified in such Pricing Agreement, all in the manner and at
the place and time and date as the Representatives and the Trust may agree upon
in writing, such time and date being herein called the "Time of Delivery".
5. Each of the Trust and the Guarantor, jointly and severally, agrees
with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities, or, if
applicable, such time as may be required by Rule 424(b) under the Act;
to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Securities and prior to any Time
of Delivery for such Securities which shall be disapproved in writing
by the Representatives for such Securities promptly after reasonable
notice thereof; to advise the Representatives promptly of any such
amendment or supplement after any Time of Delivery for such Securities
and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required
to be filed by the Trust or the Guarantor with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long
as the delivery of a prospectus is required in connection with the
offering or sale of such Securities, and during such same period to
advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of the Registered Securities for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, promptly to use its
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith
neither the Trust nor the Guarantor shall be required to qualify as a
foreign corporation or trust or to qualify as a dealer in Securities or
to file any general consents to service of process in any jurisdiction;
(c) To use its best efforts to furnish, prior to 12:00 noon,
New York City time, on the New York Business Day next succeeding the
date of the applicable Pricing Agreement and from time to time during
the period when a prospectus is required to be delivered under the Act
by any Underwriter or dealer, the Underwriters with copies of the
Prospectus as amended or supplemented in New York City in such
quantities as the Representatives may reasonably request, and if, in
the reasonable opinion of counsel to the Guarantor, the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would in the reasonable opinion of counsel for the
Guarantor include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such period to amend or supplement
the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply in the
reasonable opinion of counsel for the Guarantor with the Act or the
Exchange Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus, if any, which will
correct such statement or omission or effect such compliance;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Guarantor and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Guarantor, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the earlier of (i) the date, after the Time of Delivery, on
which the distribution of the Securities ceases, as determined by the
Representatives on behalf of the Underwriters, and (ii) 30 days after
the Time of Delivery for such Designated Securities, not to offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Trust, any other beneficial interests
of the Trust, or any preferred securities or any other securities of
the Trust or the Guarantor, as the case may be, that are substantially
similar to the Designated Securities, including the Guarantee, and
including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive securities,
preferred securities or any such substantially similar securities of
either the Trust or the Guarantor, without the prior consent of the
Representatives;
(f) To issue the Guarantee concurrently with the issue
and sale of the Securities as contemplated herein;
(g) To use its best efforts to list, subject to notice of
issuance, the Securities as contemplated herein;
(h) If the Trust and the Guarantor elect to rely upon Rule
462(b), to file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m. Washington,
D.C. time, on the date of the applicable Pricing Agreement, and at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
6. The Guarantor covenants and agrees with the several Underwriters
that it will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Trust's and the Guarantor's counsel and accountants in
connection with the registration of the Registered Securities under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers, excluding the fees and disbursements of
counsel for the Underwriters, except as set forth in clause (iii) below and
Section 11 hereof; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, any Pricing Agreement, the Indenture, the
Guarantee, any Blue Sky Memorandum and any other documents in connection with
the offering, purchase, sale and delivery of the Registered Securities; (iii)
all expenses in connection with the qualification of the Registered Securities
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky surveys,
not exceeding however $6,000 in the aggregate; (iv) any fees charged by
securities rating services for rating the Securities; (v) the cost and charges
of the transfer agent or registrar; (vi) the cost of qualifying the Securities
with The Depository Trust Company; (vii) all reasonable fees and expenses of the
Trustees, the Debenture Trustee, the Guarantee Trustee and their counsel; (viii)
all fees and expenses in connection with the listing of the Securities on the
New York Stock Exchange and the cost of registering the Securities under Section
12 of the Exchange Act; and (ix) the cost of preparing certificates for the
Securities and the Subordinated Debentures. It is understood, however, that,
except as provided in this Section and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Trust and the
Guarantor in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the Trust and the
Guarantor shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Trust and the Guarantor
have elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m. Washington, D.C.
time, on the date of the applicable Pricing Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or, to the knowledge of the Guarantor or the
Representatives, threatened by the Commission;
(b) Sidley & Austin, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions (a draft of
each such opinion is attached as Annex II(a) hereto), dated each Time
of Delivery for such Designated Securities, with respect to: the
incorporation of the Guarantor; insofar as the federal laws of the
United States or the General Corporation Law of the State of Delaware
is concerned, the validity of the Registered Securities and the
Subordinated Debentures; the Registration Statement and the Prospectus;
and other related matters as the Representatives may reasonably
request; and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) Richards, Layton & Finger, P.A., special Delaware counsel
for the Guarantor and the Trust, shall have furnished to the
Representatives their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(d) Milbank, Tweed, Hadley & McCloy, counsel for the Trust and
the Guarantor, shall have furnished to the Representatives their
written opinion (a draft of such opinion is attached as Annex II(c)
hereto), dated each Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives, to the effect
set forth in such Annex;
(e) Vinson & Elkins L.L.P., special Texas counsel for the
Guarantor and the Trust, shall have furnished to the Representatives
their written opinion (a draft of such opinion is attached as Annex
II(d) hereto), dated each Time of Delivery for such Designated
Securities, in form and substance satisfactory to the Representatives,
to the effect set forth in such Annex;
(f) Christy & Viener, special tax counsel for the Guarantor
and the Trust, shall have furnished to the Representatives their
written opinion (a draft of such opinion is attached as Annex II(e)
hereto), dated each Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives, to the effect
set forth in such Annex;
(g) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to the Designated Securities and at each Time of Delivery
for such Designated Securities, Arthur Andersen LLP shall have
furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed
with the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex III hereto,
and with respect to such letter dated such Time of Delivery, as to such
other matters as the Representatives may reasonably request and in form
and substance satisfactory to the Representatives; (a draft of the form
of letter to be delivered at a time prior to the execution of the
Pricing Agreement, on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery
may be attached as Annex III hereto);
Subsequent to the respective dates as of which information is
given in each of the Registration Statement and the Prospectus, there
shall not have been any change or decrease specified in the letters
required by subsection (g) of this Section 7 which is, in the judgment
of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the
delivery of the Designated Securities as contemplated by the
Registration Statement and the Prospectus;
(h) The Trust Agreement, the Guarantee and the Indenture shall
have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives;
(i) Since the respective dates as of which information is
given in each of the Registration Statement and in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities there shall have been no (i) material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Guarantor and its subsidiaries, taken as
a whole, or (ii) any adverse development concerning the business or
assets of the Guarantor and its subsidiaries, taken as a whole, which
would result in a material adverse change in the prospective financial
condition or results of operations of the Guarantor and its
subsidiaries, taken as a whole, except such changes as are set forth or
contemplated in such Registration Statement or the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities (including the financial statements and notes
thereto included or incorporated by reference in the Registration
Statement);
(j) On or after the date of the Pricing Agreement relating to
the Designated Securities no downgrading shall have occurred in the
rating accorded the Securities or the Guarantor's debt securities or
preferred stock by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act;
(k) On or after the date of the Pricing Agreement relating to
the Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Guarantor's or the Trust's
securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either Federal or New York
State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
war, if the effect of any such event specified in this Clause (iv) in
the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in
the Prospectus as first amended or supplemented relating to the
Designated Securities;
(l) The Securities at each Time of Delivery shall have been
approved for listing, subject to notice of issuance, on the New York
Stock Exchange; and
(m) The Trust and the Guarantor shall have furnished or caused
to be furnished to the Representatives at each Time of Delivery for
Designated Securities certificates of officers or Administrative
Trustees of the Trust (as defined in the Trust Agreement), as
applicable, of the Guarantor and the Trust, satisfactory to the
Representatives, as to the accuracy of the representations and
warranties of the Trust and the Guarantor herein at and as of such Time
of Delivery, as to the performance by the Trust and the Guarantor of
all of their obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and
(i) of this Section and as to such other matters as the Representatives
may reasonably request.
8. (a) The Trust and the Guarantor, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Securities Act, the Exchange Act
or the common law or otherwise, and to reimburse each such Underwriter or such
controlling person for any reasonable legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) incurred by it or them in
connection with defending against any such losses, claims, damages or
liabilities, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Guarantor shall have furnished any amendments or supplements
thereto) or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the indemnity agreement contained in this
subsection (a) shall not apply to any such losses, claims, damages or
liabilities arising out of or based upon (i) any such untrue statement or
alleged untrue statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Trust or the Guarantor by any of the
Underwriters for use in the Registration Statement or the Prospectus or any
amendment or supplement to either thereof or (ii) the failure of any Underwriter
to deliver (either directly or through the Representatives) a copy of the
Prospectus (excluding the documents incorporated therein by reference), or of
the Prospectus as amended or supplemented after it shall have been amended or
supplemented by the Guarantor (excluding the documents incorporated therein by
reference), to any person to whom a copy of any preliminary prospectus shall
have been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have been sold by such Underwriter, as such delivery
may be required by the Securities Act and the rules and regulations of the
Commission thereunder.
(b) Each of the Underwriters, severally and not jointly, agrees to
indemnify and hold harmless the Trust and the Guarantor, each of their officers
who signs the Registration Statement, each of their directors, each person who
controls the Trust or the Guarantor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each other Underwriter and
each person, if any, who so controls such other Underwriter, from and against
any and all losses, claims, damages or liabilities, joint or several, to which
any one or more of them may become subject under the Securities Act, the
Exchange Act or the common law or otherwise, and to reimburse each of them for
any reasonable legal or other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in connection with defending
against any such losses, claims, damages or liabilities of the character above
specified arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus or any amendment to the Registration Statement or amendment or
supplement to the Prospectus or upon any omission or alleged omission to state
in any thereof a material fact required to be stated therein or necessary to
make the statements therein not misleading if such statement or omission was
made in reliance upon and in conformity with information furnished in writing to
the Trust or the Guarantor by such Underwriter for use in the Registration
Statement or the Prospectus or any amendment or supplement to either thereof or
(ii) the failure of such Underwriter, due to the negligence of such Underwriter,
to deliver (either directly or through the Representatives) a copy of the
Prospectus (excluding the documents incorporated therein by reference), or of
the Prospectus as amended or supplemented after it shall have been amended or
supplemented by the Guarantor (excluding the documents incorporated therein by
reference), to any person to whom a copy of any preliminary prospectus shall
have been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have sold by such Underwriter, as such delivery may
be required by the Securities Act and the rules and regulations of the
Commission thereunder.
(c) Promptly after receipt by a party indemnified under this Section 8
(an "indemnified party") of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against a
party granting an indemnity under this Section 8 (the "indemnifying party"),
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof (thereby conceding that the action in question is subject to
indemnification by the indemnifying party), with counsel reasonably satisfactory
to such indemnified party, and shall pay the fees and disbursements of such
counsel related to such action; provided, however, that if the defendants in any
such action include both the indemnified party and the indemnifying party and
representation of both parties would be inappropriate due to actual or potential
differing interests between them, the indemnified party or parties shall have
the right to select separate counsel. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel), approved by the
Representatives in the case of subsection (a), representing the indemnified
parties under subsection (a) who are parties to such action and that all such
fees and expenses shall be reimbursed as they are incurred) or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that such liability
shall be only in respect of the counsel referred to in clause (i) or (ii). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section 8 shall be
unenforceable under applicable law by an indemnified party, the Trust and the
Guarantor, jointly and severally, agree to contribute to such indemnified party
with respect to any and all losses, claims, damages and liabilities for which
such indemnification provided for in this Section 8 shall be unenforceable, in
such proportion as shall be appropriate to reflect the relative fault of the
Trust and the Guarantor on the one hand and the indemnified party on the other
hand in connection with the statements or omissions which have resulted in such
losses, claims, damages and liabilities, as well as any other relevant equitable
considerations; provided, however, that no indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from the Trust or the
Guarantor if the Trust or the Guarantor, respectively, is not guilty of such
fraudulent misrepresentation. Relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust or the Guarantor or the indemnified
party and each such party's relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Trust, the Guarantor and each of the Underwriters agree that it would not be
just and equitable if contribution pursuant to this subparagraph were to be
determined solely by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
(e) The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
(f) The indemnity and contribution agreements contained in this Section
8 and the representations and warranties of the Trust and the Guarantor in the
Underwriting Agreement shall remain operative and in full force regardless of
(i) any termination of the Underwriting Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Trust or the Guarantor, their directors or officers or
any person controlling the Trust or the Guarantor and (iii) acceptance of and
payment for any of the Designated Securities.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
twenty-four hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Trust and
the Guarantor shall be entitled to a further period of twenty-four hours within
which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
the Trust and the Guarantor that they have so arranged for the purchase of such
Designated Securities, or the Trust or the Guarantor notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Trust and the Guarantor shall have the
right to postpone a Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Trust and the Guarantor agree to file
promptly any amendments or supplements to the Registration Statement or the
Prospectus which may be required in the opinion of counsel for the Guarantor.
The term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and the Guarantor as provided in subsection (a)
above, the aggregate number of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate number of the
Designated Securities to be purchased at the respective Time of Delivery, then
the Trust and the Guarantor shall have the right to require each non-defaulting
Underwriter to purchase the number of Designated Securities which such
Underwriter agreed to purchase under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Designated
Securities which such Underwriter agreed to purchase under such Pricing
Agreement) of the Designated Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and the Guarantor as provided in subsection (a)
above, the aggregate number of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate number of Designated Securities to be
purchased at the respective Time of Delivery, as referred to in subsection (b)
above, or if the Trust and the Guarantor shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter, the
Trust or the Guarantor, except for the expenses to be borne by the Guarantor and
the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, the Guarantor and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Trust, the Guarantor or any officer, trustee or director or controlling person
of the Trust or the Guarantor, and shall survive delivery of and payment for the
Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, neither the Trust nor the Guarantor shall then be under any liability to
any Underwriter with respect to the Designated Securities with respect to which
such Pricing Agreement shall have been terminated except as provided in Sections
6 and 8 hereof; but, if any Pricing Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part of
the Trust or the Guarantor to comply with the terms or to fulfill any of the
conditions of the Pricing Agreement (excluding those conditions set forth in
Section 7(j) hereof), or if for any reason the Trust or the Guarantor shall be
unable to perform its obligations under the Pricing Agreement, the Trust and the
Guarantor will reimburse the Underwriters or such Underwriters who have so
terminated the Pricing Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of Underwriters'
counsel) reasonably incurred by such Underwriters in connection with the Pricing
Agreement or the offering contemplated thereunder. Neither the Trust nor the
Guarantor shall in any event be liable to any of the Underwriters for damages on
account of loss of anticipated profits.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Trust or the Guarantor shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Trust or the
Guarantor, respectively, set forth in the Registration Statement, Attention:
Secretary; provided, however that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Trust and the Guarantor by the Representatives upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Trust, the Guarantor
and, to the extent provided in Sections 8 and 10 hereof, the officers, trustees
and directors of the Guarantor and the Trust and each person who controls the
Trust, the Guarantor or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any such Pricing
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return to us eight counterparts hereof.
Very truly yours,
Central Power and Light Company
By:
Name:
Title:
CPL Capital I
By: Central Power and Light Company, as
Depositor
By:
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Smith Barney Inc.
By:_____________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
Annex I
Pricing Agreement
May 8, 1997
Goldman, Sachs & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Smith Barney Inc.,
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
CPL Capital I, a statutory business trust formed under the laws of the
State of Delaware (the "Trust") and Central Power and Light Company, a Texas
corporation (the "Guarantor"), each proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated May 8, 1997
(the "Underwriting Agreement"), among the Trust and the Guarantor on the one
hand and Goldman, Sachs & Co., Lehman Brothers Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Smith Barney Inc. on the other hand, to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedule II hereto (the "Designated Securities"). Each
of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust, at the time and place and
at the purchase price to the Underwriters set forth in Schedule II hereto, the
number of Designated Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Trust and the Guarantor. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Trust and the Guarantor for examination but without
warranty on the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
CPL Capital I
By:______________________________
Name:
Title:
Central Power and Light Company
By:______________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Smith Barney Inc.
By:
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Number of
Designated Securities
Underwriter to be Purchased
Goldman, Sachs & Co................................. 1,090,000
Lehman Brothers Inc.................................. 1,090,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................... 1,090,000
Smith Barney Inc.................................... 1,090,000
Advest, Inc....................................... 40,000
Robert W. Baird & Co. Incorporated.. .............. 40,000
Bear, Stearns & Co. Inc........................... 75,000
J.C. Bradford & Co................................. 40,000
Alex, Brown & Sons Incorporated................... 75,000
Cowen & Company.................................... 40,000
Dain Bosworth Incorporated......................... 40,000
Donaldson, Lufkin & Jenrette
Securities Corporation........... 75,000
A.G. Edwards & Sons, Inc........................... 75,000
EVEREN Securities, Inc............................. 75,000
Fahnestock & Co. Inc............................... 40,000
Interstate/Johnson Lane Corporation................ 40,000
Janney Montgomery Scott Inc........................ 40,000
Legg Mason Wood Walker, Incorporated............... 40,000
McDonald & Company Securities, Inc................. 40,000
McGinn, Smith & Co., Inc............................. 40,000
J.P. Morgan Securities Inc......................... 75,000
Morgan Keegan & Company, Inc....................... 40,000
The Ohio Company.................................... 40,000
Olde Discount Corporation.......................... 40,000
Oppenheimer & Co., Inc............................. 75,000
Piper Jaffray Inc.................................. 40,000
Principal Financial Securities, Inc................ 40,000
Prudential Securities Incorporated................. 75,000
Rauscher Pierce Refsnes, Inc....................... 40,000
Raymond James & Associates, Inc.................... 40,000
The Robinson-Humphrey Company, Inc................. 40,000
Roney & Co., L.L.C................................. 40,000
Southwest Securities, Inc.......................... 40,000
Stephens Inc....................................... 40,000
Trilon International Inc........................... 40,000
Tucker Anthony Incorporated........................ 40,000
U.S. Clearing Corp................................. 40,000
Wheat, First Securities, Inc....................... 40,000
-----------
Total...................................... 6,000,000
=========
<PAGE>
SCHEDULE II
Title of Designated Securities:
8.00% Quarterly Income Preferred Securities, Series A
Number of Designated Securities:
6,000,000
Initial Offering Price to Public:
$25.00 per Preferred Security
Commission Payable to Underwriters:
$0.7875 per Preferred Security; provided, that such commission will be $0.50 per
Preferred Security sold to certain institutions, in Federal (same day) Funds by
wire transfer
Form of Designated Securities:
Book-entry only form represented by one or more global securities deposited with
The Depository Trust Company ("DTC") or its designated custodian for trading in
the Same Day Funds Settlement System of DTC, and to be made available for
checking by the Representatives at least twenty-four hours prior to the Time of
Delivery at the office of DTC
Specified Funds for Payment of Purchase Price:
Federal (same day) Funds by wire transfer
Time of Delivery:
The Underwriters shall pay for, and the Designated Securities shall be
concurrently delivered, at the Closing Location at 9:00 a.m. (New York City
time), on May 14, 1997 or at such other place and time, not later than May 21,
1997, as shall be mutually agreed. In accordance with Rule 15c6-1(d) promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Underwriters agree to this alternative date for payment of funds and delivery of
the Designated Securities in lieu of that required by paragraphs (a) and (c) of
Rule 15c6-1 of the Exchange Act.
Closing Location:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Names and addresses of Representatives:
Designated Representatives
Address for Notices, etc.:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Don Hansen
Lehman Brothers Inc.
3 World Financial Center
200 Vesey Street
New York, New York 10285
Attention: Greg Hall
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch & Co.
World Financial Tower
North Tower
New York, New York 10281
Attention: Joseph Lance
Smith Barney Inc.
390 Greenwich Street
New York, New York 10013
Attention: Edward P. Meehan
<PAGE>
ANNEX III
Form of letter of Arthur Andersen LLP
to be delivered pursuant to Section 7(e)
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Guarantor and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Prospectus or the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act,
as applicable, and the related published rules and regulations
thereunder, and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Guarantor for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representatives of the Underwriters
(the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or the Guarantor's quarterly reports on
Form 10-Q incorporated by reference into the Prospectus as indicated in
their reports thereon copies of which have been separately furnished to
the Representatives; and on the basis of specified procedures including
inquiries of officials of the Guarantor who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Guarantor for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Guarantor's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Guarantor's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of Items 301, 302,
402 and 503(d) respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Guarantor and its subsidiaries,
inspection of the minute books of the Guarantor and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Guarantor and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in the
Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Guarantor's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Guarantor's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included or incorporated by reference in the Prospectus) or
any increase in the consolidated long-term debt of the
Guarantor and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenue or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period in the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Guarantor and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference), or
in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents incorporated
by reference in the Prospectus specified by the Representatives, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Guarantor and its
subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement and to the Prospectus as amended
or supplemented (including all documents incorporated by reference therein) for
the purposes of the letter delivered either (i) on the effective date of any
post-effective amendment to the Registration Statement or Rule 462(b)
Registration Statement filed subsequent to the date of the Underwriting
Agreement or (ii) at the Time of Delivery, as the case may be.
Exhibit 16
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
May 27, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Central and South West Corporation, et al.
Certificate of Notification to Form U-1
Application-Declaration(File No. 70-8979)
Ladies and Gentlemen:
We refer to the Form U-1 Application-Declaration, as amended
(the "Application"), and the Certificate of Notification thereto, under the
Public Utility Holding Company Act of 1935, as amended (the "1935 Act"), filed
by Central and South West Corporation ("CSW"), a Delaware corporation and a
registered holding company, and Central Power and Light Company ("CPL"), Public
Service Company of Oklahoma ("PSO"), Southwestern Electric Power Company
("SWEPCO") and West Texas Utilities Company ("WTU"). CPL, PSO, SWEPCO and WTU
are sometimes hereinafter referred to as the "Operating Subsidiaries". The
Certificate of Notification relates to (i) the issuances by CPL, PSO and SWEPCO
of unsecured junior subordinated debentures ("Debentures") and indirectly
through a newly-established trust, tax-advantaged, preferred securities
("Preferred Securities"), pursuant to an Indenture, as supplemented (the
"Indenture") and an Amended and Restated Trust Agreement (the "Trust
Agreement"), respectively, and certain guarantees in relation to such issuances
(the "Guarantees"), (ii) the solicitation of proxies from the preferred and
common shareholders of the Operating Subsidiaries by the Operating Subsidiaries
to remove unsecured debt limitations in the Operating Subsidiaries' charters
(the "Solicitations") and (iii) the purchase by CSW of shares of certain series
of preferred stock of the Operating Subsidiaries pursuant to cash tender offers
made by CSW (the "Offers"), all as set forth in the Application and the
Certificate of Notification (the "Transactions"). The Preferred Securities were
issued in each instance, by a Delaware statutory business trust (each a "Trust,"
and together the "Trusts"), the common interests of which were acquired by the
respective Operating Subsidiary. We have acted as counsel for CSW and the
Operating Subsidiaries and, as such counsel, we are familiar with the corporate
proceedings taken by CSW and the Operating Subsidiaries in connection with the
Transactions as described in the Application and the Certificate of
Notification.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of CSW and the Operating Subsidiaries,
certificates of public officials, certificates of officers and representatives
of CSW and the Operating Subsidiaries and other documents as we have deemed it
necessary to require as a basis for the opinions hereinafter expressed. In such
examination we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies. As to various
questions of fact material to such opinions we have, when relevant facts were
not independently established, relied upon certificates by officers of CSW and
the Operating Subsidiaries and other appropriate persons and statements
contained in the Application.
Based upon the foregoing, and having regard to legal
considerations which we deem relevant, we are of the opinion that:
1. CSW, the Operating Subsidiaries and the Trusts are validly
organized and duly existing under the laws of the jurisdictions of
their organization.
2. All state laws applicable to the issuances of the
Debentures, the Preferred Securities, the Guarantees, the Solicitations
and the Offers have been complied with (other than so-called "blue-sky"
or state securities laws as to which we express no opinion).
3. The Debentures and the Guarantees issued by CPL, PSO and
SWEPCO are valid and binding obligations of the respective Operating
Subsidiary in accordance with their terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization, moratorium or other similar
laws of general applicability relating to or affecting the enforcement
of creditors' rights generally and to the effects of general principles
of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law), including without limitation (a) the
possible unavailability of specific performance, injunctive relief or
any other equitable remedies and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
4. The Preferred Securities are valid and binding
obligations of the Trusts in accordance with their terms,
subject to the qualifications stated in paragraph 3 above.
5. CSW lawfully acquired the shares of the Operating
Subsidiaries' preferred stock tendered pursuant to the Offers.
6. The Operating Subsidiaries lawfully acquired from
CSW the shares of preferred stock acquired by CSW pursuant to the
Offers.
7. Each of CPL, PSO and SWEPCO lawfully acquired the
common interests of their respective Trust.
8. The consummation by CSW, the Operating Subsidiaries and the
Trusts of the Transactions did not violate the legal rights of the
holders of any securities issued by CSW or the Operating Subsidiaries
or any "associate" company, as such term is defined in the 1935 Act,
thereof.
9. The Transactions, as described in the Application
and the Certificate of Notification, have been carried out in
accordance with the terms and conditions of the Application.
In rendering the opinions hereinabove expressed, we have
relied upon opinions of other counsel to CSW and the Operating Subsidiaries who
are qualified to practice in jurisdictions pertaining to the transactions
described above in which we are not admitted to practice. We do not express any
opinion as to matters governed by any laws other than the Federal laws of the
United States of America, the laws of the State of New York, and in connection
with opinion 1 above as it relates to CSW and SWEPCO, the General Corporation
Law of the State of Delaware, and, to the extent hereinabove stated, the laws of
other jurisdictions pertaining to the transactions described above in reliance
upon said opinions of counsel to CSW and the Operating Subsidiaries.
We hereby consent to the use of this opinion as an exhibit to
the Certificate of Notification.
Very truly yours,
/s/ Milbank, Tweed, Hadley & McCloy
Exhibit 17
BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA
IN THE MATTER OF THE APPLICATION )
OF PUBLIC SERVICE COMPANY OF )
OKLAHOMA ("PSO") FOR AUTHORITY TO ) CAUSE NO. PUD 970
ISSUE JUNIOR SUBORDINATED DEBENTURES )
AND/OR PREFERRED SECURITIES )
AND GUARANTEES. )
APPLICATION FOR CERTIFICATE OF AUTHORITY
----------------------------------------
1. APPLICANT: Public Service Company of Oklahoma
--------- P. O. Box 201
Tulsa, Oklahoma 74103
2. ALLEGATIONS OF FACT:
-------------------
(a) Applicant is a corporation organized under the laws of the State of
Oklahoma and is a public utility as defined by 17 O.S. Section 181(1). PSO owns
and operates properties and facilities which are used for supplying electric
power in the State of Oklahoma.
(b) PSO proposes to issue up to $77,500,000 of Junior Subordinated
Debentures and/or up $75,000,000 of Preferred Securities similar to tax
deductible preferred securities currently in the marketplace for the purpose of
retiring outstanding first mortgage bonds, for the purpose of retiring or
replacing outstanding preferred stock, or any combination thereof, for the
payment of outstanding short-term borrowings and for other general corporate
purposes. If Preferred Securities are issued, PSO proposes to issue and sell
such preferred securities from time to time in one or more series, directly, or
indirectly through a special purpose financing subsidiary or affiliate of PSO
established for that purpose. PSO also proposes to issue Guarantees of the
payment of dividends and other matters related to
<PAGE>
the Preferred Securities. Each series of Junior Subordinated Debentures and
Preferred Securities will mature in not more than 49 years.
(c) The issuance and sale of the Junior Subordinated Debentures and/or
Preferred Securities may be made at any time or from time to time in one or more
series.
(d) The most recent "Balance Sheet" as required by 17 O.S. Section 185(4) is
attached hereto as Exhibit "A".
(e) The Form U-1 Application - Declaration filed at the Securities and
Exchange Commission is being provided to Ms. Maribeth Snapp, Deputy General
Counsel, with the filing of this Application.
(f) PSO states that the granting of the Certificate of Authority will be in
the public interest, as the issuance of such Preferred Securities and/or Junior
Subordinated Debentures will allow PSO to lower its financing costs to the
benefit of PSO's investors and electric utility customers. PSO is not requesting
that this Commission make a determination as to the appropriate- ness of any
action taken by the Board of Directors of Public Service Company of Oklahoma
pursuant to the authority granted by this Application.
3. LEGAL AUTHORITY:
---------------
17 O.S. Section 181 et. seq.
4. RELIEF SOUGHT:
-------------
Public Service Company of Oklahoma respectfully requests this Commission
issue a Certificate of Authority as provided by 17 O.S. Section 185(2),
authorizing the issuance or sale of Junior Subordinated Debentures and/or
Preferred Securities as requested herein.
Respectfully submitted,
WHITE, COFFEY, GALT & FITE, P.C.
-------------------------------
Jack P. Fite, OBA #2949
Jay M. Galt, OBA #3220
6520 N. Western, Suite 300
Oklahoma City, Oklahoma 73116
(405) 842-7545
ATTORNEYS FOR PUBLIC SERVICE
COMPANY OF OKLAHOMA
STATE OF OKLAHOMA )
) ss.
COUNTY OF TULSA )
William R. McKamey, being General Manager, Public Service Company of
Oklahoma, of lawful age, being first duly sworn, states that she/he has read the
foregoing Application for Certificate of Authority and knows the contents
thereof and the matters and things set forth are true and correct to the best of
her/his knowledge and belief.
/s/ William R. McKamey
Public Service Company of Oklahoma
SUBSCRIBED AND SWORN TO before me this 18th day of February, 1997.
/s/ Lina P. Holm
Notary Public
My Commission Expires:
January 28, 1997
BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA
IN THE MATTER OF THE APPLICATION )
OF PUBLIC SERVICE COMPANY OF )
OKLAHOMA ("PSO") FOR AUTHORITY TO ) CAUSE NO. PUD 970000102
ISSUE JUNIOR SUBORDINATED DEBENTURES )
AND / OR PREFERRED SECURITIES )
AND GUARANTEES. ) ORDER NO. 411174
HEARING: April 7, 1997
Before Robert E. Goldfield
Administrative Law Judge
APPEARANCES: Jack P. Fite, Public Service Company of Oklahoma
Jacqueline Miller, Oklahoma Corporation
Commission, Public Utility Division
FINAL ORDER
BY THE COMMISSION:
The Corporation Commission of the State of Oklahoma being in session
with the undersigned Commissioners present and participating, there comes on for
hearing the Application of Public Service Company of Oklahoma, a corporation
organized and existing under the laws of the State of Oklahoma (herein after
sometimes referred to a "Applicant"), seeking a Certificate of Authority
authorizing Applicant to issue up to $77,500,000 of Junior Subordinated
Debentures and/or up to $75,000,000 of Preferred Securities similar to tax
deductible preferred securities currently in the market place for the purpose of
retiring outstanding first mortgage bonds, for the purpose of retiring or
replacing outstanding preferred stock, or any combination thereof, for the
payment of outstanding short-term borrowings and for other general corporate
purposes.
The Commission, having examined and considered the Application herein,
together with the Exhibits thereto, and the testimony presented by the Applicant
and Staff, and being fully advised in the premises, finds:
Applicant is a public utility subject to the provisions of 17 O.S.
Section 181 et seq., and this Commission has jurisdiction to entertain the
Application submitted pursuant thereto and to issue the Certificate of Authority
requested by Applicant in such Application.
It is not necessary that Notice of Hearing be given or published in
this Cause.
The issuance of the Junior Subordinated Debentures and/or of Preferred
Securities, and other agreements, obligations and undertakings, would come
within the definition of a security set forth in 17 O.S. Section 181(3).
The Junior Subordinated Securities and/or Preferred Securities, will in
no way constitute a series under Applicant's existing trust indenture dated July
1, 1945, nor will they create or give rise to or be secured by a lien on any of
the property of Applicant located in the State of Oklahoma.
The Application, together with the exhibits attached thereto and
evidence presented by Applicant, comply with requirements of the above-cited
statutory provisions and for such reasons herein and to the extent authority is
required, the Certificate of Authority requested by Applicant should be and is
hereby granted.
ORDER
IT IS HEREBY ORDERED that a Certificate of Authority be and the same is
hereby issued to Public Service Company of Oklahoma authorizing issuance up to
$77,500,000 of Junior Subordinated Debentures and/or up to $75,000,000 of
Preferred Securities as requested in the Application for a Certificate of
Authority.
IT IS FURTHER ORDERED that this Certificate of Authority shall be in
effect from and after the date hereof.
OKLAHOMA CORPORATION COMMISSION
-----------------------------
CODY L. GRAVES, Chairman
/s/ Bob Anthony
BOB ANTHONY, Vice Chairman
/s/ Ed Apple
ED APPLE, Commissioner
DONE AND PERFORMED THIS 10TH Day of April, 1997.
BY ORDER OF THE COMMISSION:
/s/ Charlotte W. Flanagan
CHARLOTTE W. FLANAGAN, Secretary
REPORT OF ADMINISTRATIVE LAW JUDGE
The foregoing findings and order are the Report and Recommendations of
the Administrative Law Judge.
/s/ Robert E. Goldfield April 7, 1997
ROBERT E. GOLDFIELD DATE
