As filed with the Securities and Exchange Commission on February 5, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Central Power and Light Company CPL Capital I (333- )
(Exact name of Registrant as specified CPL Capital II (333- )
in charter) (Exact names of Registrants as
specified in Trust Agreements)
Texas Delaware
State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
74-0550600 Each to be applied for
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
539 North Carancahua Street
Corpus Christi, Texas 78401-2802
(512) 881-5300
(Address, including zip code, and telephone
number, including area code, of Registrants'
principal executive offices)
M. BRUCE EVANS ROBERT B. WILLIAMS, ESQ.
0 President JORIS M. HOGAN, ESQ.
Central Power and Light Company Milbank, Tweed, Hadley & McCloy
539 North Carancahua Street 1 Chase Manhattan Plaza
Corpus Christi, Texas 78401-2802 New York, New York 10005
(512) 881-5300 (212) 530-5000
(Names, addresses, including zip codes, and
telephone numbers, including area codes, of agents
for service)
Approximate date of proposed sale to the public: From time to time
after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed maximum Proposed maximum Amount
Title of each class of ........... Amount to be offering price per aggregate offering of registration
securities being registered ........ registered unit (1) price (1) fee (2)
- ------------------------------------------- ------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Central Power and Light Company Junior
Subordinated Deferrable Interest
Debentures
- ------------------------------------------- ------------- --------------- --------------- --------------
CPL Capital I and II
Preferred Securities
- ------------------------------------------- ------------ --------------- --------------- --------------
Central Power and Light Company
Guarantees with respect to Preferred
Securities (3)(4)
=========================================== ============= =============== =============== ==============
Total ..................................... $ 150,000,000 100% $150,000,000 $45,455
(5) (5)
=========================================== ============= =============== =============== ==============
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) The amount of the registration fee has been calculated in accordance with
Rule 457(o) under the Securities Act of 1933.
(3) No separate consideration will be received for the Central Power and Light
Company Guarantees.
(4) This Registration Statement is deemed to include the rights of holders of
the Preferred Securities and the obligations of Central Power and Light
Company ("Back-Up Obligations") under (i) the Guarantees, (ii) the Junior
Subordinated Deferrable Interest Debentures (including Corresponding
Junior Subordinated Deferrable Interest Debentures), (iii) the Trust
Agreements for CPL Capital I and CPL Capital II, (iv) the Indenture and
Supplemental Indentures under which the Junior Subordinated Deferrable
Interest Debentures or Corresponding Junior Subordinated Deferrable
Interest Debentures will be issued and (v) the Expense Agreements in which
Central Power and Light Company undertakes to pay all of the expenses of
CPL Capital I and CPL Capital II, except for obligations under the
Preferred Securities, as described in this Registration Statement.
(5) Represents (a) the principal amount of the Junior Subordinated Deferrable
Interest Debentures issued at their principal amount and (b) the initial
public offering price of CPL Capital I and II Preferred Securities. No
separate consideration will be received for any Central Power and Light
Company Guarantees or Central Power and Light Company Junior Subordinated
Deferrable Interest Debentures in connection with an issuance of Preferred
Securities by CPL Capital I and II. The amount to be registered, the
proposed maximum offering price per unit and the proposed maximum
aggregate offering price for each class of securities being registered
have been omitted in accordance with General Instruction II.D. of Form
S-3.
------------------------------
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
- -------------------------------------------------------------------------------
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS TO WHICH IT
RELATES SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED _______ __, 1997
6,000,000 Preferred Securities*
CPL Capital I
___% Cumulative Quarterly Income Preferred Securities,
Series A (QUIPS(SM))**
(liquidation preference $25 per preferred security)
guaranteed, as described herein, by
Central Power and Light Company
---------
The ___% Cumulative Quarterly Income Preferred
Securities, Series A (the "Series A Preferred Securities"), offered
hereby represent undivided beneficial interests in the assets of CPL
Capital I, a trust created under the laws of the State of Delaware
("CPL Capital I"). Central Power and Light Company, a Texas corporation
("CPL"), will be the owner of all of the beneficial interests
represented by common securities of CPL Capital I ("Series A Common
Securities"). The Bank of New York is the Property Trustee of CPL
Capital I. CPL Capital I exists for the sole purpose of issuing the
Series A Preferred Securities and the Series A Common Securities and
investing the proceeds thereof in __% Junior Subordinated Deferrable
(Continued on next page)
---------
See "Risk Factors" beginning on page S-6 hereof for certain information
relevant to an investment in the Series A Preferred Securities.
---------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------
Proceeds to
Initial Public Underwriting CPL
Offering Price Commission(1) Capital I(2)(3)
Per Series A .... $ (2) $
Preferrred Security......
Total....................$ (2) $
----------
(1) CPL Capital I and CPL have agreed to indemnify the several
Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
See "Underwriting."
(2) In view of the fact that the proceeds of the sale of the
Series A Preferred Securities will be used to purchase the
Series A Debentures, the Underwriting Agreement provides that
CPL will pay to the Underwriters, as compensation
("Underwriters' Compensation") for their arranging the
investment therein of such proceeds, $______ per Series A
Preferred Security; provided, that such compensation will be
$___ per Series A Preferred Security sold to certain
institutions. Accordingly, the maximum aggregate amount of
Underwriters' Compensation will be $_________, but the actual
amount of Underwriters' Compensation will be less than such
amount to the extent that Series A Preferred Securities are
sold to such institutions. See "Underwriting."
(3) Expenses of the offering, which are payable by CPL, are
estimated to be $250,000.
---------
The Series A Preferred Securities offered hereby are offered severally by
the Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the Series A Preferred Securities will be ready for delivery in
book-entry form only through the facilities of The Depository Trust Company in
New York, New York, on or about __________, 1997, against payment therefor in
immediately available funds.
----------
Goldman, Sachs & Co.
Lehman Brothers
Merrill Lynch & Co.
Smith Barney Inc.
---------
The date of this Prospectus Supplement
is ____, 1997.
---------------
* Preliminary, subject to change.
** QUIPS is a servicemark of Goldman, Sachs & Co.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE SERIES A PREFERRED SECURITIES AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY
BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
---------
(Continued from previous page)
Interest Debentures, Series A (the "Series A Debentures") to be issued
by CPL. The Series A Debentures will mature on ________, 2037, which
date may be shortened to a date not earlier than ________, 2002. The
Series A Debentures are redeemable prior to maturity at the option of
CPL as described below. The Series A Preferred Securities will have a
preference under certain circumstances with respect to cash
distributions and amounts payable on liquidation, redemption or
otherwise over the Series A Common Securities. See "Description of
Preferred Securities--Subordination of Common Securities" in the
accompanying Prospectus.
Holders of the Series A Preferred Securities will be entitled
to receive preferential cumulative cash distributions accruing from the
date of original issuance and payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year, commencing
__________, 1997, at the annual rate of __% of the liquidation
preference of $25 per Series A Preferred Security ("Distributions").
CPL has the right to defer the payment of interest on the Series A
Debentures at any time or from time to time for one or more periods
(each, an "Extension Period"), provided that such Extension Period,
together with all previous and further extensions thereof prior to its
termination, does not exceed 20 consecutive quarters and does not
extend beyond the maturity of the Series A Debentures. Upon the
termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date (as defined herein), CPL may
elect to begin a new Extension Period subject to the requirements set
forth herein. If interest payments on the Series A Debentures are so
deferred, Distributions on the Series A Preferred Securities will also
be deferred and CPL will not be permitted, subject to certain
exceptions set forth herein, to declare or pay any cash distributions
with respect to CPL's capital stock or debt securities that rank pari
passu with or junior to the Series A Debentures. During an Extension
Period, interest on the Series A Debentures will continue to accrue
(and the amount of Distributions to which holders of the Series A
Preferred Securities are entitled will accumulate at the rate of __%
per annum, compounded quarterly) and holders of Series A Preferred
Securities will be required to accrue interest income for United States
federal income tax purposes in advance of receipt of cash related to
such interest income. See "Certain Terms of the Series A
Debentures--Option to Extend Interest Payment Period" and "Certain
Federal Income Tax Considerations--Potential Extension of Interest
Payment Period and Original Issue Discount."
CPL has, through the Series A Guarantee, the Trust Agreement,
the Series A Debentures, the Indenture and the Expense Agreement (each
as defined herein), taken together, fully, irrevocably and
unconditionally guaranteed all of CPL Capital I's obligations under the
Series A Preferred Securities. The Series A Guarantee guarantees the
payment of Distributions and payments on liquidation or redemption of
the Series A Preferred Securities, but only in each case to the extent
of funds held by CPL Capital I, as described herein (the "Series A
Guarantee"). See "Description of Guarantees" in the accompanying
Prospectus. If CPL does not make interest payments on the Series A
Debentures held by CPL Capital I, CPL Capital I will have insufficient
funds to pay Distributions on the Series A Preferred Securities. The
Series A Guarantee does not cover payment of Distributions when CPL
Capital I does not have sufficient funds to pay such Distributions. In
such event, a holder of Series A Preferred Securities may have the
right to institute a legal proceeding directly against CPL to enforce
payment to such holder of the principal of or interest on the
Corresponding Junior Subordinated Debentures as described in
"Description of Preferred Securities--Enforcement of Certain Rights by
Holders of Preferred Securities" in the accompanying Prospectus. The
obligations of CPL under the Series A Guarantee and the Series A
Debentures are subordinate and junior in right of payment to all Senior
Indebtedness (as defined in "Description of Junior Subordinated
Debentures--Subordination" in the accompanying Prospectus) of CPL.
The Series A Preferred Securities are subject to mandatory
redemption, in whole or in part, upon repayment of the Series A
Debentures at maturity or their earlier redemption in an amount equal
to the amount of related Series A Debentures maturing or being redeemed
at a redemption price equal to the aggregate liquidation preference of
such Series A Preferred Securities plus accumulated and unpaid
Distributions thereon to the date of redemption. The Series A
Debentures are redeemable prior to maturity at the option of CPL (i) on
or after _________, 2002 in whole at any time or in part from time to
time, at a redemption price equal to the accrued and unpaid interest on
the Series A Debentures so redeemed to the date fixed for redemption,
plus 100% of the principal amount thereof, or (ii) at any time, in
whole (but not in part), within 90 days of the occurrence of a Special
Event (as defined herein), at a redemption price equal to the accrued
and unpaid interest on the Series A Debentures so redeemed to the date
fixed for redemption, plus 100% of the principal amount thereof, in
each case subject to the further conditions described under
"Description of Junior Subordinated Debentures--Redemption" and
"Description of Corresponding Junior Subordinated Debentures--Optional
Redemption" in the accompanying Prospectus.
At any time, CPL will have the right to terminate CPL Capital
I and, after satisfaction of liabilities to creditors of CPL Capital I
as required by applicable law, cause the Series A Debentures to be
distributed to the holders of the Series A Preferred Securities in
liquidation of CPL Capital I. See "Certain Terms of the Series A
Preferred Securities--Distribution of Series A Debentures."
The Series A Debentures are subordinate and junior in right of
payment to all Senior Indebtedness of CPL. As of December 31, 1996,
CPL had approximately $1,671 million aggregate principal amount of
Senior Indebtedness outstanding. The terms of the Series A Debentures
place no limitation on the amount of Senior Indebtedness that may be
incurred by CPL. In addition, the Series A Debentures will be
effectively subordinated to all existing and future liabilities of
CPL's subsidiaries, if any, and holders of Series A Debentures should
look only to the assets of CPL for payments on Series A Debentures.
See "Description of Junior Subordinated Debentures--Subordination" in
the accompanying Prospectus.
In the event of the termination of CPL Capital I, after
satisfaction of creditors of CPL Capital I as provided by applicable
law, the holders of the Series A Preferred Securities will be entitled
to receive a liquidation preference of $25 per Series A Preferred
Security plus accumulated and unpaid Distributions thereon to the date
of payment, which may be in the form of a distribution of such Like
Amount in Series A Debentures, subject to certain exceptions. See
"Description of Preferred Securities--Liquidation Distribution Upon
Termination" in the accompanying Prospectus.
Application will be made to list the Series A Preferred
Securities on the New York Stock Exchange (the "NYSE") under the symbol
"_______". Trading of the Series A Preferred Securities on the NYSE is
expected to commence within thirty days after the initial delivery of
the Series A Preferred Securities. If the Series A Debentures are
distributed to the holders of Series A Preferred Securities upon the
liquidation of CPL Capital I, CPL will use its best efforts to list the
Series A Debentures on the NYSE or such other stock exchanges or other
organizations, if any, on which the Series A Preferred Securities are
then listed.
The Series A Preferred Securities will be represented by one
or more global certificates registered in the name of The Depository
Trust Company ("DTC") or its nominee. Beneficial interests in the
Series A Preferred Securities will be shown on, and transfers thereof
will be effected only through, records maintained by participants in
DTC. Except as described in the accompanying Prospectus, Series A
Preferred Securities in certificated form will not be issued in
exchange for the global certificates. See "Description of Preferred
Securities--Book-entry Issuance" in the accompanying Prospectus.
<PAGE>
The following information supplements and should be read in
conjunction with the information contained in the accompanying
Prospectus. As used herein, (i) the "Indenture" means the Indenture, as
amended and supplemented from time to time, including the First
Supplemental Indenture relating to the Series A Debentures, between CPL
and The Bank of New York, as trustee (the "Debenture Trustee"), and
(ii) the "Trust Agreement" means the Amended and Restated Trust
Agreement among CPL, as Depositor, The Bank of New York, as Property
Trustee (the "Property Trustee"), The Bank of New York (Delaware), as
Delaware Trustee (the "Delaware Trustee"), and the Administrative
Trustees named therein (collectively, with the Property Trustee and the
Delaware Trustee, the "Issuer Trustees"). Each of the other capitalized
terms used in this Prospectus Supplement and not otherwise defined in
this Prospectus Supplement has the meaning set forth in this Prospectus
Supplement or in the accompanying Prospectus.
RISK FACTORS
Prospective purchasers of the Series A Preferred Securities
should carefully review the information contained elsewhere in this
Prospectus Supplement and in the accompanying Prospectus and should
particularly consider the following matters.
Ranking of Subordinated Obligations Under the Series A Guarantee and
the Series A Debentures
The obligations of CPL under the Series A Guarantee issued by
CPL for the benefit of the holders of Series A Preferred Securities are
unsecured and rank subordinate and junior in right of payment to all
Senior Indebtedness of CPL. The obligations of CPL under the Series A
Debentures are subordinate and junior in right of payment to all such
Senior Indebtedness. At December 31, 1996, the Senior Indebtedness of
CPL aggregated approximately $1,671 million. In addition, the Series A
Debentures will be effectively subordinated to all existing and future
liabilities of CPL's subsidiaries, if any, and holders of Series A
Debentures should look only to the assets of CPL for payments on the
Series A Debentures. None of the Indenture, the Series A Guarantee or
the Trust Agreement places any limitation on the amount of secured or
unsecured debt, including Senior Indebtedness, that may be incurred by
CPL. See "Description of Guarantees--Status of the Guarantees" and
"Description of Junior Subordinated Debentures--Subordination" in the
accompanying Prospectus.
The ability of CPL Capital I to pay amounts due on the Series
A Preferred Securities is solely dependent upon CPL making payments on
the Series A Debentures as and when required.
Option to Extend Interest Payment Period; Tax Consequences; Potential
Market Volatility During Extension Period
CPL has the right under the Indenture to defer the payment of
interest on the Series A Debentures at any time or from time to time
for one or more Extension Periods, each of which, together with all
previous and further extensions of such Extension Period prior to its
termination, may not exceed 20 consecutive quarters and may not extend
beyond the maturity of the Series A Debentures. As a consequence of any
such election, quarterly Distributions on the Series A Preferred
Securities by CPL Capital I will be deferred (and the amount of
Distributions to which holders of the Series A Preferred Securities are
entitled will continue to accumulate at the rate of __% per annum,
compounded quarterly) during any such Extension Period. During any such
Extension Period, CPL may not, and may not permit any subsidiary of CPL
to, (i) declare, set aside or pay any dividend or distribution on, or
repurchase, redeem, or otherwise acquire or make any sinking fund
payment with respect to, any shares of CPL's capital stock or (ii) make
any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities (including other Junior
Subordinated Debentures) that rank pari passu with or junior in
interest to the Series A Debentures or make any guarantee payments with
respect to the foregoing (other than (a) dividends or distributions in
shares of its capital stock or in rights to acquire shares of its
capital stock, (b) conversions into or exchanges for shares of its
capital stock, (c) redemptions, purchases or other acquisitions of
shares of its capital stock made for the purpose of an employee
incentive plan or benefit plan of CPL or any of its subsidiaries and
mandatory redemptions or sinking fund payments with respect to any
series of Preferred Stock of CPL that are subject to mandatory
redemption or sinking fund requirements, provided that the aggregate
stated value of all such series outstanding at the time of any such
payment does not exceed five percent of the aggregate of (1) the total
principal amount of all bonds or other securities representing secured
indebtedness issued or assumed by CPL and then outstanding and (2) the
capital and surplus of CPL to be stated on the books of account of CPL
after giving effect to such payment, provided, however, that any moneys
deposited in any sinking fund and not in violation of this provision
may thereafter be applied to the purchase or redemption of such
Preferred Stock in accordance with the terms of such sinking fund
without regard to the restrictions contained in this provision, and (d)
payments under any guarantee by CPL with respect to any securities of a
subsidiary of CPL, provided that the proceeds from the issuance of such
securities were used to purchase Junior Subordinated Debentures of any
series under the Indenture). Upon the termination of any Extension
Period and the payment of all amounts then due on any Interest Payment
Date, CPL may elect to begin a new Extension Period subject to the
above requirements. Consequently, there could be multiple Extension
Periods of varying lengths throughout the term of the Series A
Debentures. See "Certain Terms of the Series A Preferred
Securities--Distributions" and "Certain Terms of the Series A
Debentures--Option to Extend Interest Payment Period."
Should an Extension Period occur, a holder of Series A
Preferred Securities must accrue interest income (as original issue
discount) on an economic accrual basis in respect of its pro rata share
of the Series A Debentures held by CPL Capital I for United States
federal income tax purposes. As a result, a holder of Series A
Preferred Securities will include such interest in gross income for
United States federal income tax purposes in advance of the receipt of
cash, and will not receive the cash related to such income from CPL
Capital I if the holder disposes of the Series A Preferred Securities
prior to the record date for the payment of Distributions. See "Certain
Federal Income Tax Considerations--Potential Extension of Interest
Payment Period and Original Issue Discount" and "--Sale or Redemption
of Series A Preferred Securities."
CPL has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Series A Debentures. However, should CPL elect to exercise such right
in the future, the market price of the Series A Preferred Securities is
likely to be affected. A holder that disposes of its Series A Preferred
Securities during an Extension Period, therefore, might not receive the
same return on its investment as a holder that continues to hold its
Series A Preferred Securities.
Special Event Redemption
Upon the occurrence of a Special Event, as described in
"Description of Preferred Securities--Redemption or Exchange--Special
Event Redemption or Distribution of Corresponding Junior Subordinated
Debentures" in the accompanying Prospectus, CPL has the right to redeem
the Series A Debentures in whole (but not in part) within 90 days
following the occurrence of such Special Event and thereby cause a
mandatory redemption of the Series A Preferred Securities at the
applicable redemption price. See "Description of Preferred
Securities--Redemption or Exchange--Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus.
Under current United States federal income tax law, such a
redemption of the Series A Preferred Securities would constitute a
taxable event to the holders thereof. See "Certain Federal Income Tax
Considerations--Sale or Redemption of Series A Preferred Securities."
Exchange of Series A Preferred Securities for Series A Debentures
CPL will have the right at any time to terminate CPL Capital I
and, after satisfaction of liabilities to creditors of CPL Capital I as
required by applicable law, cause the Series A Debentures to be
distributed to the holders of the Series A Preferred Securities in
liquidation of CPL Capital I. See "Certain Terms of Series A Preferred
Securities--Distribution of Series A Debentures."
Under current United States federal income tax law, provided
CPL Capital I is treated as a "grantor trust" at the time of the
distribution, a distribution of the Series A Debentures upon
liquidation of CPL Capital I should not be a taxable event to holders
of the Series A Preferred Securities. However, if at the time of the
distribution, CPL Capital I were subject to United States federal
income tax with respect to income received or accrued on the Series A
Debentures, a distribution of the Series A Debentures by CPL Capital I
would be a taxable event to CPL Capital I and the holders of the Series
A Preferred Securities. See "Certain Federal Income Tax
Considerations--Distribution of Series A Debentures to Holders of
Series A Preferred Securities."
There can be no assurance as to the market prices for Series A
Preferred Securities or Series A Debentures that may be distributed in
exchange for Series A Preferred Securities if a liquidation of CPL
Capital I occurs. Accordingly, the Series A Preferred Securities that
an investor may purchase, whether pursuant to the offer made hereby or
in the secondary market, or the Series A Debentures that a holder of
Series A Preferred Securities may receive on liquidation of CPL Capital
I, may trade at a discount to the price that the investor paid to
purchase the Series A Preferred Securities offered hereby. Holders of
Series A Preferred Securities may receive Series A Debentures upon
liquidation of CPL Capital I and prospective purchasers of Series A
Preferred Securities are also making an investment decision with regard
to the Series A Debentures and should carefully review all the
information regarding the Series A Debentures contained herein. See
"Description of the Preferred Securities--Redemption or
Exchange--Special Event Redemption or Distribution of Corresponding
Junior Subordinated Debentures" and "Description of the Corresponding
Junior Subordinated Debentures--General" in the accompanying
Prospectus.
Shortening of Stated Maturity of Series A Debentures; Market Price
CPL will have the right at any time and from time to time to
shorten the maturity of the Series A Debentures to a date not earlier
than _______, 2002 and thereby cause the Series A Preferred Securities
to be redeemed on such earlier date. If CPL does exercise such right,
there can be no assurance that the shortening of the maturity of the
Series A Debentures will not have an effect on the market price of the
Series A Preferred Securities or Series A Debentures that may be
distributed in exchange for Series A Preferred Securities.
Possible Tax Law Changes
On March 19, 1996, the Revenue Reconciliation Bill of 1996
(the "Revenue Reconciliation Bill"), the revenue portion of President
Clinton's budget proposal, was introduced in the 104th Congress. If
enacted, the Revenue Reconciliation Bill generally would have treated
as equity, for federal income tax purposes, an instrument issued by a
corporation that has a maximum term of more than 20 years and that is
not shown as indebtedness on the separate balance sheet of the issuer
or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a
related instrument that is not shown as indebtedness on the issuer's
consolidated balance sheet. If such provision were applied to the
Series A Debentures, CPL would be unable to deduct interest on the
Series A Debentures. Such provision was proposed to be effective
generally for instruments issued on or after December 7, 1995. However,
on March 29, 1996, the Chairmen of the Senate Finance and House Ways
and Means Committees issued a joint statement to the effect that it was
their intention that the effective date of the President's legislative
proposals, if adopted, would be no earlier than the date of appropriate
Congressional action. Under current law, CPL believes and intends to
take the position that interest on the Series A Debentures is
deductible. Although the 104th Congress adjourned without enacting the
above-described provision of the Revenue Reconciliation Bill, there can
be no assurance that current or future legislative proposals or final
legislation will not affect the ability of CPL to deduct interest on
the Series A Debentures. Such a change could give rise to a Tax Event,
which may permit CPL to cause a redemption of the Series A Preferred
Securities before ________, 2002. See "Certain Terms of Series A
Subordinated Debentures--Redemption" in this Prospectus Supplement and
"Description of Preferred Securities--Redemption or Exchange--Special
Event Redemption or Distribution of Corresponding Junior Subordinated
Debentures" in the accompanying Prospectus. See also "Certain Federal
Income Tax Considerations--Possible Tax Law Changes."
Rights Under the Series A Guarantee
The Series A Guarantee will be qualified as an indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). The Bank of New York will act as the indenture trustee under the
Series A Guarantee (the "Guarantee Trustee") for the purposes of
compliance with the Trust Indenture Act and will hold the Series A
Guarantee for the benefit of the holders of the Series A Preferred
Securities. The Bank of New York also will act as Debenture Trustee for
the Series A Debentures and as Property Trustee under the Trust
Agreement. The Series A Guarantee guarantees to the holders of the
Series A Preferred Securities the following payments, to the extent not
paid by CPL Capital I: (i) any accumulated and unpaid Distributions
required to be paid on the Series A Preferred Securities, to the extent
that CPL Capital I has funds on hand available therefor, (ii) the
redemption price with respect to any Series A Preferred Securities
called for redemption to the extent that CPL Capital I has funds on
hand available therefor at the date of redemption, and (iii) upon a
voluntary or involuntary termination, winding up or liquidation of CPL
Capital I (unless the Series A Debentures are distributed to holders of
the Series A Preferred Securities), the lesser of (a) the aggregate of
the liquidation preference and all accumulated and unpaid Distributions
to the date of payment to the extent CPL Capital I has funds on hand
available therefor and (b) the amount of assets of CPL Capital I
remaining available for distribution to holders of the Series A
Preferred Securities. If CPL were to default on its obligation to pay
amounts payable under the Series A Debentures, CPL Capital I would lack
funds for the payment of Distributions or amounts payable on redemption
of the Series A Preferred Securities or otherwise, and, in such event,
holders of the Series A Preferred Securities would not be able to rely
upon the Series A Guarantee for payment of such amounts. Instead,
holders of the Series A Preferred Securities would have the limited
enforcement rights described under "Description of Preferred
Securities--Events of Default; Notice" and "--Enforcement of Certain
Rights by Holders of Preferred Securities" in the accompanying
Prospectus. See "Description of Guarantees" and "Description of
Corresponding Junior Subordinated Debentures" in the accompanying
Prospectus. The Trust Agreement provides that each holder of Series A
Preferred Securities by acceptance thereof agrees to the provisions of
the Series A Guarantee and the Indenture.
Limited Voting Rights
Holders of Series A Preferred Securities will generally have
limited voting rights relating only to the modification of the Series A
Preferred Securities and the dissolution, winding-up or liquidation of
CPL Capital I. Holders of Series A Preferred Securities will not be
entitled to vote to appoint, remove or replace the Property Trustee or
the Delaware Trustee, which voting rights are vested exclusively in the
holder of the Series A Common Securities except upon the occurrence of
certain events. The Issuer Trustees and CPL may amend the Trust
Agreement without the consent of holders of Series A Preferred
Securities to ensure that CPL Capital I will be classified for United
States federal income tax purposes as a "grantor trust," even if such
action adversely affects the interests of such holders in a material
respect. See "Description of Preferred Securities--Voting Rights;
Amendment of Trust Agreement" and "--Removal of Issuer Trustees" in the
accompanying Prospectus.
Trading Characteristics of Series A Preferred Securities
CPL Capital I intends to list the Series A Preferred
Securities on the NYSE. The Series A Preferred Securities may trade at
prices that do not fully reflect the value of accrued but unpaid
interest with respect to the underlying Series A Debentures. A holder
of Series A Preferred Securities that disposes of its Series A
Preferred Securities between record dates for payments of Distributions
(and consequently does not receive a Distribution from CPL Capital I
for the period prior to such disposition) will nevertheless be required
to include as ordinary income, accrued but unpaid interest on the
Series A Debentures through the date of disposition. Such holder will
recognize a capital loss to the extent the amount realized with respect
to the Series A Preferred Securities is less than its adjusted tax
basis. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax
purposes. See "Certain Federal Income Tax Considerations--Sale or
Redemption of Series A Preferred Securities."
CPL CAPITAL I
CPL Capital I is a statutory business trust created under
Delaware law pursuant to (i) a trust agreement executed by CPL, as
Depositor, The Bank of New York, as Property Trustee, The Bank of New
York (Delaware), as Delaware Trustee, and the Administrative Trustee
named therein (which trust agreement was later amended and restated in
the form of the Trust Agreement) and (ii) the filing of a certificate
of trust with the Delaware Secretary of State on January 24, 1997. CPL
Capital I's business and affairs are conducted by the Issuer Trustees:
The Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, and two individual Administrative
Trustees who are employees or officers of or affiliated with CPL. CPL
Capital I exists for the exclusive purposes of (i) issuing and selling
the Series A Preferred Securities and Series A Common Securities, (ii)
using the proceeds from the sale of Series A Preferred Securities and
the Series A Common Securities to acquire Series A Debentures issued by
CPL and (iii) engaging in only those other activities necessary,
convenient or incidental thereto. Accordingly, the Series A Debentures
will be the sole assets of CPL Capital I, and payments under the Series
A Debentures will be the sole revenue of CPL Capital I. All of the
Series A Common Securities will be owned by CPL. The Series A Common
Securities will rank pari passu, and payments will be made thereon pro
rata, with the Series A Preferred Securities, except that upon the
occurrence and continuance of an event of default under the Trust
Agreement resulting from an Event of Default under the Indenture, the
rights of CPL as holder of the Series A Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption or
otherwise will be subordinated to the rights of the holders of the
Series A Preferred Securities. See "Description of Preferred
Securities--Subordination of Common Securities" in the accompanying
Prospectus. CPL will acquire Series A Common Securities having an
aggregate liquidation amount equal to 3% of the total capital of CPL
Capital I. CPL Capital I has a term of 45 years, but may terminate
earlier as provided in the Trust Agreement. The principal executive
office of CPL Capital I is c/o Central and South West Corporation, 1616
Woodall Rodgers Freeway, Dallas, Texas 75202, Attention: Director,
Finance, and its telephone number is (214) 777-1000. See "The Issuer
Trusts" in the accompanying Prospectus.
It is anticipated that CPL Capital I will not be subject to
the reporting requirements of the Exchange Act.
CENTRAL POWER AND LIGHT COMPANY
Central Power and Light Company, a Texas corporation ("CPL"),
is a public utility company engaged in the production, purchase,
transmission, distribution and sale of electricity in South Texas. CPL
serves approximately 614,000 retail customers in the South Texas area.
Central and South West Corporation ("CSW"), a Dallas-based registered
public utility holding company under the Public Utility Holding Company
Act of 1935, as amended (the "1935 Act"), owns all of the issued and
outstanding common stock of CPL. CPL's executive offices are located at
539 North Carancahua Street, Corpus Christi, Texas 78401-2802,
telephone number (512) 881-5300.
The foregoing information relating to CPL does not purport to
be comprehensive and should be read together with the financial
statements and other information contained in the Incorporated
Documents. See "Incorporation of Certain Documents by Reference" in the
accompanying Prospectus.
USE OF PROCEEDS
All of the proceeds from the sale of Series A Preferred
Securities will be invested by CPL Capital I in Series A Debentures.
The proceeds from the sale of such Series A Debentures will initially
become part of the general funds of CPL and will be used to replace or
retire, through redemption, repurchase or otherwise, one or more series
of outstanding preferred stock of CPL, or any combination thereof, to
repay all or a portion of CPL's short-term borrowings outstanding and
for other general corporate purposes, subject to applicable regulatory
requirements.
<PAGE>
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The following table sets forth CPL's ratios of earnings to
fixed charges and ratios of earnings to combined fixed charges and
preferred stock dividend requirements for the years and periods
indicated:
<TABLE>
Year Ended December 31,
Twelve Months
Ended
September 30, 1996 1995 1994 1993 1992 1991
------------------ ---- ---- ---- ---- ----
(unaudited)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges 2.98 2.63 3.24 2.69 3.23 3.18
Earnings to Combined Fixed Charges
and 2.56 2.36 2.82 2.31 2.77 2.65
Preferred Stock Dividend
Requirements
(unaudited)
</TABLE>
For computation of the ratios: (i) earnings consist of
operating income plus federal income taxes, deferred income taxes and
investment tax credits, other income and deductions, allowance for
funds (both borrowed and equity) used during construction and mirror
construction work in progress amortization, and (ii) fixed charges
consist of interest on long-term debt and short-term debt, and other
interest charges. Pretax earnings required for preferred stock
dividends were computed using the effective tax rate for the applicable
year.
SELECTED FINANCIAL INFORMATION
(Dollar amounts in thousands)
The selected financial data of CPL for the years ended
December 31, 1993, 1994 and 1995 and the nine-months ended September
30, 1996 set forth below were derived from and should be read in
conjunction with the financial statements and related notes of CPL
incorporated by reference in the accompanying Prospectus. The financial
statements for the three-year period ended December 31, 1995 have been
audited by Arthur Andersen LLP, independent auditors, and the reports
of Arthur Andersen LLP thereon are incorporated by reference in the
accompanying Prospectus.
<TABLE>
Nine Months Ended Year Ended December 31,
September 30, 1996 1995 1994 1993
------------------ -------------- -------------- ---------
(unaudited)
<CAPTION>
<S> <C> <C> <C> <C> <C>
Operating Revenues.............. $1,026,352 $1,073,469 $1,217,979 $1,223,528
Operating Income................ 240,949 282,184 256,251 190,079
Net Income Before Cumulative
Effect of Changes in -- -- -- 145,130
Accounting Principles...........
Cumulative Effect of Changes
in Accounting -- -- -- 27,295
Principles......................
Net Income...................... 134,029 206,447 205,439 172,425
Net Utility Plant............... 3,393,379 3,469,945 3,469,826 3,453,306
</TABLE>
<TABLE>
Capitalization at
September 30, 1996
(Unaudited)
Amount Actual % Amount as Adjusted(1) %
<CAPTION>
<S> <C> <C> <C> <C>
Long-Term Debt................................... $1,521,652 47.3% $1,521,652 46.5%
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trust Holding Solely
Parent Junior Subordinated Debentures (2)...... -- -- 149,750 4.6
Preferred Stock.................................. 250,351 7.8 157,306 4.8
Common Equity.................................... 1,446,178 44.9 $1,445,724 44.1
---------- ----- ---------- ------
Total...................................... $3,218,181 100.0% $3,274,432 100.0%
========== ====== ========== ======
Short-Term Debt.................................. $58,055 1,805
Long-Term Debt Currently Maturing................ $60,000 $60,000
</TABLE>
----------------------------
(1) Adjusted to give effect to the consummation of the offering of
6,000,000 Preferred Securities and the application of the estimated
net proceeds therefrom to redeem preferred stock and short-term
debt.
(2) As described herein, the sole assets of CPL Capital I will consist
solely of approximately $150 million of Series A Debentures, issued
by CPL to CPL Capital I, and certain rights under the Series A
Guarantee. The Series A Debentures will bear interest at the annual
rate of ___% of the principal amount thereof and will mature on
_______, 2037 which date may be shortened to a date not earlier
than ________, 2002. CPL owns all of the Series A Common Securities
of CPL Capital I.
ACCOUNTING TREATMENT
For financial reporting purposes, CPL Capital I will be
treated as a subsidiary of CPL and, accordingly, the accounts of CPL
Capital I will be included in the financial statements of CPL. The
Series A Preferred Securities will be presented as a separate line item
in the balance sheet of CPL and appropriate disclosures about the
Series A Preferred Securities, the Series A Guarantee and the Series A
Debentures will be included in the notes to the financial statements.
For financial reporting purposes, CPL will record Distributions payable
on the Series A Preferred Securities as an expense.
CERTAIN TERMS OF THE SERIES A PREFERRED SECURITIES
General
The following summary of certain terms and provisions of the
Series A Preferred Securities supplements the description of the terms
and provisions of the Preferred Securities set forth in the
accompanying Prospectus under the heading "Description of Preferred
Securities," to which description reference is hereby made. This
summary of certain terms and provisions of the Series A Preferred
Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Trust Agreement. The
form of the Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and
accompanying Prospectus is a part.
Distributions
The Series A Preferred Securities represent undivided
beneficial interests in the assets of CPL Capital I, and Distributions
on each Series A Preferred Security will be payable at the annual rate
of __% of the stated liquidation preference of $25, payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each
year. Distributions will accumulate from __________, 1997, the date of
original issuance. The first Distribution payment date for the Series A
Preferred Securities will be __________, 1997. The amount of
Distributions payable for any period will be computed on the basis of a
360-day year of twelve 30-day months and, for any period shorter than a
full calendar month, on the basis of the actual number of days elapsed
in such period. In the event that any date on which Distributions are
payable on the Series A Preferred Securities is not a Business Day,
then payment of the Distributions payable on such date will be made on
the next succeeding day that is a Business Day (and without any
additional Distributions or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar
year, payment of such Distribution shall be made on the immediately
preceding Business Day, in each such case with the same force and
effect as if made on the date such payment was originally payable.
Accrued and unpaid distributions will accumulate additional
Distributions thereon ("Additional Amounts") after the payment date
therefor in an amount equal to the additional interest accrued on
interest in arrears on the Series A Debentures. See "Certain Terms of
the Series A Debentures--General." The term "Distributions" as used
herein shall include any such Additional Amounts. See "Description of
Preferred Securities--Distributions" in the accompanying Prospectus.
So long as no Event of Default under the Indenture has
occurred and is continuing, CPL has the right under the Indenture to
defer the payment of interest on the Series A Debentures at any time or
from time to time for one or more Extension Periods, each of which,
together with all previous and further extensions of such Extension
Period prior to its termination, may not exceed 20 consecutive quarters
and may not extend beyond the maturity of the Series A Debentures. As a
consequence of any such election, quarterly Distributions on the Series
A Preferred Securities will be deferred by CPL Capital I during any
such Extension Period. Distributions to which holders of the Series A
Preferred Securities are entitled will accumulate additional
Distributions thereon at the rate of __% per annum thereof, compounded
quarterly from the relevant payment date for such Distributions. During
any such Extension Period, CPL may not, and may not permit any
subsidiary of CPL to, (i) declare, set aside or pay any dividend or
distribution on, or repurchase, redeem, or otherwise acquire or make
any sinking fund payment with respect to, any shares of CPL's capital
stock or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities (including
other Junior Subordinated Debentures) that rank pari passu with or
junior in interest to the Series A Debentures or make any guarantee
payments with respect to the foregoing (other than (a) dividends or
distributions in shares of its capital stock or in rights to acquire
shares of its capital stock, (b) conversions into or exchanges for
shares of its capital stock, (c) redemptions, purchases or other
acquisitions of shares of its capital stock made for the purpose of an
employee incentive plan or benefit plan of CPL or any of its
subsidiaries and mandatory redemptions or sinking fund payments with
respect to any series of Preferred Stock of CPL that are subject to
mandatory redemption or sinking fund requirements, provided that the
aggregate stated value of all such series outstanding at the time of
any such payment does not exceed five percent of the aggregate of (1)
the total principal amount of all bonds or other securities
representing secured indebtedness issued or assumed by CPL and then
outstanding and (2) the capital and surplus of CPL to be stated on the
books of account of CPL after giving effect to such payment, provided,
however, that any moneys deposited in any sinking fund and not in
violation of this provision may thereafter be applied to the purchase
or redemption of such Preferred Stock in accordance with the terms of
such sinking fund without regard to the restrictions contained in this
provision, and (d) payments under any guarantee by CPL with respect to
any securities of a subsidiary of CPL, provided that the proceeds from
the issuance of such securities were used to purchase Junior
Subordinated Debentures of any series under the Indenture). Upon the
termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date, CPL may elect to begin a new
Extension Period, subject to the above requirements. See "Certain Terms
of the Series A Debentures--Option to Extend Interest Payment Period"
and "Certain Federal Income Tax Considerations--Potential Extension of
Interest Payment Period and Original Issue Discount."
CPL has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Series A Debentures.
Redemption
Upon the repayment or redemption, in whole or in part, of the
Series A Debentures, whether at maturity or upon earlier redemption as
provided in the Indenture, the proceeds from such repayment or
redemption shall be applied by the Property Trustee to redeem a Like
Amount of the Series A Preferred Securities, upon not less than 30 nor
more than 60 days notice prior to the date fixed for repayment or
redemption (the "Redemption Date"), at a redemption price equal to the
aggregate liquidation preference of such Series A Preferred Securities
plus accumulated and unpaid Distributions thereon to the Redemption
Date (the "Redemption Price"). See "Description of Preferred
Securities--Redemption or Exchange" in the accompanying Prospectus and
"Certain Terms of the Series A Debentures--Redemption."
CPL will have the right to redeem the Series A Debentures (i)
on or after _______, 2002 in whole at any time or in part from time to
time, at a redemption price equal to the accrued and unpaid interest on
the Series A Debentures so redeemed to the date fixed for redemption,
plus 100% of the principal amount thereof or (ii) in whole (but not in
part), within 90 days following the occurrence of a Tax Event or an
Investment Company Event (each as defined in the accompanying
Prospectus, and as so collectively defined, a "Special Event"), at a
redemption price equal to the accrued and unpaid interest on the Series
A Debentures so redeemed to the date fixed for redemption, plus 100% of
the principal amount thereof, in each case subject to conditions
described under "Description of Junior Subordinated
Debentures--Redemption or Exchange" and "Description of Corresponding
Junior Subordinated Debentures--Optional Redemption" in the
accompanying Prospectus.
Distribution of Series A Debentures
At any time, CPL will have the right to terminate CPL Capital
I and, after satisfaction of the liabilities of creditors of CPL
Capital I as provided by applicable law, cause the Series A Debentures
to be distributed to the holders of the Series A Preferred Securities
in liquidation of CPL Capital I. See "Certain Terms of the Series A
Debentures--Distribution of Series A Debentures." If such a
distribution should occur, CPL would continue to have the right to
shorten the maturity of the Series A Debentures, subject to certain
conditions as described under "Certain Terms of the Series A Debentures
- General." Under current United States federal income tax law,
provided CPL Capital I is treated as a "grantor trust" at the time of
such distribution, such distribution should not be a taxable event to
CPL Capital I or to holders of the Series A Preferred Securities. If
there were an occurrence of a Special Event pursuant to which CPL
Capital I was determined to be an association taxable as a corporation,
however, such a distribution would be a taxable event to CPL Capital I
and to such holders. See "Certain Federal Income Tax
Considerations--Distribution of Series A Debentures to Holders of
Series A Preferred Securities." If CPL does not elect to redeem or
distribute the Series A Debentures as described above, the Series A
Preferred Securities will remain outstanding until the repayment of the
Series A Debentures.
Liquidation Value
The amount payable on the Series A Preferred Securities in the
event of any liquidation of CPL Capital I is $25 per Series A Preferred
Security plus accumulated and unpaid Distributions, which may be in the
form of a distribution of a Like Amount in Series A Debentures, subject
to certain exceptions. See "Description of Preferred
Securities--Liquidation Distribution Upon Termination" in the
accompanying Prospectus.
CERTAIN TERMS OF THE SERIES A DEBENTURES
General
The following summary of certain terms and provisions of the
Series A Debentures supplements the description of the terms and
provisions of the Corresponding Junior Subordinated Debentures set
forth in the accompanying Prospectus under the headings "Description of
Junior Subordinated Debentures" and "Description of Corresponding
Junior Subordinated Debentures," to which description reference is
hereby made. The summary of certain terms and provisions of the Series
A Debentures set forth below does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the
Indenture. The Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and
accompanying Prospectus is a part.
Concurrently with the issuance of the Series A Preferred
Securities, CPL Capital I will invest the proceeds thereof and the
consideration paid by CPL for the Series A Common Securities in the
Series A Debentures issued by CPL. The Series A Debentures will bear
interest at the annual rate of __% of the principal amount thereof,
payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year (each, an "Interest Payment Date"), commencing
_______, 1997, to the person in whose name each Series A Debenture is
registered, subject to certain exceptions, at the close of business on
the fifteenth day of the month immediately preceding the Interest
Payment Date.
It is anticipated that, until the liquidation, if any, of CPL
Capital I, each Series A Debenture will be held in the name of the
Property Trustee in trust for the benefit of the holders of the Series
A Preferred Securities. The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months
and, for any period shorter than a full calendar month, on the basis of
the actual number of days elapsed in such period. In the event that any
date on which interest is payable on the Series A Debentures is not a
Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day is in the next succeeding calendar year, payment of
such Distribution shall be made on the immediately preceding Business
Day, in each such case with the same force and effect as if made on the
date such payment was originally payable. Accrued interest that is not
paid on the applicable Interest Payment Date will bear additional
interest on the amount thereof (to the extent permitted by law) at the
rate per annum of __% thereof, compounded quarterly. The term
"interest" as used herein shall include quarterly interest payments,
interest on quarterly interest payments not paid on the applicable
Interest Payment Date and Additional Sums (as defined below), as
applicable.
The Series A Debentures will be issued as a series of Junior
Subordinated Debentures under the Indenture. The Series A Debentures
will mature on _____, 2037, which date may be shortened at any time and
from time to time at the election of CPL, but in no event to a date
earlier than _______, 2002 (such date, as it may be shortened, the
"Maturity Date"), provided, however, that, if CPL exercises its right
to liquidate CPL Capital I and distribute the Series A Debentures to
holders in exchange for the Series A Preferred Securities, effective
upon such exercise the Maturity Date of the Series A Debentures may be
changed to any date elected by CPL that is (i) no earlier than the date
five years after the initial issuance of the Series A Preferred
Securities and (ii) no later than ______, 2037. The Series A Debentures
will be unsecured and will rank junior and be subordinate in right of
payment to all Senior Indebtedness of CPL. In addition, the Series A
Debentures will be effectively subordinated to all existing and future
liabilities of CPL's subsidiaries, and holders of Series A Debentures
should look only to the assets of CPL for payments on the Series A
Debentures. CPL currently has no subsidiaries. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of
CPL, whether under the Indenture, any other existing or other indenture
that CPL may enter into in the future or otherwise. See "Description of
Junior Subordinated Debentures--Subordination" in the accompanying
Prospectus.
Option to Extend Interest Payment Period
So long as no Event of Default under the Indenture has
occurred and is continuing, CPL has the right under the Indenture at
any time during the term of the Series A Debentures to defer the
payment of interest at any time or from time to time for one or more
Extension Periods, each of which, together with all previous and
further extensions of such Extension Period prior to its termination,
may not exceed 20 consecutive quarters and may not extend beyond the
maturity of the Series A Debentures. At the end of such Extension
Period, CPL must pay all interest then accrued and unpaid (together
with interest thereon at the annual rate of __%, compounded quarterly,
to the extent permitted by applicable law). During an Extension Period,
interest will continue to accrue and holders of Series A Debentures (or
holders of Series A Preferred Securities while such series is
outstanding) will be required to accrue interest income (as original
issue discount) on an economic accrual basis for United States federal
income tax purposes. See "Certain Federal Income Tax
Considerations--Potential Extension of Interest Payment Period and
Original Issue Discount."
During any such Extension Period, CPL may not, and may not
permit any subsidiary of CPL to, (i) declare, set aside or pay any
dividend or distribution on, or repurchase, redeem, or otherwise
acquire or make any sinking fund payment with respect to, any shares of
CPL's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including other Junior Subordinated Debentures) that rank pari passu
with or junior in interest to the Series A Debentures or make any
guarantee payments with respect to the foregoing (other than (a)
dividends or distributions in shares of its capital stock or in rights
to acquire shares of its capital stock, (b) conversions into or
exchanges for shares of its capital stock, (c) redemptions, purchases
or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of CPL or any of
its subsidiaries and mandatory redemptions or sinking fund payments
with respect to any series of Preferred Stock of CPL that are subject
to mandatory redemption or sinking fund requirements, provided that the
aggregate stated value of all such series outstanding at the time of
any such payment does not exceed five percent of the aggregate of (1)
the total principal amount of all bonds or other securities
representing secured indebtedness issued or assumed by CPL and then
outstanding and (2) the capital and surplus of CPL to be stated on the
books of account of CPL after giving effect to such payment, provided,
however, that any moneys deposited in any sinking fund and not in
violation of this provision may thereafter be applied to the purchase
or redemption of such Preferred Stock in accordance with the terms of
such sinking fund without regard to the restrictions contained in this
provision, and (d) payments under any guarantee by CPL with respect to
any securities of a subsidiary of CPL, provided that the proceeds from
the issuance of such securities were used to purchase Junior
Subordinated Debentures of any series under the Indenture). Upon the
termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date, CPL may elect to begin a new
Extension Period, subject to the above requirements. No interest shall
be due and payable during an Extension Period, except at the end
thereof. CPL must give the Administrative Trustees and the Debenture
Trustee notice of its election of such Extension Period at least one
Business Day prior to the earlier of (i) the date the Distributions on
the Series A Preferred Securities would have been payable except for
the election to begin such Extension Period and (ii) the date the
Administrative Trustees are required to give notice to the NYSE or
other applicable self-regulatory organization or to holders of such
Series A Preferred Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business
Day prior to such record date. The Administrative Trustees shall give
notice of CPL's election to begin a new Extension Period to the holders
of the Series A Preferred Securities within five Business Days of the
receipt of notice thereof. See "Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date" in the accompanying
Prospectus.
Additional Sums
If CPL Capital I is required to pay any additional taxes,
duties or other governmental charges as a result of a Tax Event, CPL
will pay as additional amounts on the Series A Debentures such amounts
("Additional Sums") as shall be required so that the Distributions
payable by CPL Capital I shall not be reduced as a result of any such
additional taxes, duties or other governmental charges, subject to the
conditions described under "Description of Preferred
Securities--Redemption or Exchange--Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus.
Redemption
The Series A Debentures are redeemable prior to maturity at
the option of CPL (i) on or after _______, 2002, in whole at any time
or in part from time to time, at a redemption price equal to the
accrued and unpaid interest on the Series A Debentures so redeemed to
the date fixed for redemption plus 100% of the principal amount thereof
or (ii) in whole (but not in part), within 90 days of the occurrence of
a Special Event, at a redemption price equal to the accrued and unpaid
interest on the Series A Debentures so redeemed to the date fixed for
redemption, plus 100% of the principal amount thereof, in each case
subject to the further conditions described under "Description of
Junior Subordinated Debentures--Redemption" and "Description of
Corresponding Junior Subordinated Debentures--Optional Redemption" in
the accompanying Prospectus.
Distribution of Series A Debentures
Under certain circumstances involving the termination of CPL
Capital I, Series A Debentures may be distributed to the holders of the
Series A Preferred Securities in liquidation of CPL Capital I after
satisfaction of liabilities to creditors of CPL Capital I as provided
by applicable law. If distributed to holders of Series A Preferred
Securities in liquidation, the Series A Debentures will initially be
issued in the form of one or more global securities and DTC, or any
successor depositary for the Series A Preferred Securities, will act as
depositary for the Series A Debentures. It is anticipated that the
depositary arrangements for the Series A Debentures would be
substantially identical to those in effect for the Series A Preferred
Securities. If the Series A Debentures are distributed to the holders
of Series A Preferred Securities upon the liquidation of CPL Capital I,
CPL will use its best efforts to list the Series A Debentures on the
NYSE or such other stock exchanges or other organizations, if any, on
which the Series A Preferred Securities are then listed. There can be
no assurance as to the market price of any Series A Debentures that may
be distributed to the holders of Series A Preferred Securities. For a
description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemption and other
notices and other matters, see "Description of Preferred
Securities--Book-entry Issuance" in the accompanying Prospectus.
Registration of Series A Debentures
A global security shall be exchangeable for Series A
Debentures registered in the names of persons other than DTC or its
nominee only if (i) DTC notifies CPL that it is unwilling or unable to
continue as a depositary for such global security and no successor
depositary shall have been appointed, or if at any time DTC ceases to
be a clearing agency registered under the Exchange Act, at a time when
DTC is required to be so registered to act as such depositary, (ii) CPL
in its sole discretion determines that such global security shall be so
exchangeable or (iii) the global security was issued pursuant to a
liquidation of CPL Capital I as provided in the Trust Agreement and
there shall have occurred and be continuing a Debenture Event of
Default with respect to such global security and the holders of at
least a majority of the beneficial interests in such global security
advise the Property Trustee in writing that the continuation of a
book-entry system through DTC is no longer in their best interest. Any
global security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for definitive certificates registered in such
names as DTC shall direct. It is expected that such instructions will
be based upon directions received by DTC from its Participants with
respect to ownership of beneficial interests in such global security.
In the event that Series A Debentures are issued in definitive form,
such Series A Debentures will be in denominations of $25 and integral
multiples thereof and may be transferred or exchanged at the offices
described below.
Payments on Series A Debentures represented by a global
security will be made to DTC, as the depositary for the Series A
Debentures. In the event Series A Debentures are issued in definitive
form, principal and interest will be payable, the transfer of the
Series A Debentures will be registrable, and Series A Debentures will
be exchangeable for Series A Debentures of other denominations of a
like aggregate principal amount, at the corporate office of the
Debenture Trustee in New York, New York, or at the offices of any
paying agent or transfer agent appointed by CPL, provided that payment
of interest may be made at the option of CPL by check mailed to the
address of the persons entitled thereto or by wire transfer as provided
under "Description of Junior Subordinated Debentures--Payment and
Paying Agents" in the accompanying Prospectus. In addition, if the
Series A Debentures are issued in certificated form, the record dates
for payment of interest will be the 15th day of the month in which the
relevant Interest Payment Date occurs. For a description of DTC and the
terms of the depositary arrangements relating to payments, transfers,
voting rights, redemptions and other notices and other matters, see
"Description of Preferred Securities--Book-entry Issuance" in the
accompanying Prospectus.
ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee
benefit plan subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA")(a "Plan"), should consider the fiduciary
standards of ERISA in the context of the Plan's particular
circumstances before authorizing an investment in the Series A
Preferred Securities. Accordingly, among other factors, the fiduciary
should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA and would be consistent with the
documents and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code") prohibit Plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975
of the Code (also "Plans"), from engaging in certain transactions
involving "plan assets" with persons who are "parties in interest"
under ERISA or "disqualified persons" under the Code ("Parties in
Interest") with respect to such Plan. A violation of these "prohibited
transaction" rules may result in an excise tax or other liabilities
under ERISA and/or Section 4975 of the Code for such persons, unless
exemptive relief is available under an applicable statutory or
administrative exemption. Employee benefit plans that are governmental
plans (as defined in Section 3(32) of ERISA), certain church plans (as
defined in Section 3(33) of ERISA) and foreign plans (as described in
Section 4(b)(5) of ERISA) are not subject to the requirements of ERISA
or Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by
the U.S. Department of Labor (the "DOL"), the assets of CPL Capital I
would be deemed to be "plan assets" of a Plan for purposes of ERISA and
Section 4975 of the Code if "plan assets" of the Plan were used to
acquire an equity interest in CPL Capital I and no exception were
applicable under the Plan Assets Regulation. An "equity interest" is
defined under the Plan Assets Regulation as any interest in an entity
other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets
Regulation, the assets of CPL Capital I would not be deemed to be "plan
assets" of investing Plans if, immediately after the most recent
acquisition of any equity interest in CPL Capital I, less that 25% of
the value of each class of equity interests in CPL Capital I were held
by Plans, other employee benefit plans not subject to ERISA or Section
4975 of the Code (such as governmental, church and foreign plans), and
entities holding assets deemed to be "plan assets" of any Plan
(collectively, "Benefit Plan Investors"), or if the Series A Preferred
Securities were "publicly-offered securities" for purposes of the Plan
Assets Regulation. No assurance can be given that the value of the
Series A Preferred Securities held by Benefit Plan Investors will be
less than 25% of the total value of such Series A Preferred Securities
at the completion of the initial offering or thereafter, and no
monitoring or other measures will be taken with respect to the
satisfaction of the conditions to this exception. In addition, no
assurance can be given that the Series A Preferred Securities would be
considered to be "publicly-offered securities" under the Plan Assets
Regulation. All of the Series A Common Securities will be purchased and
initially held by CPL.
Certain transactions involving CPL Capital I could be deemed
to constitute direct or indirect prohibited transactions under ERISA
and Section 4975 of the Code with respect to a Plan if the Series A
Preferred Securities were acquired with "plan assets" of such Plan and
the assets of CPL Capital I were deemed to be "plan assets" of Plans
investing in CPL Capital I. For example, if CPL is a Party in Interest
with respect to an investing Plan, extensions of credit between CPL
Capital I and CPL (as represented by the Series A Debentures and the
Guarantee) would likely be prohibited by Section 406(a)(1)(B) of ERISA
and Section 4975(c)(1)(B) of the Code, unless exemptive relief were
available under an applicable administrative exemption (see below). In
addition, if CPL were considered to be a fiduciary with respect to CPL
Capital I as a result of certain powers it holds (such as the powers to
remove and replace the Property Trustee and the Administrative
Trustees), certain operations of CPL Capital I, including the optional
redemption or acceleration of the Series A Debentures, could be
considered to be prohibited transactions under Section 406(b) of ERISA
and Section 4975(c)(1)(E) of the Code. In order to avoid such potential
prohibited transactions, each investing plan, by purchasing the Series
A Preferred Securities, will be deemed to have directed CPL Capital I
to invest in the Series A Debentures and to have appointed the Property
Trustee.
The DOL has issued five prohibited transaction class
exemptions ("PTCEs") that may provide exemptive relief if required for
direct or indirect prohibited transactions that may arise from the
purchase or holding of the Series A Preferred Securities if assets of
CPL Capital I were deemed to be "plan assets" of Plans investing in CPL
Capital I as described above. Those class exemptions are PTCE 96-23
(for certain transactions determined by in-house asset managers), PTCE
95-60 (for certain transactions involving insurance company general
accounts), PTCE 91-38 (for certain transactions involving bank
collective investment funds), PTCE 90-1 (for certain transactions
involving insurance company pooled separate accounts), and PTCE 84-14
(for certain transactions determined by independent qualified asset
managers).
Because the Series A Preferred Securities may be deemed to be
equity interests in CPL Capital I for purposes of applying ERISA and
Section 4975 of the Code, the Series A Preferred Securities may not be
purchased or held by any Plan, any entity whose underlying assets
include "plan assets" by reason of any Plan's investment in the entity
or any person investing "plan assets" of any Plan (each a "Plan Asset
Entity"), unless such purchaser or holder is eligible for the exemptive
relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another applicable exemption. Any purchaser or holder of the Series A
Preferred Securities or any interest therein will be deemed to have
represented by its purchase and holding thereof that it either (a) is
not a Plan or an Asset Entity or (b) is eligible for the exemptive
relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another applicable exemption with respect to such purchase or holding.
If a purchaser or holder of the Series A Preferred Securities that is a
Plan or a Plan Asset Entity elects to rely on an exemption other than
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, CPL and CPL Capital I may
require a satisfactory opinion of counsel or other evidence with
respect to the availability of such exemption for such purchase and
holding.
Due to the complexity of these rules and the penalties that
may be imposed upon persons involved in nonexempt prohibited
transactions, it is particularly important that fiduciaries or other
persons considering purchasing the Series A Preferred Securities on
behalf of or with "plan assets" of any Plan consult with their counsel
regarding the potential consequences if the assets of CPL Capital I
were deemed to be "plan assets" and the availability of exemptive
relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or any other
applicable exemption.
Government plans, as defined in Section 3(32) of ERISA, are
not subject to ERISA, and are also not subject to the prohibited
transaction requirements similar to those under ERISA and the Code
discussed above. Accordingly, fiduciaries of governmental plans, in
consultation with their advisors, should consider the impact of their
respective state pension codes on investments in the Series A Preferred
Securities and the considerations discussed above, to the extent
applicable.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain United States
federal income tax consequences of the purchase, ownership and
disposition of Series A Preferred Securities. This summary only
addresses the tax consequences to a person acquiring Series A Preferred
Securities on their original issue at their original offering price and
that is a "United States Person" within the meaning of the Code, which
includes (i) an individual citizen or resident of the United States,
(ii) a corporation or partnership organized in or under the laws of the
United States or any state thereof or the District of Columbia or (iii)
an estate or trust specified as being a United States Person in the
Code. This summary does not address all tax consequences that may be
applicable to a United States Person that is a beneficial owner of the
Series A Preferred Securities, nor does it address the tax consequences
to (i) persons that are not United States Persons, (ii) persons subject
to special treatment under United States federal income tax law, such
as banks, insurance companies, thrift institutions, regulated
investment companies, real estate investment trusts, tax-exempt
organizations and dealers in securities or currencies, (iii) persons
that will hold Preferred Securities as part of a position in a
"straddle" or as part of a "hedging," "conversion" or other integrated
investment transaction for United States federal income tax purposes,
(iv) persons whose "functional currency" is not the United States
dollar or (v) persons that do not hold the Series A Preferred
Securities as capital assets.
The statements of law or legal conclusion set forth in this
summary constitute the opinion of Christy & Viener, special tax counsel
to CPL and CPL Capital I. This summary is based upon the Code, Treasury
Regulations, Internal Revenue Service rulings and pronouncements and
judicial decisions now in effect, all of which are subject to change at
any time. Such changes may be applied retroactively in a manner that
could cause the tax consequences to vary substantially from the
consequences described below, possibly adversely affecting a beneficial
owner of a Series A Preferred Security. In particular, legislation has
been proposed that could adversely affect CPL's ability to deduct
interest on the Series A Debentures, which would in turn permit CPL to
cause a redemption of the Series A Preferred Securities. See
"--Possible Tax Law Changes." The authorities on which this summary is
based are subject to various interpretations and it is therefore
possible that the United States federal income tax treatment of the
Series A Preferred Securities may differ from the treatment described
below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN
TAX ADVISORS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE
UNITED STATES FEDERAL TAX CONSEQUENCES OF PURCHASE, OWNERSHIP AND
DISPOSITION OF SERIES A PREFERRED SECURITIES, AS WELL AS THE EFFECT OF
ANY STATE, LOCAL OR FOREIGN TAX LAWS.
Classification of CPL Capital I
In connection with the issuance of the Series A Preferred
Securities, Christy & Viener will render its opinion to the effect
that, under then current law and assuming compliance with the terms of
the Trust Agreement and certain other documents, and based on certain
facts and assumptions contained in such opinion, CPL Capital I will be
classified as a "grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes. As a result,
each beneficial owner of a Series A Preferred Security (a
"Securityholder") will be treated as owning an undivided beneficial
interest in the Series A Debentures.
Classification of the Series A Debentures
Based on the advice of its counsel, CPL believes and intends
to take the position that the Series A Debentures will constitute
indebtedness for United States federal income tax purposes. No
assurance can be given that such position will not be challenged by the
Internal Revenue Service or, if challenged, that such challenge will
not be successful. By purchasing and accepting Series A Preferred
Securities, each Securityholder agrees to treat the Series A Debentures
as indebtedness and the Series A Preferred Securities as evidence of an
indirect beneficial ownership in the Series A Debentures. The remainder
of this discussion assumes that the Series A Debentures will be
classified as indebtedness of CPL for United States federal income tax
purposes.
Income from Series A Preferred Securities
Each Securityholder will be required to include in gross
income its pro rata share of the interest income paid or accrued with
respect to the Series A Debentures. Such income inclusion will be in
accordance with the Securityholder's regular method of accounting
except as set forth below under "--Potential Extension of Interest
Payment Period and Original Issue Discount." Because income on the
Series A Preferred Securities will constitute interest (or original
issue discount), no amount included in income with respect to the
Series A Preferred Securities will be eligible for the
dividends-received deduction.
Potential Extension of Interest Payment Period and Original Issue Discount
Under recently issued Treasury regulations (the
"Regulations"), a contingency that stated interest will not be timely
paid that is "remote" because of the terms of the relevant debt
instrument will be ignored in determining whether such debt instrument
is issued with original issue discount ("OID"). As a result of terms
and conditions of the Series A Debentures that prohibit certain
payments with respect to CPL's capital stock and indebtedness if CPL
elects to extend interest payment periods (see "Certain Terms of the
Series A Debentures--Option to Extend Interest Payment Period"), CPL
believes that the likelihood of its exercising its option to defer
payments is remote. Based on the foregoing, CPL believes that the
Series A Debentures will not be considered to be issued with OID at the
time of their original issuance and, accordingly, a Securityholder
should include in gross income such holder's allocable share of
interest on the Series A Debentures in accordance with such holder's
regular method of tax accounting.
Under the Regulations, if CPL exercises its option to defer
any payment of interest, the Series A Debentures would at that time be
treated as issued with OID, and all stated interest on the Series A
Debentures would thereafter be treated as OID for so long as the Series
A Debentures remained outstanding. In such event, all of a
Securityholder's taxable interest income with respect to the Series A
Debentures would be accounted for as OID on an economic-accrual basis
regardless of such holder's method of tax accounting, and actual
distributions of stated interest would not be reported as taxable
income. Consequently, a Securityholder would be required to include OID
in gross income even though CPL would not make any actual cash payments
during an Extension Period.
The Regulations have not been addressed in any rulings or
other interpretations by the Internal Revenue Service (the "IRS"), and
it is possible that the IRS could take a position contrary to the
interpretation herein.
Distribution of Series A Debentures to Holders of Series A Preferred Securities
As described under the caption "Certain Terms of the Series A
Preferred Securities--Distribution of Series A Debentures," CPL will
have the right, at any time, to liquidate CPL Capital I and cause the
Series A Debentures to be distributed to the holders of the Series A
Preferred Securities. Under current United States federal income tax
law, provided CPL Capital I is treated as a "grantor trust" at the time
of such distribution, such distribution would not be a taxable event to
Securityholders. Such a distribution would result in a Securityholder
receiving directly such Securityholder's pro rata share of the Series A
Debentures previously held indirectly through CPL Capital I, with a
holding period and aggregate tax basis equal to the holding period and
aggregate tax basis such Securityholder had in such Securityholder's
Series A Preferred Securities before such distribution.
If, however, CPL Capital I were subject to United States
federal income tax as a corporation with respect to income accrued or
received on the Series A Debentures at the time of liquidation, the
distribution of Series A Debentures to Securityholders by CPL Capital I
would be a taxable event to CPL Capital I and each Securityholder, and
each Securityholder would recognize gain or loss as if the
Securityholder had exchanged its Series A Preferred Securities for the
Series A Debentures it received upon the liquidation of CPL Capital I.
A Securityholder would accrue interest in respect of Series A
Debentures received from CPL Capital I in the manner described above
under "--Income from Series A Preferred Securities" and "--Potential
Extension of Interest Payment Period and Original Issue Discount."
Sale or Redemption of Series A Preferred Securities
A Securityholder that sells (including a redemption for cash)
Series A Preferred Securities will recognize gain or loss equal to the
difference between its adjusted tax basis in the Series A Preferred
Securities and the amount of consideration paid for such Series A
Preferred Securities (excluding the portion that represents accrued and
unpaid interest that has not yet been included in income, which portion
will constitute ordinary income). Assuming that CPL does not exercise
its option to defer payment of interest on the Series A Debentures and
the Series A Debentures are not considered issued with OID, a
Securityholder's adjusted tax basis in the Series A Preferred
Securities generally will be its initial purchase price. If CPL does
exercise its option to defer payment of interest or the Series A
Debentures are otherwise deemed to have been issued with OID, a
Securityholder's adjusted tax basis in the Series A Preferred
Securities generally will be its initial purchase price, increased by
OID previously includible in such Securityholder's gross income to the
date of disposition and decreased by Distributions or other payments
received on the Series A Preferred Securities in respect of OID. Gain
or loss on the sale of the Series A Preferred Securities generally will
be a capital gain or loss and generally will be a long-term capital
gain or loss if the Series A Preferred Securities have been held for
more than one year.
The Series A Preferred Securities may trade at a price that
does not fully reflect the value of accrued but unpaid interest with
respect to the underlying Series A Debentures. A Securityholder that
disposes of such Securityholder's Series A Preferred Securities between
record dates for payments of Distributions (and consequently does not
receive a Distribution from CPL Capital I for the period prior to such
disposition) will nevertheless be required to include as ordinary
income accrued but unpaid interest on the Series A Debentures through
the date of disposition. Such Securityholder will recognize a capital
loss on the disposition of Series A Preferred Securities to the extent
the amount realized with respect to the Series A Preferred Securities
is less than the Securityholder's adjusted tax basis in the Series A
Preferred Securities. Subject to certain limited exceptions, capital
losses cannot be applied to offset ordinary income for United States
federal income tax purposes.
Backup Withholding Tax and Information Reporting
The amount of interest income paid and OID accrued on the
Series A Preferred Securities will be reported to Securityholders and
to the Internal Revenue Service except in the case of corporations and
other exempt Securityholders. "Backup" withholding at a rate of 31%
will apply to payments of interest to non-exempt Securityholders unless
the Securityholder furnishes its taxpayer identification number in the
manner prescribed in applicable Treasury Regulations, certifies that
such number is correct and meets certain other conditions.
Payment of proceeds from disposition of Series A Preferred
Securities to or through the United States office of a broker is
subject to information reporting and backup withholding unless the
Securityholder establishes an exemption from information reporting and
backup withholding.
Any amounts withheld from a Securityholder under the backup
withholding rules will be allowed as a refund or a credit against such
Securityholder's United States federal income tax liability, provided
the required information is furnished to the IRS.
Possible Tax Law Changes
On March 19, 1996, the Revenue Reconciliation Bill, the
revenue portion of President Clinton's budget proposal, was introduced
in the 104th Congress. If enacted, the Revenue Reconciliation Bill
generally would have treated as equity, for federal income tax
purposes, an instrument issued by a corporation that has a maximum term
of more than 20 years and that is not shown as indebtedness on the
separate balance sheet of the issuer or, where the instrument is issued
to a related party (other than a corporation), where the holder or some
other related party issues a related instrument that is not shown as
indebtedness on the issuer's consolidated balance sheet. The
above-described provision of the Revenue Reconciliation Bill was
proposed to be effective generally for instruments issued on or after
December 7, 1995. If the proposed provision were applied to the Series
A Debentures, CPL would be unable to deduct interest on the Series A
Debentures. However, on March 29, 1996, the Chairmen of the Senate
Finance and House Ways and Means Committees issued a joint statement to
the effect that it was their intention that the effective date of the
President's legislative proposals, if adopted, would be no earlier than
the date of appropriate Congressional action. Under current law, CPL
believes and intends to take the position that it is able to deduct
interest on the Series A Debentures. Although the 104th Congress
adjourned without enacting the above-described provision of the Revenue
Reconciliation Bill, there can be no assurance that current or future
legislative proposals or final legislation will not affect the ability
of CPL to deduct interest on the Series A Debentures. Such a change
could give rise to a Tax Event, which may permit CPL to cause a
redemption of the Series A Preferred Securities as described more fully
under "Description of Preferred Securities--Redemption or
Exchange--Special Event Redemption or Distribution of Corresponding
Junior Subordinated Debentures" in the accompanying Prospectus.
UNDERWRITING
Subject to the terms and conditions of the Underwriting
Agreement, CPL and CPL Capital I have agreed that CPL Capital I will
sell to each of the Underwriters named below, and each of such
Underwriters, for whom Goldman, Sachs & Co., Lehman Brothers Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Smith Barney
Inc. are acting as representatives (the "Representatives"), has
severally agreed to purchase from CPL Capital I the respective number
of Series A Preferred Securities set forth opposite its name below:
Number of
Series A
Preferred
Underwriter Securities
Goldman, Sachs & Co.................................. _________
Lehman Brothers Inc..................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................
Smith Barney Inc. ................................... _________
Total......................................... 6,000,000
Subject to the terms and conditions set forth in the
Underwriting Agreement, the Underwriters are committed to take and pay
for all such Series A Preferred Securities offered hereby, if any are
taken.
The Underwriters propose to offer the Series A Preferred
Securities in part directly to the public at the initial public
offering price set forth on the cover page of this Prospectus
Supplement and in part to certain securities dealers at such price less
a concession of $____ per Series A Preferred Security. The Underwriters
may allow, and such dealers may reallow, a concession not in excess of
$____ per Series A Preferred Security to certain brokers and dealers.
After the Series A Preferred Securities are released for sale to the
public, the offering price and other selling terms may from time to
time be varied by the Representatives.
In view of the fact that the proceeds from the sale of the
Series A Preferred Securities will be used to purchase the Series A
Debentures issued by CPL, the Underwriting Agreement provides that CPL
will pay as Underwriters' Compensation for the Underwriters arranging
the investment therein of such proceeds an amount of $____ per Series A
Preferred Security ($____ per Series A Preferred Security sold to
certain institutions) for the accounts of the several Underwriters.
CPL and CPL Capital I have agreed that, during the period
beginning from the date of the Underwriting Agreement and continuing to
and including the earlier of (i) the termination of trading
restrictions on the Series A Preferred Securities, as determined by the
Underwriters, and (ii) 30 days after the closing date, they will not
offer, sell, contract to sell or otherwise dispose of any Preferred
Securities, any other beneficial interests in the assets of CPL Capital
I, or any preferred securities or any other securities of CPL Capital I
or CPL which are substantially similar to the Series A Preferred
Securities, including any guarantee of such securities, or any
securities convertible into or exchangeable for or that represent the
right to receive securities, preferred securities or any such
substantially similar securities of either CPL Capital I or CPL,
without the prior written consent of the Representatives, except for
the Series A Preferred Securities and the Series A Guarantee offered in
connection with the offering.
Prior to this offering, there has been no public market for
the Series A Preferred Securities. The Series A Preferred Securities
will be listed on the NYSE under the symbol "______". Trading of the
Series A Preferred Securities on the NYSE is expected to commence
within thirty days after the initial delivery of the Series A Preferred
Securities. In order to meet one of the requirements for listing the
Series A Preferred Securities on the NYSE, the Underwriters will
undertake to sell lots of 100 or more Series A Preferred Securities to
a minimum of 400 beneficial holders. Trading of the Series A Preferred
Securities on the NYSE is expected to commence within a seven-day
period after the initial delivery of the Series A Preferred Securities.
The Representatives have advised CPL that they intend to make a market
in the Series A Preferred Securities prior to commencement of trading
on the NYSE, but are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Series A Preferred Securities.
CPL and CPL Capital I have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended, or to contribute to payments
the Underwriters may be required to make in respect thereof.
Certain of the Underwriters or their affiliates have provided
from time to time, and expect to provide in the future, investment or
commercial banking services to CPL and its affiliates, for which such
Underwriters or their affiliates have received or will receive
customary fees and commissions.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of
the Series A Preferred Securities, the enforceability of the Trust
Agreement and the creation of CPL Capital I will be passed upon by
Richards, Layton & Finger, special Delaware counsel to CPL and CPL
Capital I. The validity of the Series A Guarantee and the Series A
Debentures will be passed upon for CPL by Milbank, Tweed, Hadley &
McCloy, New York, New York, and for the Underwriters by Sidley &
Austin, Chicago, Illinois. Sidley & Austin has from time to time
represented CSW and certain of its affiliates, including CPL, in
connection with certain matters. All matters of Texas law will be
passed upon by Vinson & Elkins L.L.P., Dallas, Texas. Certain matters
relating to United States federal income tax considerations will be
passed upon by Christy & Viener, New York, New York, special tax
counsel to CPL and CPL Capital I.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
jurisdiction.
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SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1997
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$150,000,000
CENTRAL POWER AND LIGHT COMPANY CPL CAPITAL I
CPL CAPITAL II
Junior Subordinated Debentures Preferred Securities
guaranteed, as described herein, by
CENTRAL POWER AND LIGHT COMPANY
Central Power and Light Company, a Texas corporation ("CPL"), may from
time to time offer in one or more series or issuances its junior subordinated
deferrable interest debentures (the "Junior Subordinated Debentures"). The
Junior Subordinated Debentures will be unsecured and subordinate and junior in
right of payment to Senior Indebtedness (as defined herein) of CPL. See
"Description of the Junior Subordinated Debentures--Subordination." If provided
in a related prospectus supplement accompanying this Prospectus (the "Prospectus
Supplement"), CPL will have the right to defer payments of interest on any
series of Junior Subordinated Debentures at any time or from time to time for
such number of consecutive interest payment periods (which shall not extend
beyond the maturity of the Junior Subordinated Debentures) with respect to each
deferral period as may be specified in the Prospectus Supplement (each, an
"Extension Period"). See "Description of Junior Subordinated Debentures--Option
to Extend Interest Payments" and "--Certain Covenants of CPL."
CPL Capital I and CPL Capital II, each a statutory business trust
created under the laws of the State of Delaware (each, an "Issuer Trust," and
collectively, the "Issuer Trusts"), may severally offer, from time to time,
their respective preferred securities (the "Preferred Securities") representing
preferred undivided beneficial interests in the assets of each Issuer Trust. CPL
will be the owner of the common securities (the "Common Securities")
representing common undivided beneficial interests in the assets of each Issuer
Trust. The payment of periodic cash distributions ("Distributions") with respect
to Preferred Securities of each Issuer Trust, and payments on liquidation or
redemption with respect to such Preferred Securities are each guaranteed by CPL
as described herein (each, a "Guarantee," and collectively, the "Guarantees").
See "Description of Guarantees." CPL's obligations under each Guarantee will be
subordinate and junior in right of payment to all Senior Indebtedness of CPL.
Concurrently with the issuance by an Issuer Trust of its Preferred Securities,
such Issuer Trust will invest the proceeds thereof and any contributions made by
CPL
(Continued on next page)
-----------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------------------------------------
The date of this Prospectus is , 1997
<PAGE>
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- iii -
(Continued from previous page)
in respect of CPL's purchase of the Common Securities in a corresponding series
of Junior Subordinated Debentures (the "Corresponding Junior Subordinated
Debentures") with terms corresponding to the terms of such Issuer Trust's
Preferred Securities. The Corresponding Junior Subordinated Debentures will be
the sole assets of each Issuer Trust, and payments under the Corresponding
Junior Subordinated Debentures and the related Expense Agreement (as defined
herein) will be the only revenue of each Issuer Trust. CPL may redeem the
Corresponding Junior Subordinated Debentures (and cause the redemption of the
related Preferred Securities) or may terminate each Issuer Trust at any time and
cause the Corresponding Junior Subordinated Debentures to be distributed to the
holders of Preferred Securities in liquidation of their interests in such Issuer
Trust. See "Description of Preferred Securities--Liquidation Distribution Upon
Termination."
Holders of the Preferred Securities will be entitled to receive
preferential cumulative cash Distributions accumulating from the date of
original issuance and payable periodically as specified in the related
Prospectus Supplement. If provided in the related Prospectus Supplement, CPL
will have the right to defer payments of interest on any series of Junior
Subordinated Debentures at any time or from time to time for one or more
Extension Periods (which shall not extend beyond the maturity of such Junior
Subordinated Debentures). If Corresponding Junior Subordinated Debentures are
issued and interest payments on such Corresponding Junior Subordinated
Debentures are so deferred, Distributions on the related series of Preferred
Securities will also be deferred and CPL will not be permitted, subject to
certain exceptions set forth herein, to declare, set aside or pay any cash
distributions with respect to CPL's capital stock or debt securities that rank
pari passu with or junior to the Corresponding Junior Subordinated Debentures.
During an Extension Period, interest on the Corresponding Junior Subordinated
Debentures will continue to accrue (and the amount of Distributions to which
holders of Preferred Securities are entitled will accumulate) at the rate per
annum set forth in the related Prospectus Supplement. See "Description of Junior
Subordinated Debentures--Option to Extend Interest Payment Date" and "--Certain
Covenants of CPL" and "Description of Preferred Securities--Distributions."
The Junior Subordinated Debentures and the Preferred Securities (the
"Offered Securities") may be offered in amounts, at prices and on terms to be
determined at the time of offering, provided that the aggregate initial public
offering price of all Junior Subordinated Debentures (other than Corresponding
Junior Subordinated Debentures) and Preferred Securities shall not exceed
$150,000,000. Certain specific terms of the Offered Securities will be described
in the Prospectus Supplement, including, without limitation and where applicable
and to the extent not set forth herein: (i) in the case of Junior Subordinated
Debentures, the specific designation, aggregate principal amount, denominations,
maturity (including any provision for shortening thereof), interest payment
dates, interest rate (which may be fixed or variable) or method of calculating
interest, if any, applicable Extension Period or interest deferral terms, if
any, place or places where principal, premium, if any, and interest, if any,
will be payable, terms of redemption, if any, sinking fund provisions, if any,
terms for conversion or exchange, if any, into other securities, the initial
offering or purchase price, methods of distribution and any other special terms;
and (ii) in the case of Preferred Securities, the identity of the Issuer Trust,
specific title, aggregate amount, stated liquidation preference, distribution
rate or the method of calculating such rate, applicable Extension Period or
Distribution deferral terms, if any, dates on which and place or places where
Distributions will be payable, voting rights, any redemption provisions, terms
for any conversion or exchange into other securities, initial offering or
purchase price, methods of distribution, and any other special terms.
The Prospectus Supplement will also contain information, as applicable,
concerning certain United States federal income tax considerations relating to
the Offered Securities.
The Offered Securities may be sold directly by CPL, CPL Capital I
and/or CPL Capital II, as the case may be (each, an "Issuer"), through agents
designated from time to time or through underwriters or dealers. See "Plan of
Distribution." If any agents of an Issuer or underwriters are involved in the
sale of any Offered Securities in respect of which this Prospectus is being
delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in a Prospectus Supplement. The net
proceeds to an Issuer or Issuers, as the case may be, from such sale also will
be set forth in a Prospectus Supplement or Prospectus Supplements. The
Prospectus Supplement will state whether the Offered Securities will be listed
on any national securities exchange or the Nasdaq National Market. If the
Offered Securities are not listed on any national securities exchange or the
Nasdaq National Market, there can be no assurance that there will be a liquid
secondary market for such Offered Securities.
This Prospectus may not be used to consummate sales of Offered
Securities unless accompanied by a Prospectus Supplement relating to such
Offered Securities.
<PAGE>
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AVAILABLE INFORMATION
CPL is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information (including
proxy and information statements) filed by CPL can be inspected and copied at
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at the following Regional Offices
of the Commission: New York Regional Office, 7 World Trade Center, 13th Floor,
New York, New York 10048, and Chicago Regional Office, Citicorp Center, 500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of the prescribed rates. The
Commission also maintains a web site (http://www.sec.gov.) that contains
reports, proxy statements and other information regarding CPL.
CPL and the Issuer Trusts have filed with the Commission a joint
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in such
Registration Statement and the exhibits thereto, certain portions of which have
been omitted as permitted by the rules and regulations of the Commission. For
further information with respect to CPL, the Issuer Trusts and the Offered
Securities, reference is hereby made to such Registration Statement, including
the exhibits thereto, which may be examined at the Commission's principal
office, 450 Fifth Street, N.W., Washington, D.C. 20549 or through the
Commission's home page on the Internet, or copies of which may be obtained from
the Commission at such office upon payment of the fees prescribed by the
Commission. Statements made in this Prospectus concerning the contents of any
documents referred to herein are not necessarily complete, and in each instance
are qualified in all respects by reference to the copy of such document filed as
an exhibit to the Registration Statement.
No separate financial statements of the Issuer Trusts have been
included herein. CPL and the Issuer Trusts do not consider that such financial
statements would be material to holders of Preferred Securities offered hereby
because each Issuer Trust is a newly formed special purpose entity, has no
operating history, has no independent operations and is not engaged in, and does
not propose to engage in, any activity other than as set forth below.
Furthermore, taken together, CPL's obligations under each series of
Corresponding Junior Subordinated Debentures, the Indenture, the related Trust
Agreement, the related Expense Agreement and the related Guarantee, provide in
the aggregate, a guarantee of Distributions and other amounts due on the related
Preferred Securities of the Issuer Trusts. See "The Issuer Trusts," "Description
of the Preferred Securities," "Description of Guarantees" and "Description of
Corresponding Junior Subordinated Debentures." In addition, CPL does not expect
that any of the Issuer Trusts will be filing reports under the Exchange Act with
the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by CPL with the Commission pursuant to
the Exchange Act are incorporated in this Prospectus by reference:
(1) CPL's Annual Report on Form 10-K for the year ended December 31, 1995;
(2) CPL's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1996, June 30, 1996 and September 30, 1996; and
(3) CPL's Current Reports on Form 8-K dated February 13, 1996, June 24,
1996 and January 7, 1997.
All documents filed by CPL pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents"; provided, however, that all documents
subsequently filed by CPL pursuant to Section 13 or 14 of the Exchange Act in
each year during which the offering made by this Prospectus is in effect prior
to the filing with the Commission of CPL's Annual Report on Form 10-K covering
such year shall not be Incorporated Documents or be incorporated by reference in
this Prospectus or be a part hereof from and after such filing of such Annual
Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
CPL hereby undertakes to provide without charge to each person to whom
a copy of this Prospectus is delivered, on the written or oral request of any
such person, a copy of any or all of the Incorporated Documents, other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference therein. Requests should be directed to Central and South West
Corporation, 1616 Woodall Rodgers Freeway, Dallas, Texas 75202, Attention:
Director, Finance, telephone number (214) 777-1000. The information relating to
CPL contained in this Prospectus does not purport to be comprehensive and should
be read together with the information contained in the Incorporated Documents.
No person has been authorized to give any information or to make any
representation not contained in this Prospectus or in any Prospectus Supplement,
and, if given or made, such information or representation should not be relied
upon as having been authorized. This Prospectus and any Prospectus Supplement do
not constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby or thereby in any jurisdiction to any person to whom
it is unlawful to make such offer in such jurisdiction.
Neither the delivery of this Prospectus and the Prospectus Supplement
nor any sale made hereunder or thereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of CPL or its
subsidiaries since the date of this Prospectus or the date of the latest
Prospectus Supplement, as the case may be.
<PAGE>
CENTRAL POWER AND LIGHT COMPANY
Central Power and Light Company, a Texas corporation ("CPL"), is a
public utility company engaged in the production, purchase, transmission,
distribution and sale of electricity in South Texas. Central and South West
Corporation ("CSW"), a registered public utility holding company under the
Public Utility Holding Company Act of 1935, as amended (the "1935 Act"), owns
all of the issued and outstanding common stock of CPL. CPL's executive offices
are located at 539 North Carancahua Street, Corpus Christi, Texas 78401-2802,
telephone number (512) 881-5300.
The foregoing information relating to CPL does not purport to be
comprehensive and should be read together with the financial statements and
other information contained in the Incorporated Documents.
THE ISSUER TRUSTS
Each Issuer Trust is a statutory business trust created under Delaware
law pursuant to (i) a trust agreement executed by CPL, as depositor of such
Issuer Trust, the Delaware Trustee (as defined herein) of such Issuer Trust, the
Property Trustee (as defined herein) of such Issuer Trust and the Administrative
Trustees (as defined herein) of such Issuer Trust and (ii) the filing of a
certificate of trust with the Delaware Secretary of State. Each trust agreement
will be amended and restated in its entirety (each, as so amended and restated,
a "Trust Agreement") substantially in the form filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Each Trust
Agreement will be qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). Each Issuer Trust exists for the
exclusive purposes of (i) issuing and selling its Preferred Securities and
Common Securities, (ii) using the proceeds from the sale of such Preferred
Securities and Common Securities to acquire a corresponding series of
Corresponding Junior Subordinated Debentures issued by CPL and (iii) engaging in
only those other activities necessary, convenient or incidental thereto.
Accordingly, such Corresponding Junior Subordinated Debentures will be the sole
assets of such Issuer Trust, and payments under such Corresponding Junior
Subordinated Debentures and the related Expense Agreement (as defined herein)
will be the sole source of revenue of such Issuer Trust.
All of the Common Securities of each Issuer Trust will be owned by CPL.
The Common Securities of an Issuer Trust will rank pari passu, and payments will
be made thereon pro rata, with the Preferred Securities of such Issuer Trust,
except that upon the occurrence and continuance of an event of default under a
Trust Agreement resulting from a Debenture Event of Default (as defined herein),
the rights of CPL as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Preferred Securities of such
Issuer Trust. See "Description of Preferred Securities--Subordination of Common
Securities." CPL will acquire Common Securities having an aggregate Liquidation
Amount (as defined herein) equal to not less than 3% of the total capital of
each Issuer Trust.
Unless otherwise specified in the applicable Prospectus Supplement,
each Issuer Trust has a term of up to 45 years, but may terminate earlier as
provided in the applicable Trust Agreement. Each Issuer Trust's business and
affairs are conducted by its trustees, which will be appointed by CPL as holder
of the Common Securities.
Unless otherwise specified in the applicable Prospectus Supplement, the
trustees will be The Bank of New York, as Property Trustee, (the "Property
Trustee"), The Bank of New York (Delaware), as the Delaware Trustee (the
"Delaware Trustee"), and two individual trustees (the "Administrative Trustees")
who are employees or officers of or affiliated with CPL (collectively, the
"Issuer Trustees"). The Bank of New York, as Property Trustee, will act as sole
indenture trustee under each Trust Agreement for purposes of compliance with the
Trust Indenture Act. The Bank of New York will also act as trustee under the
Guarantee and the Indenture (each as defined herein). See "Description of
Guarantees" and "Description of Junior Subordinated Debentures." The holder of
the Common Securities, or the holders of a majority in liquidation preference of
the Preferred Securities if a Debenture Event of Default under the Trust
Agreement has occurred and is continuing, will be entitled to appoint, remove or
replace the Property Trustee and/or the Delaware Trustee. In no event will the
holders of the Preferred Securities have the right to vote to appoint, remove or
replace the Administrative Trustees; such voting rights are vested exclusively
in the holder of the Common Securities. The duties and obligations of each
Issuer Trustee are governed by the applicable Trust Agreement. CPL will pay all
fees and expenses related to each Issuer Trust and the offering of the Preferred
Securities and will pay, directly or indirectly, all ongoing costs, expenses and
liabilities of each Issuer Trust. The principal executive office of each Issuer
Trust is 539 North Carancahua Street, Corpus Christi, Texas 78401-2802;
telephone number (512) 881-5300.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, the net
proceeds to be received by CPL from the issuance and sale of the Junior
Subordinated Debentures (including Corresponding Junior Subordinated Debentures
issued to the Issuer Trusts in connection with the investment by the Issuer
Trusts of all of the proceeds from the sale of Preferred Securities) will
initially become part of the general funds of CPL and will be used to replace or
retire, through redemption, repurchase or otherwise, one or more series of
outstanding first mortgage bonds or preferred stock, or any combination thereof,
to repay all or a portion of CPL's short-term borrowings outstanding at the time
of issuance of the Offered Securities and for other general corporate purposes,
subject to applicable regulatory requirements. Reference is made to the
Incorporated Documents with respect to CPL's capital requirements and its
general financing plans. Each Issuer Trust will invest all proceeds received
from the sale of Preferred Securities in Corresponding Junior Subordinated
Debentures.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND
REQUIREMENTS
The following table sets forth CPL's ratios of earnings to fixed
charges and ratios of earnings to combined fixed charges and preferred stock
dividend requirements for the years and periods indicated:
<TABLE>
Year Ended December 31,
Twelve Months
Ended
September 30, 1996 1995 1994 1993 1992 1991
------------------ ---- ---- ---- ---- ----
(unaudited)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Earnings to Fixed Charges 2.98 2.63 3.24 2.69 3.23 3.18
Earnings to Combined Fixed Charges and
Preferred Stock Dividend 2.56 2.36 2.82 2.31 2.77 2.65
Requirements
(unaudited)
</TABLE>
For computation of the ratios: (i) earnings consist of operating income
plus federal income taxes, deferred income taxes and investment tax credits,
other income and deductions, allowance for funds (both borrowed and equity) used
during construction and mirror construction work in progress amortization, and
(ii) fixed charges consist of interest on long-term debt and short-term debt,
and other interest charges. Pretax earnings required for preferred stock
dividends were computed using the effective tax rate for the applicable year.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures may be issued from time to time in
one or more series under an Indenture dated as of , as supplemented and amended
from time to time (the "Indenture"), between CPL and The Bank of New York, as
trustee (the "Debenture Trustee"). The Corresponding Junior Subordinated
Debentures may be issued from time to time in one or more series of
Corresponding Junior Subordinated Debentures under the Indenture between CPL and
the Debenture Trustee. CPL may issue Junior Subordinated Debentures to the
public or to institutional investors as described under "Plan of Distribution"
or Corresponding Junior Subordinated Debentures to the Issuer Trusts in
connection with the issuance of Preferred Securities. The following summary is
subject to the provisions of and is qualified by reference to the Indenture,
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and to the Trust Indenture Act. Whenever particular
provisions or defined terms in the Indenture are referred to herein or in a
Prospectus Supplement, such provisions or defined terms are incorporated herein
or therein by reference. Section and Article references used herein are
references to provisions of the Indenture unless otherwise noted. Except as
otherwise provided herein, this summary of certain terms and provisions of
Junior Subordinated Debentures is also applicable to the Corresponding Junior
Subordinated Debentures. For additional terms and provisions applicable only to
the Corresponding Junior Subordinated Debentures, see "Description of
Corresponding Junior Subordinated Debentures."
General
Each series of Junior Subordinated Debentures will rank pari passu with
all other series of Junior Subordinated Debentures, will be unsecured and will
be subordinated and junior in right of payment to the extent and in the manner
set forth in the Indenture to all Senior Indebtedness (as defined below) of CPL.
See "--Subordination." As the Junior Subordinated Debentures will be issued by
CPL, the Junior Subordinated Debentures effectively will be subordinate to all
obligations of any CPL subsidiaries, and the rights of CPL's creditors,
including holders of Junior Subordinated Debentures, to participate in the
assets of such subsidiaries upon liquidation or reorganization will be junior to
the rights of the holders of all preferred stock, indebtedness and other
liabilities of such subsidiaries, which may include trade payables, obligations
to banks under credit facilities, guarantees, pledges, support arrangements,
bonds, capital leases, notes and other obligations. CPL currently has no
subsidiaries. Except as otherwise provided in the applicable Prospectus
Supplement, the Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of CPL, whether under the Indenture, any other
indenture that CPL may enter into in the future or otherwise. See
"--Subordination" and the Prospectus Supplement relating to any offering of
Preferred Securities or Junior Subordinated Debentures.
The Indenture provides that Junior Subordinated Debentures may be
issued from time to time in one or more series pursuant to an indenture
supplemental to the Indenture or a resolution of CPL's Board of Directors or an
Officer's Certificate (each, a "Supplemental Indenture"). (Section 2.01) The
Indenture does not limit the aggregate principal amount of Junior Subordinated
Debentures that may be issued thereunder. CPL's Restated Articles of
Incorporation, as amended (the "Articles"), currently limit the amount of
unsecured debt that CPL may issue to (i) the equivalent of 20% of the total of
all secured indebtedness and total equity or (ii) as to unsecured debt maturing
in less than ten years, the equivalent of 10% of such aggregate. CPL is
currently seeking to amend its Articles to eliminate such limitations. The
Indenture does not contain any provisions that would limit the ability of CPL to
incur indebtedness or that would afford holders of Junior Subordinated
Debentures protection in the event of a highly leveraged or similar transaction
involving CPL or in the event of a change of control.
Reference is made to the Prospectus Supplement for the following terms
of the series of Junior Subordinated Debentures being offered thereby: (i) the
specific title of such Junior Subordinated Debentures; (ii) any limit on the
aggregate principal amount of such Junior Subordinated Debentures; (iii) the
date or dates on which the principal of such Junior Subordinated Debentures is
payable or the method of determination thereof (including any provision for the
shortening thereof); (iv) the rate or rates at which such Junior Subordinated
Debentures will bear interest, if any, or the manner of calculation of such rate
or rates; (v) the date or dates from which such interest shall accrue, the
interest payment dates on which such interest will be payable or the manner of
determination of such interest payment dates and the record dates for the
determination of holders to whom interest is payable on any such interest
payment dates; (vi) the right, if any, of CPL to extend or defer the interest
payment periods and the duration of such extension or deferral; (vii) the period
or periods within which, the price or prices at which and the terms and
conditions upon which such Junior Subordinated Debentures may be redeemed, in
whole or in part, at the option of CPL; (viii) the obligation, if any, of CPL to
redeem or purchase such Junior Subordinated Debentures pursuant to any sinking
fund or analogous provisions or at the option of a holder thereof and the period
or periods during which, the price or prices at which and the terms and
conditions upon which such Junior Subordinated Debentures shall be redeemed or
purchased, in whole or part, pursuant to such obligation; (ix) the form of such
Junior Subordinated Debentures; (x) if other than denominations of $25 or any
integral multiple thereof, the denominations in which such Junior Subordinated
Debentures shall be issuable; (xi) whether such Junior Subordinated Debentures
are issuable as a global security, and in such case, the identity of the
depositary; and (xii) any and all other terms with respect to such series not
inconsistent with the provisions of the Indenture. (Section 2.01)
Subordination
The Indenture provides that Junior Subordinated Debentures are
subordinate and junior in right of payment to the prior payment in full of all
Senior Indebtedness of CPL, whether outstanding on the date of such issuance of
Junior Subordinated Debentures or thereafter incurred, as provided in the
Indenture. No payment of principal of (including redemption and sinking fund
payments), or premium, if any, or interest on, the Junior Subordinated
Debentures may be made if any Senior Indebtedness is not paid when due, any
applicable grace period with respect to such default has ended and such default
has not been cured or waived, or if the maturity of any Senior Indebtedness has
been accelerated because of a default. Upon any payment or distribution of
assets to creditors upon any dissolution, winding-up, liquidation or
reorganization of CPL, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due or to become due
on all Senior Indebtedness must be paid in full before the holders of the Junior
Subordinated Debentures are entitled to receive or retain any payment. The
rights of the holders of the Junior Subordinated Debentures will be subrogated
to the rights of the holders of Senior Indebtedness to receive payments or
distributions applicable to Senior Indebtedness until all amounts owing on the
Junior Subordinated Debentures are paid in full. (Sections 14.01 to 14.04) The
Junior Subordinated Debentures effectively will also be subordinate to all
obligations of CPL's subsidiaries, if any. See "--General."
The term "Senior Indebtedness" is defined in the Indenture to mean the
principal of and premium, if any, and interest on and any other payment due
pursuant to any of the following, whether outstanding at the date of execution
of the Indenture or thereafter incurred, created or assumed:
(a) all indebtedness of CPL evidenced by notes, debentures, bonds or
other securities sold by CPL for money;
(b) all indebtedness of others of the kinds described in paragraph (a)
above assumed by or guaranteed in any manner by CPL or in effect
guaranteed by CPL through an agreement to purchase, contingent or
otherwise;
(c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of paragraphs (a) and (b) above; and
(d) all payments of money relating to any lease which is capitalized on
the balance sheet or consolidated balance sheet, as the case may be,
of CPL or its subsidiaries, if any, in accordance with generally
accepted accounting principles as in effect from time to time;
unless, in the case of any particular indebtedness, renewal, extension,
refunding or lease payment, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension, refunding or lease payment is not superior in
right of payment to or is pari passu with the Junior Subordinated Debentures.
Such Senior Indebtedness shall continue to be Senior Indebtedness and entitled
to the benefits of the subordination provisions contained in the Indenture
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness. (Section 1.01)
The Indenture does not limit the aggregate amount of Senior
Indebtedness which may be issued. As of December 31, 1996, Senior Indebtedness
of CPL aggregated approximately $1,671 million. CPL expects from time to time to
incur additional indebtedness constituting Senior Indebtedness.
Certain Covenants of CPL
If there shall have occurred any event that would, with the giving of
notice or the passage of time, or both, constitute a Debenture Event of Default
under the Indenture, as described under "--Debenture Events of Default" below,
or CPL exercises its option to extend or defer the interest payment period
described in clause (vi) under "--General" above, CPL will not, until all
defaulted interest on the Junior Subordinated Debentures and all interest
accrued on the Junior Subordinated Debentures during any such extended or
deferred interest payment period and all principal and premium, if any, then due
and payable on the Junior Subordinated Debentures shall have been paid in full,
(i) declare, set aside or pay any dividend or distribution on any capital stock
of CPL, except for dividends or distributions in shares of its capital stock or
in rights to acquire shares of its capital stock, or (ii) repurchase, redeem or
otherwise acquire, or make any sinking fund payment for the purchase or
redemption of, any shares of its capital stock (except by conversion into or
exchange for shares of its capital stock and except for a redemption, purchase
or other acquisition of shares of its capital stock made for the purpose of an
employee incentive plan or benefit plan of CPL or any of its subsidiaries and
except for mandatory redemption or sinking fund payments with respect to any
series of Preferred Stock of CPL that are subject to mandatory redemption or
sinking fund requirements, provided that the aggregate stated value of all such
series outstanding at the time of any such payment does not exceed five percent
of the aggregate of (1) the total principal amount of all bonds or other
securities representing secured indebtedness issued or assumed by CPL and then
outstanding and (2) the capital and surplus of CPL to be stated on the books of
account of CPL after giving effect to such payment); provided, however, that any
moneys deposited in any sinking fund and not in violation of this provision may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund without regard to the
restrictions contained in this provision. (Section 4.06) As of October 31, 1996,
CPL had no such series of Preferred Stock outstanding. With respect to any
issuance of Corresponding Junior Subordinated Debentures in connection with the
issuance of Preferred Securities, CPL will make certain additional covenants as
described under "Description of Corresponding Junior Subordinated Debentures."
Form, Exchange, Registration and Transfer
Each series of Junior Subordinated Debentures will be issued in
registered form and in certificated form or will be represented by one or more
global securities. If not represented by one or more global securities, Junior
Subordinated Debentures may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) or exchange, at the office of
the Registrar or at the office of any transfer agent designated by CPL for such
purpose with respect to any series of Junior Subordinated Debentures and
referred to in an applicable Prospectus Supplement, without service charge and
upon payment of any taxes and other governmental charges as described in the
Indenture. Such transfer or exchange will be effected upon the Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. (Section 2.05) If a Prospectus
Supplement refers to any transfer agent (in addition to the Registrar) initially
designated by CPL with respect to any series of Junior Subordinated Debentures,
CPL may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer agent acts,
except that CPL will be required to maintain a transfer agent in each Place of
Payment for such series. (Section 4.02) CPL may at any time designate additional
transfer agents with respect to any series of Junior Subordinated Debentures.
The Junior Subordinated Debentures may be transferred or exchanged without
service charge, other than any tax or governmental charge imposed in connection
therewith. (Section 2.05)
In the event of any redemption in part, CPL shall not be required to
(i) issue, register the transfer of or exchange any Junior Subordinated
Debenture during a period beginning at the opening of business 15 days before
any selection for redemption of Junior Subordinated Debentures of like tenor and
of the series of which such Junior Subordinated Debenture is a part, and ending
at the close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures of like tenor and of such series to be redeemed and (ii) register the
transfer of or exchange any Junior Subordinated Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Debenture being redeemed in part. (Section 2.05)
Payment and Paying Agents
Unless otherwise indicated in the Prospectus Supplement, payment of
principal of and premium, if any, on any Junior Subordinated Debenture will be
made only against surrender to the Paying Agent of such Junior Subordinated
Debenture. Unless otherwise indicated in the Prospectus Supplement, principal of
and premium, if any, and interest on Junior Subordinated Debentures will be
payable, subject to any applicable laws and regulations, at the office of such
Paying Agent or Paying Agents as CPL may designate from time to time, except
that at the option of CPL payments on the Junior Subordinated Debentures may be
made (i) by checks mailed by the Debenture Trustee to the holders entitled
thereto at their registered addresses as specified in the Register for such
Junior Subordinated Debentures or (ii) to a holder of $1,000,000 or more in
aggregate principal amount of such Junior Subordinated Debentures who has
delivered a written request to the Debenture Trustee at least 14 days prior to
the relevant Interest Payment Date electing to have payments made by wire
transfer to a designated account in the United States, by wire transfer of
immediately available funds to such designated account; provided that, in either
case, the payment of principal with respect to any Junior Subordinated Debenture
will be made only upon surrender of such Junior Subordinated Debenture to the
Debenture Trustee. Unless otherwise indicated in the Prospectus Supplement,
payment of interest on a Junior Subordinated Debenture on any Interest Payment
Date will be made to the person in whose name such Junior Subordinated Debenture
(or Predecessor Junior Subordinated Debenture) is registered at the close of
business on the record date for such interest payment. (Sections 2.03 and 4.03)
The Debenture Trustee will initially act as Paying Agent with respect
to the Junior Subordinated Debentures. CPL may at any time designate additional
Paying Agents or rescind the designation of any Paying Agents or approve a
change in the office through which any Paying Agent acts, except that CPL will
be required to maintain a Paying Agent in each Place of Payment for each series
of the Junior Subordinated Debentures. (Sections 4.02 and 4.03)
All moneys paid by CPL to a Paying Agent for the payment of the
principal of or premium, if any, or interest on any Junior Subordinated
Debenture of any series that remain unclaimed at the end of two years after such
principal, premium, if any, or interest shall have become due and payable will
be repaid to CPL and the holder of such Junior Subordinated Debenture will
thereafter look only to CPL for payment thereof. (Section 11.06)
Global Debentures
The Junior Subordinated Debentures of a series may be issued in whole
or in part in the form of one or more global securities ("Global Junior
Subordinated Debentures") that will be deposited with, or on behalf of, a
depositary (the "Depositary") identified in the Prospectus Supplement relating
to such series. Global Junior Subordinated Debentures may be issued only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Junior Subordinated
Debentures represented thereby, a Global Junior Subordinated Debenture may not
be transferred except as a whole by the Depositary for such Global Junior
Subordinated Debenture to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor Depositary. (Section 2.11)
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debentures to be represented by a
Global Junior Subordinated Debenture will be described in the Prospectus
Supplement relating to such series. CPL anticipates that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the
deposit of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or its
nominee will credit on its book-entry registration and transfer system, the
respective principal amounts of the individual Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture to the accounts of
persons that have accounts with such Depositary ("Participants"). Such accounts
shall be designated by the dealers, underwriters or agents with respect to such
Junior Subordinated Debentures or by CPL if such Junior Subordinated Debentures
are offered and sold directly by CPL. Ownership of beneficial interests in a
Global Junior Subordinated Debenture will be limited to Participants or persons
that may hold interests through Participants. Ownership of beneficial interests
in such Global Junior Subordinated Debenture will be shown on, and the transfer
of that ownership will be effected only through, records maintained by the
applicable Depositary or its nominee (with respect to interests of Participants)
and the records of Participants (with respect to interests of persons who hold
through Participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Junior Subordinated Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture,
or its nominee, is the registered owner of such Global Junior Subordinated
Debenture, such Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture for all purposes under
the Indenture governing such Junior Subordinated Debentures. Except as provided
below, owners of beneficial interests in a Global Junior Subordinated Debenture
will not be entitled to have any of the individual Junior Subordinated
Debentures of the series represented by such Global Junior Subordinated
Debenture registered in their names, will not receive or be entitled to receive
physical delivery of any such Junior Subordinated Debentures of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payments of principal of, premium, if any, and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Junior Subordinated Debenture representing such Junior Subordinated
Debentures. None of CPL, the Debenture Trustee, any Paying Agent, or the
Registrar for such Junior Subordinated Debentures will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Global Junior Subordinated
Debentures representing such Junior Subordinated Debentures or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
CPL expects that the Depositary for a series of Junior Subordinated
Debentures or its nominee, upon receipt of any payment of principal, premium, if
any, or interest in respect of a permanent Global Junior Subordinated Debenture
representing any of such Junior Subordinated Debentures, immediately will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Junior
Subordinated Debenture representing such Junior Subordinated Debentures as shown
on the records of such Depositary or its nominee. CPL also expects that payments
by Participants to owners of beneficial interests in such Global Junior
Subordinated Debenture held through such Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name." Such payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if
a Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by CPL within 90 days, CPL will issue individual
Junior Subordinated Debentures of such series in exchange for the Global Junior
Subordinated Debenture representing such series of Junior Subordinated
Debentures. In addition, CPL may at any time and in its sole discretion, subject
to any limitations described in the Prospectus Supplement relating to such
Junior Subordinated Debentures, determine not to have any Junior Subordinated
Debentures of such series represented by one or more Global Junior Subordinated
Debentures and, in such event, will issue individual Junior Subordinated
Debentures of such series in exchange for the Global Junior Subordinated
Debenture representing such series of Junior Subordinated Debentures. Further,
if CPL so specifies with respect to the Junior Subordinated Debentures of a
series, an owner of a beneficial interest in a Global Junior Subordinated
Debenture representing Junior Subordinated Debentures of such series may, on
terms acceptable to CPL, the Debenture Trustee and the Depositary for such
Global Junior Subordinated Debenture, receive individual Junior Subordinated
Debentures of such series in exchange for such beneficial interest, subject to
any limitations described in the Prospectus Supplement relating to such Junior
Subordinated Debentures. In any such instance, an owner of a beneficial interest
in a Global Junior Subordinated Debenture will be entitled to physical delivery
of individual Junior Subordinated Debentures of the series represented by such
Global Junior Subordinated Debenture equal in principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures of such series so issued
will be issued in denominations, unless otherwise specified by CPL, of $25 and
integral multiples thereof. (Section 2.11)
Redemption
Unless otherwise indicated in the applicable Prospectus Supplement,
Junior Subordinated Debentures will not be subject to any sinking fund.
The applicable Prospectus Supplement will specify the period or periods
within which, the price or prices at which and the terms and conditions upon
which the Junior Subordinated Debentures of any series may be redeemed, in whole
or in part, at the option of CPL. Junior Subordinated Debentures in
denominations larger than $25 may be redeemed in part but only in integral
multiples of $25. Except as otherwise specified in the applicable Prospectus
Supplement, the redemption price for any Junior Subordinated Debenture so
redeemed shall equal any accrued and unpaid interest thereon to the redemption
date, plus 100% of the principal amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement,
if a Debenture Tax Event (as defined below) in respect of a series of Junior
Subordinated Debentures shall occur and be continuing, CPL may, at its option,
redeem such series of Junior Subordinated Debentures in whole (but not in part)
at any time within 90 days of the occurrence of such Debenture Tax Event, at a
redemption price equal to 100% of the principal amount of such Junior
Subordinated Debentures then outstanding plus accrued and unpaid interest to the
date fixed for redemption.
"Debenture Tax Event" means the receipt by CPL of an opinion of
counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such pronouncement or
decision is announced on or after the date of issuance of the applicable series
of Junior Subordinated Debentures under the Indenture, there is more than an
insubstantial risk that interest payable by CPL on such series of Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion,
will not be, deductible by CPL, in whole or in part, for United States federal
income tax purposes.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Junior Subordinated
Debentures to be redeemed at its registered address (Section 3.02). Unless CPL
defaults in payment of the redemption price, on and after the redemption date
interest will cease to accrue on such Junior Subordinated Debentures or portions
thereof called for redemption.
Option to Extend Interest Payment Date
If provided in the applicable Prospectus Supplement, CPL shall have the
right at any time or from time to time during the term of any series of Junior
Subordinated Debentures to defer the payment of interest for such number of
consecutive interest payment periods with respect to each deferred period as may
be specified in the applicable Prospectus Supplement (each, an "Extension
Period"), subject to the terms, conditions and covenants, if any, specified in
such Prospectus Supplement, provided that such Extension Period may not extend
beyond the maturity of such series of Junior Subordinated Debentures. Certain
United States federal income tax consequences and special considerations
applicable to any such Junior Subordinated Debentures will be described in the
applicable Prospectus Supplement. In the event that CPL exercises this right,
certain restrictions will be applicable to CPL as described under "--Certain
Covenants of CPL."
Agreed Tax Treatment
The Indenture provides that each holder of a Junior Subordinated
Debenture, each person that acquires a beneficial ownership interest in a Junior
Subordinated Debenture and CPL agree that for United States federal, state and
local tax purposes it is intended that such Junior Subordinated Debenture
constitute indebtedness. (Section 13.12)
Modification of Indenture
The Indenture contains provisions permitting CPL and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Junior Subordinated Debentures of each series which are
affected by the modification, to modify the Indenture or any supplemental
indenture affecting that series or the rights of the holders of that series of
Junior Subordinated Debentures; provided that no such modification may, without
the consent of the holder of each outstanding Junior Subordinated Debenture
affected thereby, (i) extend the fixed maturity of any Junior Subordinated
Debentures of any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof or (ii) reduce the percentage of Junior
Subordinated Debentures, the holders of which are required to consent to any
such supplemental indenture. (Section 9.02) In the case of Corresponding Junior
Subordinated Debentures, so long as any of the related series of Preferred
Securities remain outstanding, CPL will covenant in the applicable Supplemental
Indenture that no such modification may be made that adversely affects the
holders of such Preferred Securities in any material respect, and no termination
of the Indenture may occur, and no waiver of any Debenture Event of Default or
non-compliance with any covenant under the Indenture may be effective, without
the prior consent of the holders of at least a majority of the aggregate
liquidation preference of such Preferred Securities unless and until the
principal of the Corresponding Junior Subordinated Debentures and all accrued
and unpaid interest thereon have been paid in full and certain other conditions
are satisfied. See "Description of Corresponding Junior Subordinated
Debentures."
In addition, CPL and the Debenture Trustee may execute, without the
consent of any holder of Junior Subordinated Debentures (including the Junior
Subordinated Debentures being offered hereby), any supplemental indenture for
certain other usual purposes, including the creation of any new series of Junior
Subordinated Debentures. (Sections 2.01, 9.01 and 10.01)
Debenture Events of Default
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures, which has
occurred and is continuing, constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(a) failure for 60 days to pay interest on the Junior Subordinated
Debentures of that series when due and payable (subject to CPL's right to defer
interest payments pursuant to an Extension Period as described under "--Option
to Extend Interest Payment Date"); or
(b) failure for 3 days to pay principal of or premium, if any, on the
Junior Subordinated Debentures of that series when due whether at maturity, upon
redemption, by declaration or otherwise, or to make any sinking or analogous
fund payment if established with respect to that series; or
(c) failure to observe or perform any other covenant (other than those
specifically relating to one or more other series of Junior Subordinated
Debentures) contained in the Indenture for 90 days after notice; or
(d) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging CPL a bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation or reorganization of CPL under the
Federal Bankruptcy Code or any other similar applicable federal or state law,
and such decree or order shall have continued unvacated and unstayed for a
period of 90 days; an involuntary case shall be commenced under such Code in
respect of CPL and shall continue undismissed for a period of 90 days or an
order for relief in such case shall have been entered; or a decree or order of a
court having jurisdiction in the premises shall have been entered for the
appointment on the ground of insolvency or bankruptcy of a receiver, custodian,
liquidator, trustee or assignee in bankruptcy or insolvency of CPL or of its
property, or for the winding up or liquidation of its affairs, and such decree
or order shall have remained in force unvacated and unstayed for a period of 90
days; or
(e) CPL shall institute proceedings to be adjudicated a voluntary
bankrupt, shall consent to the filing of a bankruptcy proceeding against it,
shall file a petition or answer or consent seeking liquidation or reorganization
under the Federal Bankruptcy Code or other similar applicable federal or state
law, shall consent to the filing of any such petition or shall consent to the
appointment on the ground of insolvency or bankruptcy of a receiver or custodian
or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its
property, or shall make an assignment for the benefit of creditors; or
(f) any other Event of Default specified with respect to the Junior
Subordinated Debentures of that series (Section 6.01).
The holders of a majority in aggregate outstanding principal amount of
any series of the Junior Subordinated Debentures have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Debenture Trustee for that series. (Section 6.06) The Debenture Trustee or
the holders of not less than 33% in aggregate outstanding principal amount of
any particular series of the Junior Subordinated Debentures may declare the
principal due and payable immediately upon a Debenture Event of Default with
respect to such series and, in the case of Corresponding Junior Subordinated
Debentures, should the Debenture Trustee or such holders of such Corresponding
Junior Subordinated Debentures fail to make such declaration, the holders of at
least 33% in aggregate liquidation preference of the related series of Preferred
Securities shall have such right.
At any time after a declaration of acceleration with respect to the
Junior Subordinated Debentures of any series has been made and before a judgment
or decree for payment of the money due has been obtained, the Debenture Event or
Events of Default giving rise to such declaration of acceleration will, without
further act, be deemed to have been waived, and such declaration and its
consequences will, without further act, be deemed to have been rescinded and
annulled, if:
(a) CPL has paid or deposited with the Debenture Trustee a sum
sufficient to pay:
(1) all overdue interest on all Junior Subordinated
Debentures of such series;
(2) the principal of and premium, if any, on any Junior
Subordinated Debentures of such series which have become due otherwise
than by such declaration of acceleration and interest thereon at the
rate or rates prescribed therefor in such Junior Subordinated
Debentures;
(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Junior Subordinated Debentures, to the
extent that payment of such interest is lawful;
(4) all amounts due to the Debenture Trustee under the
Indenture; and
(b) any other Debenture Event or Events of Default with respect to
Junior Subordinated Debentures of such series, other than the
nonpayment of the principal of the Junior Subordinated Debentures of
such series which has become due solely by such declaration of
acceleration, have been cured or waived as provided in the Indenture.
(Section 6.01)
The holders of a majority in aggregate outstanding principal amount of
all series of the Junior Subordinated Debentures affected thereby may, on behalf
of the holders of all the Junior Subordinated Debentures of such series, waive
any past default, except a default in the payment of principal, premium, if any,
or interest. (Section 6.06) In the case of Corresponding Junior Subordinated
Debentures, should the holders of such Corresponding Junior Subordinated
Debentures fail to waive such default, the holders of a majority in aggregate
liquidation preference of the related series of Preferred Securities shall have
such right. CPL is required to file annually with the Debenture Trustee a
certificate as to whether or not CPL is in compliance with all the conditions
and covenants under the Indenture. (Section 5.03(d))
In case a Debenture Event of Default shall occur and be continuing as
to a series of Corresponding Junior Subordinated Debentures, the Property
Trustee will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debentures and any other amounts payable under
the Indenture, to be forthwith due and payable and to enforce its other rights
as a creditor with respect to such Corresponding Junior Subordinated Debentures.
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of CPL to pay interest or principal on the
Corresponding Junior Subordinated Debentures on the date such interest or
principal is otherwise payable, then a holder of Preferred Securities may
institute a Direct Action (as defined below under "Description of Preferred
Securities -- Enforcement of Certain Rights by Holders of Preferred Securities")
for payment after the respective due dates specified in the Corresponding Junior
Subordinated Debentures. CPL may not amend the Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of the holders
of all of the Preferred Securities. CPL shall be subrogated to the rights of the
holder of such Preferred Securities with respect to payments on the Preferred
Securities to the extent of any payments made by CPL to such holder in any
Direct Action.
The holders of the Preferred Securities would not be able to exercise
directly any rights against CPL other than those set forth in the preceding
paragraph available to the holders of the Corresponding Junior Subordinated
Debentures unless the Property Trustee or the Debenture Trustee, acting for the
benefit of the Property Trustee, fails to do so for 60 days. In such event, to
the fullest extent permitted by law, the holders of at least 33% in aggregate
liquidation preference of the outstanding Preferred Securities would have the
right to directly institute proceedings for enforcement of such rights. See
"Description of Preferred Securities -- Enforcement of Certain Rights by Holders
of Preferred Securities."
Consolidation, Merger and Sale
The Indenture does not contain any covenant which restricts CPL's
ability to merge or consolidate with or into any other corporation, sell or
convey all or substantially all of its assets to any corporation or otherwise
engage in restructuring transactions. (Section 10.01)
Conversion or Exchange
Unless otherwise indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures of any series may be convertible or exchangeable
into Preferred Securities or other securities. The specific terms on which
Junior Subordinated Debentures of any series may be so converted or exchanged
will be set forth in the applicable Prospectus Supplement. Such terms may
include provisions for conversion or exchange, either mandatory, at the option
of the holder, or at the option of CPL, in which case the number of shares of
Preferred Securities or other securities to be received by the holders of Junior
Subordinated Debentures would be calculated as of a time and in the manner
stated in the applicable Prospectus Supplement.
Defeasance and Discharge
Under the terms of the Indenture, if CPL deposits with the Debenture
Trustee, in trust, moneys or Government Obligations, in an amount sufficient to
pay all the principal of, and interest on, the Junior Subordinated Debentures of
any series on the dates such payments are due in accordance with the terms of
such Junior Subordinated Debentures and if CPL delivers to the Debenture Trustee
an Opinion of Counsel to the effect that the holders of Junior Subordinated
Debentures of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and the release of certain
obligations of the Company (as described below) and will be subject to federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit and release had not occurred:
(a) CPL will be released from substantially all of its covenants and
other obligations contained in the Indenture and thereafter any failure
to comply with any such covenant or obligation will not constitute a
Default or a Debenture Event of Default with respect to the Junior
Subordinated Debentures of such series;
(b) the occurrence of an event described in clause (c) under "Debenture
Events of Default" above will no longer constitute a Default or a
Debenture Event of Default with respect to the Junior Subordinated
Debentures of such series; and
(c) the Junior Subordinated Debentures of such series will thereafter
be deemed not to be outstanding for purposes of determining whether the
holders of the requisite aggregate principal amount of Junior
Subordinated Debentures have approved any amendment, modification or
waiver with respect to any covenant or obligation described in clause
(a) above or any event described in clause (b) above;
provided that the foregoing will not relieve CPL of its obligations to make
payments in respect of the Junior Subordinated Debentures of such series.
In addition to discharging certain obligations under the Indenture as
stated above, if CPL delivers to the Debenture Trustee an Opinion of Counsel (in
lieu of the Opinion of Counsel referred to above) to the effect that (a) CPL has
received from, or there has been published by, the Internal Revenue Service a
ruling or (b) since the date of the Indenture there has been a change in
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the holders of Junior
Subordinated Debentures of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount and in
the same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred, and (c) the trust resulting
from the defeasance is a valid trust and will not constitute a regulated
investment company under the Investment Company Act of 1940, as amended, then,
in such event, CPL will be deemed to have paid and discharged the entire
indebtedness on the Junior Subordinated Debentures (except as to any surviving
rights such as rights of registration of transfer or exchange expressly provided
for in the Indenture). In the event of any such defeasance and discharge of
Junior Subordinated Debentures of such series, holders of Junior Subordinated
Debentures of such series would be able to look only to such trust fund for
payment of principal of (and premium, if any) and interest, if any, on the
Junior Subordinated Debentures of such series. (Sections 11.01, 11.02 and 11.03)
Prospective investors are urged to consult their own tax advisors as to the
specific consequences to them of such deposit.
Governing Law
The Indenture and the Junior Subordinated Debentures will be governed
by, and construed in accordance with, the laws of the State of New York.
(Section 13.04)
Information Concerning the Debenture Trustee
The Debenture Trustee, prior to default, undertakes to perform only
such duties as are specifically set forth in the Indenture and, after default,
shall exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. (Section 7.01) Subject to such provision,
the Debenture Trustee is under no obligation to exercise any of the powers
vested in it by the Indenture at the request of any holder of Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
(Section 7.02) The Debenture Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the Debenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it. (Section 7.01)
The Bank of New York serves as trustee and agent under agreements
involving CPL and its affiliates.
Miscellaneous
CPL will have the right at all times to assign any of its rights or
obligations under the Indenture to a direct or indirect wholly-owned subsidiary
of CPL; provided that, in the event of any such assignment, CPL will remain
liable for all such obligations. Subject to the foregoing, the Indenture will be
binding upon and inure to the benefit of the parties thereto and their
respective successors and permitted assigns. The Indenture provides that it may
not otherwise be assigned by the parties thereto. (Section 13.11)
DESCRIPTION OF PREFERRED SECURITIES
The Preferred Securities and the Common Securities of each Issuer Trust
will be created pursuant to the terms of the Trust Agreement for each Issuer
Trust. The Preferred Securities of a particular issue will represent preferred
undivided beneficial interests in the assets of the related Issuer Trust and the
holders thereof will be entitled to a preference in certain circumstances with
respect to Distributions and amounts payable on redemption or liquidation over
the Common Securities of such Issuer Trust, as well as other benefits as
described in the corresponding Trust Agreement. This summary of certain
provisions of the Preferred Securities and each Trust Agreement does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, all the provisions of each Trust Agreement, including the definitions
therein of certain terms, and the Trust Indenture Act. Wherever particular
defined terms of a Trust Agreement (as supplemented or amended from time to
time) are referred to herein or in a Prospectus Supplement, such defined terms
are incorporated herein or therein by reference. The form of each Trust
Agreement has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. Each of the Issuer Trusts is a legally separate
entity and the assets of one are not available to satisfy the obligations of any
of the others.
General
The Preferred Securities of an Issuer Trust will rank pari passu, and
payments will be made thereon pro rata, with the Common Securities of that
Issuer Trust except as described below under "--Subordination of Common
Securities." Legal title to the Corresponding Junior Subordinated Debentures
will be held by the Property Trustee in trust for the benefit of the holders of
the related Preferred Securities and Common Securities. Each Guarantee Agreement
executed by CPL for the benefit of the holders of an Issuer Trust's Preferred
Securities (each, a "Guarantee") will be a guarantee on a subordinated basis
with respect to the related Preferred Securities but will not guarantee payment
of Distributions or amounts payable on redemption or liquidation of such
Preferred Securities when the related Issuer Trust does not have funds on hand
available to make such payments. See "Description of Guarantees."
Distributions
Each Issuer Trust's Preferred Securities represent preferred undivided
beneficial interests in the assets of such Issuer Trust, and the Distributions
on each Preferred Security will be payable at a rate specified in the Prospectus
Supplement for such Preferred Securities. The amount of Distributions payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months unless otherwise specified in the applicable Prospectus Supplement.
Distributions to which holders of Preferred Securities are entitled will
accumulate additional Distributions ("Additional Amounts") if and as specified
in the applicable Prospectus Supplement. The term "Distributions" as used herein
includes any Additional Amounts unless otherwise stated.
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable Prospectus Supplement. In the event that any date
on which Distributions are payable on the Preferred Securities is not a Business
Day (as defined below), payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, payment of such Distribution shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed or a day on which the corporate trust office of
the Property Trustee or the Debenture Trustee is closed for business.
If provided in the applicable Prospectus Supplement, CPL has the right
under the Indenture to defer the payment of interest on any series of the
Corresponding Junior Subordinated Debentures at any time or from time to time
for one or more Extension Periods, subject to the terms, conditions and
covenants, if any, specified in the applicable Prospectus Supplement, provided
that no Extension Period may extend beyond the maturity of such series of
Corresponding Junior Subordinated Debentures. As a consequence of any such
extension, Distributions on the corresponding Preferred Securities would be
deferred (but would continue to accumulate additional Distributions thereon at
the rate per annum set forth in the Prospectus Supplement for such Preferred
Securities) by the Issuer Trust of such Preferred Securities during any such
Extension Period. During such Extension Period CPL may not, and may not permit
any subsidiary of CPL to, (i) declare, set aside or pay any dividend or
distribution on, or repurchase, redeem, or otherwise acquire or make any sinking
fund payment with respect to, any shares of CPL's capital stock, including the
Common Stock of CPL, or (ii) make any payment of principal, interest or premium,
if any, on or repay, repurchase or redeem any debt securities that rank pari
passu with or junior in interest to the Corresponding Junior Subordinated
Debentures or make any guarantee payments with respect to the foregoing (other
than (a) dividends or distributions in shares of its capital stock or in rights
to acquire shares of its capital stock, (b) conversions into or exchanges for
shares of its capital stock, (c) redemptions, purchases or other acquisitions of
shares of its capital stock made for the purpose of an employee incentive plan
or benefit plan of CPL or any of its subsidiaries and mandatory redemptions or
sinking fund payments with respect to any series of Preferred Stock of CPL that
are subject to mandatory redemption or sinking fund requirements, provided that
the aggregate stated value of all such series outstanding at the time of any
such payment does not exceed five percent of the aggregate of (1) the total
principal amount of all bonds or other securities representing secured
indebtedness issued or assumed by CPL and then outstanding and (2) the capital
and surplus of CPL to be stated on the books of account of CPL after giving
effect to such payment, provided, however, that any moneys deposited in any
sinking fund and not in violation of this provision may thereafter be applied to
the purchase or redemption of such Preferred Stock in accordance with the terms
of such sinking fund without regard to the restrictions contained in this
provision, and (d) payments under any guarantee by CPL with respect to any
securities of a subsidiary of CPL, provided that the proceeds from the issuance
of such securities were issued to purchase Junior Subordinated Debentures of any
series under the Indenture). See "Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date," and "--Certain Covenants of
CPL" and "Description of Corresponding Junior Subordinated Debentures--Certain
Covenants of CPL."
The revenue of each Issuer Trust available for distribution to holders
of its Preferred Securities will be limited to payments under the Corresponding
Junior Subordinated Debentures in which such Issuer Trust will invest the
proceeds from the issuance and sale of its Preferred Securities and its Common
Securities. See "Description of Corresponding Junior Subordinated Debentures."
If CPL does not make interest payments on such Corresponding Junior Subordinated
Debentures, the Property Trustee will not have funds available to pay
Distributions on the related Preferred Securities. The payment of Distributions
(if and to the extent the Issuer Trust has funds available for the payment of
such Distributions and cash sufficient to make such payments) is guaranteed by
CPL on a limited basis as set forth herein under "Description of Guarantees."
Distributions on the Preferred Securities of each Issuer Trust will be
payable to the holders thereof as they appear on the register of such Issuer
Trust on the relevant record dates, which, as long as the Preferred Securities
remain in book-entry form, will be one Business Day prior to the relevant
Distribution Date. Subject to any applicable laws and regulations and the
provisions of the applicable Trust Agreement, each such payment will be made as
described under "--Book-entry Issuance." In the event any Preferred Securities
are not in book-entry form, the relevant record date for such Preferred
Securities shall be a date at least 15 days prior to the relevant Distribution
Date, as specified in the applicable Prospectus Supplement.
Redemption or Exchange
Mandatory Redemption. Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Subordinated Debentures, whether at maturity
or upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the related Preferred Securities and Common
Securities, upon not less than 30 nor more than 60 days' notice prior to the
date fixed for repayment or redemption (the "Redemption Date"), at a redemption
price equal to the aggregate liquidation preference of such Preferred Securities
plus accumulated and unpaid Distributions thereon to the Redemption Date (the
"Redemption Price") and the related amount of the premium, if any, paid by CPL
upon the concurrent redemption of such Corresponding Junior Subordinated
Debentures. See "Description of Corresponding Junior Subordinated Debentures --
Optional Redemption." If less than all of any series of Corresponding Junior
Subordinated Debentures are to be repaid or redeemed on a Redemption Date, then
the proceeds from such repayment or redemption shall be allocated to the
redemption pro rata of the related Preferred Securities and the Common
Securities. The amount of premium, if any, paid by CPL upon the redemption of
all or any part of any series of any Corresponding Junior Subordinated
Debentures to be repaid or redeemed on a Redemption Date shall be allocated to
the redemption pro rata of the related Preferred Securities and the Common
Securities.
CPL will have the right to redeem any series of Corresponding Junior
Subordinated Debentures at any time, in whole (but not in part), upon the
occurrence of a Tax Event or an Investment Company Event (each as defined below,
a "Special Event") and subject to the further conditions described under
"Description of Corresponding Junior Subordinated Debentures--Optional
Redemption." In addition, the applicable Prospectus Supplement will specify the
period or periods within which, the price or prices at which and the terms and
conditions upon which the Corresponding Junior Subordinated Debentures of any
series may be redeemed, in whole or in part, at the option of CPL. Corresponding
Junior Subordinated Debentures in denominations larger than $25 may be redeemed
in part but only in integral multiples of $25. Except as otherwise specified in
the applicable Prospectus Supplement, the Redemption Price for any Corresponding
Junior Subordinated Debenture so redeemed shall equal any accrued and unpaid
interest thereon to the Redemption Date, plus 100% of the principal amount
thereof.
Special Event Redemption or Distribution of Corresponding
Junior Subordinated Debentures.
If a Special Event in respect of a series of Preferred Securities and
Common Securities shall occur and be continuing, CPL has the right to redeem the
Corresponding Junior Subordinated Debentures in whole (but not in part) and
thereby cause a mandatory redemption of such Preferred Securities and Common
Securities in whole (but not in part) within 90 days following the occurrence of
such Special Event at the Redemption Price. Whether or not a Special Event has
occurred, CPL has the right to terminate the related Issuer Trust at any time
and, after satisfaction of liabilities to creditors of such Issuer Trust, if
any, as provided by applicable law, cause such Corresponding Junior Subordinated
Debentures to be distributed to the holders of such Preferred Securities and
Common Securities in liquidation of the Issuer Trust. If CPL does not elect
either option described above, the applicable series of Preferred Securities
will remain outstanding and, in the event a Tax Event has occurred and is
continuing, Additional Sums (as defined below) may be payable on the
Corresponding Junior Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by an Issuer Trust
on the outstanding Preferred Securities and Common Securities of the Issuer
Trust shall not be reduced as a result of any additional taxes, duties and other
governmental charges to which such Issuer Trust has become subject as a result
of a Tax Event.
"Investment Company Event" means the receipt by the applicable Issuer
Trust of an opinion of counsel, rendered by a law firm having a recognized
national tax and securities practice, to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law") the applicable
Issuer Trust is or will be considered an "investment company" that is required
to be registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), which Change in 1940 Act Law becomes effective on or
after the date of original issuance of the series of Preferred Securities issued
by the applicable Issuer Trust.
"Like Amount" means (i) with respect to a redemption of any series of
Preferred Securities, Preferred Securities and Common Securities of such series
having a Liquidation Amount (as defined below) equal to that portion of the
principal amount of Corresponding Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture and the proceeds of
which will be used to pay the Redemption Price of such Preferred Securities and
Common Securities, and (ii) with respect to a distribution of Corresponding
Junior Subordinated Debentures to holders of any series of Preferred Securities
in connection with a termination or liquidation of the related Issuer Trust,
Corresponding Junior Subordinated Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities or Common Securities of the
holder to whom such Corresponding Junior Subordinated Debentures are
distributed.
"Liquidation Amount" means the stated amount of $25 per Preferred
Security and Common Security.
"Tax Event" means the receipt by the applicable Issuer Trust of an
opinion of counsel, rendered by a law firm having a recognized national tax and
securities practice, to the effect that, as a result of any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States, or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the related Trust Agreement, there is more than an
insubstantial risk that (i) the applicable Issuer Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the corresponding series of
Corresponding Junior Subordinated Debentures, (ii) interest payable by CPL on
such series of Corresponding Junior Subordinated Debentures is not, or within 90
days of the date of such opinion, will not be, deductible by CPL, in whole or in
part, for United States federal income tax purposes, or (iii) the applicable
Issuer Trust is, or will be within 90 days of the date of such opinion, subject
to more than a de minimis amount of other taxes, duties or other governmental
charges.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debentures for any series of Preferred Securities and Common
Securities (i) such series of Preferred Securities and Common Securities will no
longer be deemed to be outstanding, (ii) The Depository Trust Company ("DTC") or
its nominee, as the record holder of such series of Preferred Securities, will
receive a registered global certificate or certificates representing the
Corresponding Junior Subordinated Debentures to be delivered upon such
distribution and (iii) any certificates representing such series of Preferred
Securities not held by DTC or its nominee will be deemed to represent the
Corresponding Junior Subordinated Debentures having a principal amount equal to
the stated liquidation preference of such series of Preferred Securities, and
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on such series of Preferred Securities until such certificates are
presented to the Administrative Trustees or their agent for transfer or
reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debentures that may be
distributed in exchange for Preferred Securities if a termination and
liquidation of an Issuer Trust were to occur. Accordingly, the Preferred
Securities that an investor may purchase, or the Corresponding Junior
Subordinated Debentures that the investor may receive on termination and
liquidation of an Issuer Trust, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities offered hereby.
Redemption Procedures
Preferred Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debentures. Redemptions of
the Preferred Securities shall be made and the Redemption Price shall be payable
on each Redemption Date only to the extent that the related Issuer Trust has
funds on hand available for the payment of such Redemption Price. See also
"--Subordination of Common Securities."
If an Issuer Trust gives a notice of redemption in respect of its
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are available, the Property Trustee will deposit
irrevocably with DTC, funds sufficient to pay the applicable Redemption Price
and will give DTC irrevocable instructions and authority to pay the Redemption
Price to the holders of such Preferred Securities. See "--Book-entry Issuance."
If such Preferred Securities are no longer in book-entry form, such Issuer
Trust, to the extent funds are available, will irrevocably deposit with the
paying agent for such Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing such Preferred Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Preferred Securities called for redemption shall be
payable to the holder of such Preferred Securities as of the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date of such deposit,
all rights of the holders of such Preferred Securities so called for redemption
will cease, except the right of the holders of such Preferred Securities to
receive the Redemption Price, but without interest on such Redemption Price, and
such Preferred Securities will cease to be outstanding. In the event that any
date fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the Redemption Price in
respect of Preferred Securities called for redemption is improperly withheld or
refused and not paid either by the Issuer Trust or by CPL pursuant to the
Guarantee as described under "Description of Guarantees," Distributions on such
Preferred Securities will continue to accrue at the then applicable rate, from
the Redemption Date originally established by the Issuer Trust for such
Preferred Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), CPL or its subsidiaries, if any, may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debentures to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; provided, however, that in the event that any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be the fifteenth day prior to the Redemption
Date or liquidation date, as applicable, as specified in the applicable
Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities
issued by an Issuer Trust are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of such Preferred Securities and Common Securities
to be redeemed shall be allocated pro rata among the Preferred Securities and
Common Securities. The particular Preferred Securities to be redeemed shall be
selected on a pro rata basis not more than 60 days prior to the Redemption Date
by the Property Trustee from the outstanding Preferred Securities not previously
called for redemption, by such method as the Property Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $25 or an integral multiple of $25 in excess thereof) of the
liquidation preference of Preferred Securities of a denomination larger than
$25. The Property Trustee shall promptly notify the trust registrar in writing
of the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the liquidation preference
thereof to be redeemed. For all purposes of each Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the aggregate
liquidation preference of Preferred Securities which has been or is to be
redeemed.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each holder of Preferred Securities
to be redeemed at its registered address.
Subordination of Common Securities
Payment of Distributions (including Additional Sums, if applicable) on,
and the Redemption Price of, each Issuer Trust's Preferred Securities and Common
Securities, as applicable, shall be made pro rata based on the Liquidation
Amount of such Preferred Securities and Common Securities; provided, however,
that if on any Distribution Date or Redemption Date any Event of Default
resulting from a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Sums, if
applicable) on, or Redemption Price of, any of the Issuer Trust's Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions (including Additional
Amounts, if applicable) on all of the Issuer Trust's outstanding Preferred
Securities for all Distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all of the Issuer Trust's outstanding Preferred Securities then called
for redemption, shall have been made or provided for, and all funds available to
the Property Trustee shall first be applied to the payment in full in cash of
all Distributions (including Additional Sums, if applicable) on, or Redemption
Price of, the Issuer Trust's Preferred Securities then due and payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, CPL as holder of each Issuer Trust's Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
the applicable Trust Agreement until the effect of all such Events of Default
with respect to such Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Events of Default under the applicable Trust
Agreement with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
holders of such Preferred Securities and not on behalf of CPL as holder of the
Common Securities, and only the holders of such Preferred Securities will have
the right to direct the Property Trustee to act on their behalf.
Liquidation Distribution Upon Termination
Pursuant to each Trust Agreement, each Issuer Trust shall automatically
terminate upon expiration of its term and shall be terminated on the first to
occur of: (i) certain events of bankruptcy, dissolution or liquidation of CPL;
(ii) the distribution of a Like Amount of the Corresponding Junior Subordinated
Debentures to the holders of its Preferred Securities and Common Securities if
CPL, as Depositor, has given written direction to the Property Trustee to
terminate such Issuer Trust (which direction is optional and wholly within the
discretion of CPL as Depositor); (iii) the redemption of all of such Issuer
Trust's Preferred Securities as described under "--Redemption or Exchange"; and
(iv) the entry by a court of competent jurisdiction of an order for the
dissolution of such Issuer Trust.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, such Issuer Trust shall be liquidated by the Issuer Trustees as
expeditiously as the Issuer Trustees determine to be possible by distributing,
after satisfaction of liabilities to creditors of such Issuer Trust as provided
by applicable law, to the holders of such Preferred Securities and Common
Securities a Like Amount of the Corresponding Junior Subordinated Debentures,
unless such distribution is determined by the Property Trustee not to be
practical, in which event such holders will be entitled to receive out of the
assets of the Issuer Trust available for distribution to holders, after
satisfaction of liabilities to creditors of such Issuer Trust as provided by
applicable law, an amount equal to, in the case of holders of Preferred
Securities, the aggregate of the liquidation preference plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because such Issuer Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by such
Issuer Trust on its Preferred Securities shall be paid on a pro rata basis. The
holders of such Issuer Trust's Common Securities will be entitled to receive
distributions upon any such liquidation pro rata with the holders of its
Preferred Securities, except that if a Debenture Event of Default has occurred
and is continuing, such Preferred Securities shall have a priority over such
Common Securities. A supplemental indenture may provide that if an early
termination occurs as described in clause (iv) above, the Corresponding Junior
Subordinated Debentures may be subject to optional redemption in whole (but not
in part).
Events of Default; Notice
Any one of the following events constitutes an "Event of Default" under
each Trust Agreement (an "Event of Default") with respect to the Preferred
Securities issued thereunder (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the
Indenture with respect to the Corresponding Junior Subordinated
Debentures (see "Description of Junior Subordinated Debentures --
Debenture Events of Default"); or
(ii) default by an Issuer Trust in the payment of any
Distribution with respect to Preferred Securities of that issue when it
becomes due and payable, and continuation of such default for a period
of 30 days; or
(iii) default by an Issuer Trust in the payment of any
Redemption Price of any Preferred Security or Common Security of that
issue when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in such
Trust Agreement (other than a covenant or warranty a default in the
performance of which or the breach of which is dealt with in clause
(ii) or (iii) above), and continuation of such default or breach for a
period of 60 days after there has been given, by registered or
certified mail, to the defaulting Issuer Trustee or Trustees by the
holders of at least 33% in aggregate liquidation preference of the
outstanding Preferred Securities of that issue, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" under such Trust
Agreement; or
(v) the occurrence of certain events of bankruptcy or
insolvency with respect to the Property Trustee and the failure by CPL
to appoint a successor Property Trustee within 60 days thereof.
Within 15 Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such Issuer Trust's Preferred
Securities, the Administrative Trustees and CPL, as Depositor, unless such Event
of Default shall have been cured or waived. CPL, as Depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under each Trust Agreement.
If, in the event of a Debenture Event of Default, the Debenture Trustee
fails or the holders of not less than 33% in aggregate principal amount of the
Corresponding Junior Subordinated Debentures fail to declare the principal due
and payable, the holders of at least 33% in aggregate liquidation preference of
the related series of Preferred Securities shall have such right. Except as set
forth above, the existence of an Event of Default does not entitle the holders
of Preferred Securities to accelerate the maturity thereof or declare amounts
due and payable.
If a Debenture Event of Default with respect to any Corresponding
Junior Subordinated Debentures has occurred and is continuing, the corresponding
Preferred Securities shall have a preference over the related Common Securities
upon termination of the applicable Issuer Trust as described above. See
"--Liquidation Distribution Upon Termination."
Enforcement of Certain Rights by Holders of Preferred Securities
If a Debenture Event of Default has occurred and is continuing, then
the holders of Preferred Securities would rely on the enforcement by the
Property Trustee or the Debenture Trustee, acting for the benefit of the
Property Trustee, of its rights as a holder of the Corresponding Junior
Subordinated Debentures against CPL. Notwithstanding the foregoing, if a
Debenture Event of Default has occurred and is continuing and such event is
attributable to the failure of CPL to pay interest or principal on the
Corresponding Junior Subordinated Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a holder of Preferred Securities may directly institute a proceeding
against CPL for enforcement of payment to such holder of the principal of or
interest on the Corresponding Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation preference of the Preferred Securities
of such holder (a "Direct Action") after the respective due dates specified in
the Corresponding Junior Subordinated Debentures. In connection with such Direct
Action, CPL will be subrogated to the rights of such holder of Preferred
Securities with respect to payments on the Preferred Securities to the extent of
any payment made by CPL to such holder of Preferred Securities in such Direct
Action.
The holders of the Preferred Securities would not be able to exercise
directly against CPL any rights other than those set forth in the preceding
paragraph available to the holders of the Corresponding Junior Subordinated
Debentures unless the Property Trustee or the Debenture Trustee, acting for the
benefit of the Property Trustee, fails to do so for 60 days. In such event, to
the fullest extent permitted by law, the holders of at least 33% in aggregate
liquidation preference of the outstanding Preferred Securities would have the
right to directly institute proceedings for enforcement of such rights.
Removal of Issuer Trustees
Unless a Debenture Event of Default with respect to any Corresponding
Junior Subordinated Debentures shall have occurred and be continuing, the
applicable Issuer Trustee may be removed at any time by the holder of the
related Common Securities. If such a Debenture Event of Default has occurred and
is continuing, the Property Trustee and the Delaware Trustee may be removed at
such time by the holders of a majority in Liquidation Amount of the outstanding
corresponding Preferred Securities. In no event will the holders of the
Preferred Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in CPL as
the holder of the Common Securities. No resignation or removal of an Issuer
Trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the applicable Trust Agreement.
Co-trustees and Separate Property Trustee
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the applicable
Trust Property may at the time be located, CPL, as the holder of the Common
Securities, shall have power to appoint one or more persons either to act as a
co-trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such person or persons in such capacity any property, title, right or
power deemed necessary or desirable, subject to the provisions of the applicable
Trust Agreement. In case a Debenture Event of Default with respect to any
Corresponding Junior Subordinated Debentures has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment.
Merger or Consolidation of Issuer Trustees
Any entity into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
entity succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under each Trust Agreement,
provided such entity shall be otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Issuer Trusts
An Issuer Trust may not merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. An Issuer Trust may, at the request of CPL, with the consent of
the Administrative Trustees and without the consent of the holders of the
Preferred Securities of such Issuer Trust, merge with or into, consolidate,
amalgamate, be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the laws
of any State; provided that (i) such successor entity either (a) expressly
assumes all of the obligations of such Issuer Trust with respect to such
Preferred Securities or (b) substitutes for such Preferred Securities other
securities having substantially the same terms as such Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as
such Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) CPL expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Corresponding Junior Subordinated
Debentures, (iii) the Successor Securities are listed or traded, or any
Successor Securities will be listed or traded upon notification of issuance, on
any national securities exchange or other organization on which such Preferred
Securities are then listed, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause such
Preferred Securities (including any Successor Securities) to be downgraded by
any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of such
Preferred Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose substantially identical to
that of such Issuer Trust, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, CPL has received an
opinion from independent counsel to such Issuer Trust experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of such Preferred Securities
(including any Successor Securities) in any material respect, and (b) following
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, neither such Issuer Trust nor such successor entity will be required to
register as an "investment company" under the Investment Company Act and (viii)
CPL or any permitted successor or assignee owns all of the common securities of
such successor entity and guarantees the obligations of such successor entity
under the Successor Securities at least to the extent provided by the applicable
Guarantee. Notwithstanding the foregoing, an Issuer Trust shall not, except with
the consent of holders of 100% in aggregate liquidation preference of the
Preferred Securities of such Issuer Trust, consolidate, amalgamate, merge with
or into, be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause such Issuer Trust or the successor entity to be classified as other
than a "grantor trust" for United States federal income tax purposes.
Voting Rights; Amendment of Trust Agreement
Except as provided below and under "Description of
Guarantees--Amendments and Assignment" and as otherwise required by law and the
applicable Trust Agreement, the holders of the Preferred Securities will have no
voting rights.
Each Trust Agreement may be amended from time to time by CPL and the
Administrative Trustees, without the consent of the holders of the related
Preferred Securities, (i) to reflect the acceptance of appointment by a
successor Issuer Trustee, (ii) to cure any ambiguity, correct or supplement any
provisions in such Trust Agreement that may be inconsistent with any other
provision, or to make any other provisions with respect to matters or questions
arising under such Trust Agreement, that shall not be inconsistent with the
other provisions of such Trust Agreement, or (iii) to modify, eliminate or add
to any provisions of such Trust Agreement to such extent as shall be necessary
to ensure that the related Issuer Trust will be classified for United States
federal income tax purposes as a "grantor trust" at all times that any Preferred
Securities and Common Securities of such Issuer Trust are outstanding or to
ensure that such Issuer Trust will not be required to register as an "investment
company" under the Investment Company Act, provided, however, that in the case
of clause (ii) above, such action shall not adversely affect in any material
respect the interests of any holder of Preferred Securities or Common Securities
of such Issuer Trust, and, in the case of clause (iii), any amendments of such
Trust Agreement shall become effective when notice thereof is given to the
holders of such Preferred Securities and Common Securities. Such Trust Agreement
may be amended by the Administrative Trustees and CPL with (i) the consent of
holders representing not less than a majority (based upon Liquidation Amounts)
of such outstanding Preferred Securities and Common Securities and (ii) receipt
by the Issuer Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Issuer Trustees in
accordance with such amendment will not affect such Issuer Trust's status as a
"grantor trust" for United States federal income tax purposes or such Issuer
Trust's exemption from status as an "investment company" under the Investment
Company Act, provided, further that without the consent of each holder of such
Preferred Securities and Common Securities, such Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on such Preferred
Securities and Common Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of such Preferred Securities and
Common Securities as of a specified date or (ii) restrict the right of holders
of such Preferred Securities and Common Securities to institute suit for the
enforcement of any such payment on or after such date as described under
"--Events of Default; Notice" above.
So long as any Corresponding Junior Subordinated Debentures are held by
the Property Trustee, the Issuer Trustees shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee or executing any trust or power conferred on the Property Trustee with
respect to such Corresponding Junior Subordinated Debentures, (ii) waive any
past default that is waivable under the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Corresponding
Junior Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or such Corresponding
Junior Subordinated Debentures, where such consent shall be required, without,
in each case, obtaining the prior approval of the holders of a majority in
aggregate liquidation preference of all outstanding corresponding Preferred
Securities; provided, however, that where a consent under the Indenture would
require the consent of each holder of Corresponding Junior Subordinated
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior consent of each holder of the corresponding Preferred
Securities. The Issuer Trustees shall not revoke any action previously
authorized or approved by a vote of the holders of the Preferred Securities
except by subsequent vote of the holders of the Preferred Securities. The
Property Trustee shall notify each holder of record of the Preferred Securities
of any notice of default with respect to the Corresponding Junior Subordinated
Debentures. In addition to obtaining the foregoing approvals of the holders of
the Preferred Securities, prior to taking any of the foregoing actions, the
Issuer Trustees shall obtain an opinion of counsel experienced in such matters
to the effect that the applicable Issuer Trust will be classified as a "grantor
trust" and will not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given
at a meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be given to each holder of record of Preferred Securities in the manner set
forth in the applicable Trust Agreement.
No vote or consent of the holders of Preferred Securities will be
required for an Issuer Trust to redeem and cancel its Preferred Securities in
accordance with the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by CPL, the Issuer Trustees or any affiliate
of CPL or any Issuer Trustees shall, for purposes of such vote or consent, be
treated as if they were not outstanding.
Payment and Paying Agency
Payments in respect of the Preferred Securities shall be made to DTC,
which shall credit the relevant accounts at DTC on the applicable Distribution
Dates or, if any Issuer Trust's Preferred Securities are not held by DTC, such
payments shall be made by check mailed to the address of the holder entitled
thereto as such address shall appear on the Register. Unless otherwise specified
in the applicable Prospectus Supplement, the paying agent (the "Paying Agent")
shall initially be the Property Trustee and any co-paying agent chosen by the
Property Trustee and acceptable to the Administrative Trustees and CPL. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Property Trustee and CPL. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the Property
Trustee and CPL) to act as Paying Agent.
Book-entry Issuance
DTC will act as securities depositary for all of the Preferred
Securities. The Preferred Securities will be issued only as fully-registered
securities registered in the name of Cede & Co. (DTC's nominee). One or more
fully-registered global certificates will be issued for the Preferred Securities
of each Issuer Trust, representing in the aggregate the total number of such
Issuer Trust's Preferred Securities, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain custodial
relationships with Direct Participants, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchases of Preferred Securities within the DTC system must be made by
or through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Preferred Securities, except in the event that use
of the book-entry system for the Preferred Securities of such Issuer Trust is
discontinued.
To facilitate subsequent transfers, all of the Preferred Securities
deposited by the Participants with DTC are registered in the name of DTC's
nominee, Cede & Co. The deposit of Preferred Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Redemption notices shall be sent to Cede & Co. as the registered holder
of the Preferred Securities. If less than all of an Issuer Trust's Preferred
Securities are being redeemed, DTC's current practice is to determine by lot the
amount of the interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities is limited to
the holders of record of the Preferred Securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Preferred Securities. Under its usual procedures, DTC would mail an
omnibus proxy (the "Omnibus Proxy") to the Property Trustee as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts such Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Distribution payments on the Preferred Securities will be made by the
Property Trustee to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participant and not of DTC, the
Property Trustee, the Issuer Trust thereof or CPL, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
Distributions to DTC is the responsibility of the Property Trustee, disbursement
of such payments to Direct Participants is the responsibility of DTC, and
disbursements of such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary
with respect to any of the Preferred Securities at any time by giving reasonable
notice to the Property Trustee and CPL. In the event that a successor securities
depositary is not obtained, definitive Preferred Security certificates
representing such Preferred Securities are required to be printed and delivered.
CPL, at its option, may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor depositary). After a Debenture Event of
Default, the holders of a majority in liquidation preference of Preferred
Securities may determine to discontinue the system of book-entry transfers
through DTC. In any such event, definitive certificates for such Issuer Trust's
Preferred Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Issuer Trusts and CPL believe to
be accurate, but the Issuer Trusts and CPL assume no responsibility for the
accuracy thereof. None of the Issuer Trusts, any Issuer Trustee nor CPL has any
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
Registrar and Transfer Agent
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected
without charge by or on behalf of each Issuer Trust, but upon payment of any tax
or other governmental charges that may be imposed in connection with any
transfer or exchange. The Issuer Trusts will not be required to register or
cause to be registered the transfer of their Preferred Securities after such
Preferred Securities have been called for redemption.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance
of an Event of Default, undertakes to perform only such duties as are
specifically set forth in each Trust Agreement and, after such Event of Default,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the applicable Trust Agreement at the request of any
holder of Preferred Securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities that might be incurred thereby. If no Event
of Default has occurred and is continuing and the Property Trustee is required
to decide between alternative causes of action, construe ambiguous provisions in
the applicable Trust Agreement or is unsure of the application of any provision
of the applicable Trust Agreement, and the matter is not one on which holders of
Preferred Securities are entitled under such Trust Agreement to vote, then the
Property Trustee shall take such action as is directed by CPL and if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Preferred Securities and the Common Securities and will
have no liability except for its own bad faith, negligence or willful
misconduct.
Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuer Trusts in such a way that no Issuer Trust
will be deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Corresponding
Junior Subordinated Debentures will be treated as indebtedness of CPL for United
States federal income tax purposes. In this connection, CPL and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of each Issuer Trust or each Trust
Agreement, that CPL and the Administrative Trustees determine in their
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
related Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar
rights.
No Issuer Trust may borrow money or issue debt or mortgage or pledge
any of its assets.
DESCRIPTION OF GUARANTEES
Each Guarantee will be executed and delivered by CPL concurrently with
the issuance by each Issuer Trust of its Preferred Securities for the benefit of
the holders from time to time of such Preferred Securities. The Bank of New York
will act as indenture trustee ("Guarantee Trustee") under each Guarantee for the
purposes of compliance with the Trust Indenture Act and each Guarantee will be
qualified as an indenture under the Trust Indenture Act. This summary of certain
provisions of the Guarantees does not purport to be complete and is subject to,
and qualified in its entirety by reference to, all of the provisions of each
Guarantee, including the definitions therein of certain terms, and the Trust
Indenture Act. The form of each Guarantee has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Reference in this
summary to the Preferred Securities and the Issuer Trust mean the Preferred
Securities of an Issuer Trust and such Issuer Trust, respectively, to which a
Guarantee relates. The Guarantee Trustee will hold each Guarantee for the
benefit of the holders of the related Issuer Trust's Preferred Securities.
General
CPL will irrevocably agree to pay in full on a subordinated basis, to
the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Preferred Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that such Issuer Trust may have or assert other
than the defense of payment. The following payments with respect to the
Preferred Securities, to the extent not paid by or on behalf of the related
Issuer Trust (the "Guarantee Payments"), will be subject to the Guarantees: (i)
any accumulated and unpaid Distributions required to be paid on such Preferred
Securities, to the extent that such Issuer Trust has funds on hand available
therefor, (ii) the Redemption Price with respect to any Preferred Securities
called for redemption to the extent that such Issuer Trust has funds on hand
available therefor, and (iii) upon a voluntary or involuntary termination,
winding up or liquidation of such Issuer Trust (unless the Corresponding Junior
Subordinated Debentures are distributed to holders of such Preferred
Securities), the lesser of (a) the Liquidation Amount plus accumulated and
unpaid Distributions on the Preferred Securities to the date of payment to the
extent that such Issuer Trust has funds on hand available therefor and (b) the
amount of assets of such Issuer Trust remaining available for distribution to
holders of Preferred Securities. CPL's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by CPL to the holders
of the applicable Preferred Securities or by causing the Issuer Trust to pay
such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis
of the related Issuer Trust's obligations under the Preferred Securities, but
will apply only to the extent that such related Issuer Trust has funds
sufficient to make such payments, and is not a guarantee of collection.
If CPL does not make interest payments on the Corresponding Junior
Subordinated Debentures held by the Issuer Trust, it is expected the Issuer
Trust will not be able to pay Distributions on the Preferred Securities and will
not have funds available therefor. Each Guarantee will rank subordinate and
junior in right of payment to all Senior Indebtedness of CPL. See "--Status of
the Guarantees." Except as otherwise provided in the applicable Prospectus
Supplement, the Guarantees do not limit the incurrence or issuance of other
secured or unsecured debt of CPL, whether under the Indenture or any existing or
other indenture that CPL may enter into in the future or otherwise.
CPL has, through the applicable Guarantee, the applicable Trust
Agreement, the Junior Subordinated Debentures, the Indenture and the Expense
Agreements (as defined below), taken together, fully, irrevocably and
unconditionally guaranteed all of the Issuer Trust's obligations under the
Preferred Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such a
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer Trust's obligations under the Preferred Securities. See "Relationship
Among the Preferred Securities, the Corresponding Junior Subordinated Debentures
and the Guarantees."
Status of the Guarantees
Each Guarantee will constitute an unsecured obligation of CPL and will
rank subordinate and junior in right of payment to all Senior Indebtedness of
CPL.
Each Guarantee will rank pari passu with all other Guarantees issued by
CPL. Each Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
CPL to enforce its rights under the Guarantee without first instituting a legal
proceeding against any other person or entity). Each Guarantee will be held for
the benefit of the holders of the related Preferred Securities. Each Guarantee
will not be discharged except by payment of the related Guarantee Payments in
full to the extent not paid by the related Issuer Trust or upon distribution to
the holders of the Preferred Securities of the Corresponding Junior Subordinated
Debentures. None of the Guarantees places a limitation on the amount of
additional Senior Indebtedness that may be incurred by CPL. CPL may, from time
to time, incur additional indebtedness constituting Senior Indebtedness.
Amendments and Assignment
Except with respect to any changes which do not materially adversely
affect the rights of holders of the related Preferred Securities (in which case
no vote will be required), no Guarantee may be amended without the prior
approval of the holders of not less than a majority of the aggregate Liquidation
Amount of such outstanding Preferred Securities. The manner of obtaining any
such approval will be as set forth under "Description of the Preferred
Securities -- Voting Rights; Amendment of Trust Agreement." All guarantees and
agreements contained in each Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of CPL and shall inure to the benefit of
the holders of the related Preferred Securities then outstanding.
Events of Default
An event of default under each Guarantee will occur upon the failure of
CPL to perform any of its payment or other obligations thereunder. The holders
of not less than a majority in aggregate Liquidation Amount of the related
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the related Preferred Securities may institute a legal
proceeding directly against CPL to enforce its rights under such related
Guarantee without first instituting a legal proceeding against the Issuer Trust,
the Guarantee Trustee or any other person or entity.
CPL, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not CPL is in compliance with all the
conditions and covenants applicable to it under the Guarantees.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance
of a default by CPL in performance of any Guarantee, undertakes to perform only
such duties as are specifically set forth in each Guarantee and, after default
with respect to any Guarantee, must exercise the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her own
affairs. Notwithstanding this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by any Guarantee at the
request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
Termination of the Guarantees
Each Guarantee will terminate and be of no further force and effect
upon full payment of the Redemption Price of the related Preferred Securities,
upon full payment of the amounts payable upon liquidation of the related Issuer
Trust or upon distribution of Corresponding Junior Subordinated Debentures to
the holders of the related Preferred Securities. Each Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of the related Preferred Securities must restore payment of any sums paid
under such Preferred Securities or such Guarantee.
Governing Law
Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
The Expense Agreements
Pursuant to the related Agreement as to Expenses and Liabilities
entered into by CPL under each Trust Agreement (the "Expense Agreement"), CPL
will, as holder of the Common Securities, irrevocably and unconditionally
guarantee to each person or entity to whom the Issuer Trust becomes indebted or
liable, the full payment of any costs, expenses or liabilities of the Issuer
Trust, other than obligations of the Issuer Trust to pay to the holders of any
Preferred Securities or other similar interests in the Issuer Trust the amounts
due such holders pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be.
DESCRIPTION OF CORRESPONDING
JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures are to be issued in
one or more series under the Indenture with terms corresponding to the terms of
the related Preferred Securities. For a summary of certain terms and provisions
of Junior Subordinated Debentures that, except where noted, pertains in all
respects to the Corresponding Junior Subordinated Debentures, see "Description
of Junior Subordinated Debentures." This summary of certain terms and provisions
of, or relating to, Corresponding Junior Subordinated Debentures and the
Indenture does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, the Indenture, the form of which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
to the Trust Indenture Act. Whenever particular defined terms of the Indenture
(as supplemented or amended from time to time) are referred to herein or in a
Prospectus Supplement, such defined terms are incorporated herein or therein by
reference.
General
Concurrently with the issuance of each Issuer Trust's Preferred
Securities, such Issuer Trust will invest the proceeds thereof and the
consideration paid by CPL for the Common Securities in a series of Corresponding
Junior Subordinated Debentures issued by CPL to such Issuer Trust. Each series
of Corresponding Junior Subordinated Debentures will be in the principal amount
equal to the aggregate stated Liquidation Amount of the related Preferred
Securities plus CPL's concurrent investment in the Common Securities and will
rank pari passu with all other series of Junior Subordinated Debentures. The
Corresponding Junior Subordinated Debentures will be unsecured and subordinate
and junior in right of payment to the extent and in the manner set forth in the
Indenture to all Senior Indebtedness of CPL. See "Description of Junior
Subordinated Debentures--Subordination" and the Prospectus Supplement relating
to any offering of related Preferred Securities.
Optional Redemption
The applicable Prospectus Supplement will specify the period or periods
within which, the price or prices at which and the terms and conditions upon
which the Corresponding Junior Subordinated Debentures of any series may be
redeemed, in whole or in part, at the option of CPL. Except as otherwise set
forth in the applicable Prospectus Supplement, the redemption price for any
Corresponding Junior Subordinated Debentures so redeemed shall be equal to any
accrued and unpaid interest thereon to the date fixed for redemption, plus 100%
of the principal amount thereof. See "Description of Junior Subordinated
Debentures--Redemption."
If a Special Event in respect of an Issuer Trust shall occur and be
continuing, CPL may, at its option, redeem the Corresponding Junior Subordinated
Debentures at any time within 90 days of the occurrence of such Special Event,
in whole but not in part, subject to the provisions of the Indenture. The
redemption price for any Corresponding Junior Subordinated Debentures shall be
equal to 100% of the principal amount of such Corresponding Junior Subordinated
Debentures then outstanding plus accrued and unpaid interest to the date fixed
for redemption.
For so long as the applicable Issuer Trust is the holder of all the
outstanding series of Corresponding Junior Subordinated Debentures, the proceeds
of any such redemption will be used by the Issuer Trust to redeem the related
Preferred Securities in accordance with their terms. CPL may not redeem a series
of Corresponding Junior Subordinated Debentures in part unless all accrued and
unpaid interest has been paid in full on all outstanding Corresponding Junior
Subordinated Debentures of such series for all interest periods terminating on
or prior to the Redemption Date.
Certain Covenants of CPL
CPL will covenant in the applicable Supplemental Indenture as to each
series of Corresponding Junior Subordinated Debentures, that if and so long as
(i) the Issuer Trust of the corresponding series of Preferred Securities and
Common Securities is the holder of all such Corresponding Junior Subordinated
Debentures, (ii) a Tax Event in respect of such Issuer Trust has occurred and is
continuing and (iii) CPL has elected, and has not revoked such election, to pay
Additional Sums in respect of such Preferred Securities and Common Securities,
CPL will pay to such Issuer Trust such Additional Sums. CPL will also covenant,
as to each series of Corresponding Junior Subordinated Debentures, that it will
not, and will not permit any subsidiary of CPL to, (i) declare, set aside or pay
any dividend or distribution on, or repurchase, redeem or otherwise acquire, or
make any sinking fund payment for the purchase or redemption of, any shares of
its capital stock, including the Common Stock of CPL, or (ii) make any payment
of principal, interest or premium, if any, on or repay or repurchase or redeem
any debt securities (including other Corresponding Junior Subordinated
Debentures) that rank pari passu with or junior in interest to the Corresponding
Junior Subordinated Debentures or make any guarantee payments with respect to
the foregoing (other than (a) dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, (b)
conversions into or exchanges for shares of its capital stock, (c) redemptions,
purchases or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of CPL or any of its
subsidiaries and mandatory redemptions or sinking fund payments with respect to
any series of Preferred Stock of CPL that are subject to mandatory redemption or
sinking fund requirements, provided that the aggregate stated value of all such
series outstanding at the time of any such payment does not exceed five percent
of the aggregate of (1) the total principal amount of all bonds or other
securities representing secured indebtedness issued or assumed by CPL and then
outstanding and (2) the capital and surplus of CPL to be stated on the books of
account of CPL after giving effect to such payment, provided, however, that any
moneys deposited in any sinking fund and not in violation of this provision may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund without regard to the
restrictions contained in this provision, and (d) payments under any guarantee
by CPL with respect to any securities of a subsidiary of CPL, provided that the
proceeds from the issuance of such securities were used to purchase Junior
Subordinated Debentures of any series under the Indenture) if at such time (i)
there shall have occurred any event of which CPL has actual knowledge that (a)
with the giving of notice or the lapse of time, or both, would constitute a
"Debenture Event of Default" under the Indenture with respect to Corresponding
Junior Subordinated Debentures of such series and (b) in respect of which CPL
shall not have taken reasonable steps to cure, (ii) CPL shall be in default with
respect to its payment of any obligations under the related Guarantee or (iii)
CPL shall have given notice of its selection of an Extension Period as provided
in the Indenture with respect to Corresponding Junior Subordinated Debentures of
such series and shall not have rescinded such notice, or such Extension Period,
or any extension thereof, shall be continuing.
CPL will also covenant, as to each series of Corresponding Junior
Subordinated Debentures, (i) to maintain directly or indirectly 100% ownership
of the Common Securities of the Issuer Trust to which Corresponding Junior
Subordinated Debentures have been issued, provided that certain successors which
are permitted pursuant to the Indenture may succeed to CPL's ownership of the
Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate any
Issuer Trust, except (a) in connection with a distribution of Corresponding
Junior Subordinated Debentures to the holders of the Preferred Securities and
Common Securities in liquidation of such Issuer Trust or (b) in connection with
certain mergers, consolidations or amalgamations permitted by the related Trust
Agreement and (iii) to use its reasonable efforts, consistent with the terms and
provisions of the related Trust Agreement, to cause such Issuer Trust to remain
classified as a "grantor trust" and not to be classified as an association
taxable as a corporation for United States federal income tax purposes. CPL will
also make certain additional agreements relating to the Indenture as provided in
the last sentence of the first paragraph under "Description of Junior
Subordinated Debentures--Modification of Indenture."
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEES
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Subordinated Debentures, such payments will
be sufficient to cover Distributions and other payments due on the related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debentures will be equal to the
sum of the aggregate Liquidation Amount of the related Preferred Securities and
related Common Securities; (ii) the interest rate and interest and other payment
dates on each series of Corresponding Junior Subordinated Debentures will match
the Distribution rate and Distribution and other payment dates for the related
Preferred Securities; (iii) CPL shall pay for all and any costs, expenses and
liabilities of such Issuer Trust except the Issuer Trust's obligations to
holders of its Preferred Securities under such Preferred Securities; and (iv)
each Trust Agreement further provides that the Issuer Trust will not engage in
any activity that is not consistent with the limited purposes of such Issuer
Trust.
Payments of Distributions and other amounts due on the Preferred
Securities (to the extent the Issuer Trust has funds available for the payment
of such Distributions) are irrevocably guaranteed by CPL as and to the extent
set forth under "Description of Guarantees." Taken together, CPL's obligations
under each series of Corresponding Junior Subordinated Debentures, the
Indenture, the related Trust Agreement, the related Expense Agreement, and the
related Guarantee provide a full, irrevocable and unconditional guarantee of
payments of distributions and other amounts due on the related series of
Preferred Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer Trust's obligations under the Preferred Securities. If and to the extent
that CPL does not make payments on any series of Corresponding Junior
Subordinated Debentures, such Issuer Trust will not pay Distributions or other
amounts due on related Preferred Securities. The Guarantees do not cover payment
of Distributions when the related Issuer Trust does not have sufficient funds to
pay such Distributions. In such event, the remedies of a holder of a series of
Preferred Securities are as described above under "Description of Junior
Subordinated Debentures--Debenture Events of Default," "Description of Preferred
Securities--Events of Default; Notice" and "--Enforcement of Certain Rights by
Holders of Preferred Securities." The obligations of CPL under each Guarantee
are subordinate and junior in right of payment to all Senior Indebtedness of
CPL.
Notwithstanding anything to the contrary in the Indenture, CPL has the
right to set off any payment it is otherwise required to make thereunder with
and to the extent CPL has theretofore made, or is concurrently on the date of
such payment making, a payment under the related Guarantee.
A holder of any related Preferred Security may institute a legal
proceeding directly against CPL to enforce its rights under the related
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the related Issuer Trust or any other person or entity.
Each Issuer Trust's Preferred Securities evidence a beneficial interest
in such Issuer Trust, and each Issuer Trust exists for the sole purpose of
issuing its Preferred Securities and Common Securities and investing the
proceeds thereof in Corresponding Junior Subordinated Debentures. A principal
difference between the rights of a holder of a Preferred Security and the rights
of a holder of a Corresponding Junior Subordinated Debenture is that a holder of
a Corresponding Junior Subordinated Debenture is entitled to receive from CPL
the principal amount of and interest accrued on Corresponding Junior
Subordinated Debentures held, while a holder of Preferred Securities is entitled
to receive Distributions from such Issuer Trust (or from CPL under the
applicable Guarantee) if and to the extent such Issuer Trust has funds available
for the payment of such Distributions.
Upon any voluntary or involuntary termination, winding-up or
liquidation of any Issuer Trust involving the liquidation of the Corresponding
Junior Subordinated Debentures, the holders of the related Preferred Securities
will be entitled to receive, out of assets held by such Issuer Trust and after
satisfaction of liabilities to creditors of such Issuer Trust as provided by
applicable law, the Liquidation Distribution in cash. See "Description of
Preferred Securities--Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of CPL, the Property Trustee,
as holder of the Corresponding Junior Subordinated Debentures, would be a
subordinated creditor of CPL, subordinated in right of payment to all Senior
Indebtedness, but entitled to receive payment in full of principal and interest,
before any shareholders of CPL receive payments or distributions. Since CPL is
the guarantor under each Guarantee and has agreed to pay for all costs, expenses
and liabilities of each Issuer Trust (other than the Issuer Trust's obligations
to the holders of its Preferred Securities), the positions of a holder of such
Preferred Securities and a holder of such Corresponding Junior Subordinated
Debentures relative to other creditors and to shareholders of CPL in the event
of liquidation or bankruptcy of CPL would be substantially the same.
A default or event of default under any Senior Indebtedness of CPL will
not constitute a default or Event of Default under the Indenture. However, in
the event of payment defaults under, or acceleration of, Senior Indebtedness of
CPL, the subordination provisions of the Indenture provide that no payments may
be made in respect of the Corresponding Junior Subordinated Debentures until
such Senior Indebtedness has been paid in full or any payment default thereunder
has been cured or waived. Failure to make required payments on any series of
Corresponding Junior Subordinated Debentures would constitute a Debenture Event
of Default under the Indenture with respect to such series.
PLAN OF DISTRIBUTION
CPL may sell any series of the Junior Subordinated Debentures, and each
Issuer Trust may sell any series of Preferred Securities, through underwriters,
dealers or agents, or directly to one or more purchasers. The Prospectus
Supplement with respect to the securities offered thereby will set forth the
terms of the offering of such Offered Securities, including the name or names of
any underwriters, dealers or agents, the purchase price of such Offered
Securities and the proceeds to CPL or the Issuer Trust, as the case may be, from
such sale, any underwriting discounts and other items constituting underwriters'
or agents' compensation, any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers.
If underwriters are involved in the sale of any Offered Securities,
such Offered Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The underwriter or underwriters
with respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover page of such Prospectus Supplement. Unless otherwise set
forth in such Prospectus Supplement, the obligations of the underwriters to
purchase the Offered Securities will be subject to certain conditions precedent,
and the underwriters will be obligated to purchase all such Offered Securities
if any are purchased.
If a dealer is used in the sale of any Offered Securities, CPL will
sell such Offered Securities to the dealer, as principal. The dealer may then
resell such Offered Securities to the public at varying prices to be determined
by such dealer at the time of resale. The name of any dealer involved in a
particular offering of Offered Securities and any discounts or concessions
allowed or reallowed or paid to the dealer will be set forth in the Prospectus
Supplement relating to such offering.
The Offered Securities may be sold directly by CPL or through agents
designated by CPL from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the offer
or sale of any of the Offered Securities will be named, and any commissions
payable by CPL to such agent will be set forth, in the Prospectus Supplement
relating to such offer or sale. Unless otherwise indicated in such Prospectus
Supplement, any such agent will be acting on a reasonable best efforts basis for
the period of its appointment.
Certain of the underwriters, dealers or agents and their associates may
be customers of, engage in the transactions with or perform services for CPL
and/or the applicable Issuer Trust and/or any of their respective affiliates in
the ordinary course of business.
CPL will indicate in a Prospectus Supplement the extent to which it
anticipates that a secondary market for the Offered Securities will be
available.
Underwriters, dealers and agents participating in the distribution of
the Offered Securities may be deemed to be "underwriters" within the meaning of,
and any discounts and commissions received by them and any profit realized by
them on resale of such Offered Securities may be deemed to be underwriting
discounts and commissions under, the Securities Act. Subject to certain
conditions, CPL and the applicable Issuer Trustee may agree to indemnify the
several underwriters, dealers or agents and their controlling persons against
certain civil liabilities, including certain liabilities under the Securities
Act, or to contribute to payments any such person may be required to make in
respect thereof.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement,
certain legal matters in connection with the Offered Securities, including the
validity of the Junior Subordinated Debentures, the Indenture and the
Guarantees, will be passed upon for CPL and each Issuer Trust by Milbank, Tweed,
Hadley & McCloy, New York, New York, and for the underwriters by Sidley &
Austin, Chicago, Illinois. Sidley & Austin has from time to time represented CSW
and certain of its affiliates, including CPL, in connection with certain
matters. All matters of Texas law will be passed upon by Vinson & Elkins L.L.P.,
Dallas, Texas. Certain matters of Delaware law relating to the validity of the
Preferred Securities, the enforceability of each Trust Agreement and the
creation of each Issuer Trust will be passed upon by Richards, Layton & Finger,
P.A., as special Delaware counsel to CPL and the Issuer Trusts. Certain tax
matters in connection with the Preferred Securities will be passed upon for CPL
and each Issuer Trust by Christy & Viener, New York, New York.
EXPERTS
The financial statements and schedules incorporated in this Prospectus
by reference from CPL's Annual Report on Form 10-K have been audited by Arthur
Andersen LLP, independent public accountants, as stated in their reports, which
are incorporated herein by reference and have been so incorporated herein in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
<PAGE>
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No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus Supplement or the
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized. This Prospectus Supplement and the
Prospectus do not constitute an offer to sell or the solicitation of an offer to
buy any securities other than the securities described in this Prospectus
Supplement and the Prospectus or any offer to sell or the solicitation of an
offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful. Neither the delivery of this Prospectus Supplement and
the Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of CPL since
the date hereof or that the information contained herein or therein is correct
as of any time subsequent to its date.
TABLE OF CONTENTS
Prospectus Supplement
Page
Risk Factors............................................S-5
CPL Capital I...........................................S-8
Central Power and Light Company.........................S-9
Use of Proceeds.........................................S-9
Consolidated Ratios of Earnings to Fixed
Charges and Earnings to Combined Fixed
Charges and Preferred Stock Dividend
Requirements.........................................S-10
Selected Financial Information.........................S-10
Accounting Treatment...................................S-11
Certain Terms of the Series A Preferred
Securities...........................................S-11
Certain Terms of the Series A Debentures...............S-13
ERISA Considerations...................................S-16
Certain Federal Income Tax Considerations..............S-18
Underwriting...........................................S-21
Legal Opinions.........................................S-22
Prospectus
Available Information................................. 2
Incorporation of Certain Documents by
Reference........................................... 2
Central Power and Light Company....................... 4
The Issuer Trusts..................................... 4
Use of Proceeds....................................... 5
Consolidated Ratios of Earnings to Fixed
Charges and Earnings to Combined Fixed Charges
and Preferred Stock Dividend Requirements........... 5
Description of Junior Subordinated Debentures......... 6
Description of Preferred Securities................... 19
Description of Guarantees............................. 35
Description of Corresponding Junior
Subordinated Debentures............................ 38
Relationship Among the Preferred Securities,
the Corresponding Junior Subordinated
Debentures and the Guarantees...................... 41
Plan of Distribution.................................. 43
Legal Opinions........................................ 44
Experts............................................... 44
6,000,000
Preferred Securities
CPL Capital I
% Cumulative Quarterly
Income Preferred Securities,
Series A (QUIPSSM)
<PAGE>
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guaranteed, as described herein, by
[LOGO] CENTRAL POWER AND LIGHT COMPANY
--------------------
Prospectus Supplement
--------------------
Goldman, Sachs & Co.
Lehman Brothers
Merrill Lynch & Co.
Smith Barney Inc.
Representatives of the Underwriters
<PAGE>
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<PAGE>
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II-9
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Registration fee...................................... $ 45,455
*Public Utility Holding Company Act filing fee......... 2,000
*Counsel fees.......................................... 80,000
*Accountants' fees..................................... 8,000
*Stock exchange listing fees........................... 51,300
*Trustee fees.......................................... 10,000
*Rating agency fees.................................... 30,000
*Blue sky expenses..................................... 1,250
*Printing and delivery of registration statement,
prospectus, certificates, etc....................... 20,000
*Expenses of Central and South West Services, Inc...... 3,000
*Miscellaneous expenses................................ 4,689
-------
Total............................................. $255,694
========
- -------------------
* Estimated
Item 15. Indemnification of Directors and Officers.
Article 2.02 of the Texas Business Corporation Act provides broadly for
indemnification of directors and officers against claims and liabilities against
them in their capacities as such. CPL's bylaws also provide for the
indemnification of officers and directors by CPL. In addition, CPL has purchased
Directors' and Officers' Liability and Company Reimbursement Liability Insurance
which, in certain circumstances, provide for payments to the directors and
officers of CPL, in the event of such liabilities.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
A list of exhibits included as part of this Registration
Statement is set forth in an Exhibit Index, which immediately
precedes such exhibits.
(b) Financial Statement Schedules
None.
Item 17. Undertakings.
(a) Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; provided, however, that any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) That, for purposes of determining liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) To provide to the underwriters at the closing specified in
the underwriting agreements certificates in such denominations and
registered in such names as required by the underwriter to permit
prompt delivery to each purchaser.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the provisions described under Item 15,
or otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrants in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, CPL
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Corpus Christi, State of Texas, on February 5, 1997.
CENTRAL POWER AND LIGHT COMPANY
By: /s/ WENDY G. HARGUS
Wendy G. Hargus
Treasurer
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes and
appoints Wendy G. Hargus and Stephen D. Wise or either of them, as his or her
attorney-in-fact, with full power of substitution and resubstitution to sign and
file on his or her behalf individually and in each such capacity stated below
any and all amendments and post-effective amendments to this Registration
Statement and any registration statement of CPL relating to the Preferred
Securities, Junior Subordinated Debentures (including Corresponding Junior
Subordinated Debentures) or Guarantees filed after the date hereof pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, as fully as such
person could in person, hereby verifying and confirming all that said
attorney-in-fact, or either of them, or their or his substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on February 5, 1997.
Signature Title
/s/M. Bruce Evans President (principal executive officer);
M. Bruce Evans Director
/s/Wendy G. Hargus Treasurer (principal financial officer)
Wendy G. Hargus
/s/R. Russell Davis Controller and Chief Accounting Officer
R. Russell Davis (principal accounting officer)
Director
John R. Brimberry
/s/E.R. Brooks Director
E.R. Brooks
/s/Glenn Files Director
Glenn Files
<PAGE>
Director
Ruben M. Garcia
/s/Robert A. McAllen Director
Robert A. McAllen
/s/Pete J. Morales, Jr. Director
Pete J. Morales, Jr.
/s/S. Loyd Neal, Jr. Director
S. Loyd Neal, Jr.
/s/H. Lee Richards Director
H. Lee Richards
/s/Gonzalo Sandoval Director
Gonzalo Sandoval
/s/Gerald E. Vaughn Director
Gerald E. Vaughn
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, CPL Capital
I certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on February 5, 1997.
CPL CAPITAL I
By/s/Wendy G. Hargus
Wendy G. Hargus, as Administrative Trustee
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, CPL Capital
II certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on February 5, 1997.
CPL CAPITAL II
By/s/Wendy G. Hargus
Wendy G. Hargus, as Administrative Trustee
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
No. Description Page
1(a) Form of Underwriting Agreement relating to Junior Subordinated
Debentures not issued in connection with Preferred Securities.
1(b) Form of Underwriting Agreement to be used in connection with the
issuance of Preferred Securities.
4(a) Form of Indenture between CPL and The Bank of New York, as Trustee, to
be used in connection with the issuance of the Junior Subordinated
Debentures and Corresponding Junior Subordinated Debentures.
4(b) Form of Supplemental Indenture to Indenture to be used in connection
with the issuance of Junior Subordinated Debentures (other than
Corresponding Junior Subordinated Debentures).
4(c) Form of Supplemental Indenture to Indenture to be used in connection
with the issuance of Corresponding Junior Subordinated Debentures and
Preferred Securities.
4(d) Form of Junior Subordinated Debenture (included in Exhibit 4(c) above).
4(e) Certificate of Trust of CPL Capital I (Certificate for CPL Capital II
will be substantially identical except for names and dates).
4(f) Trust Agreement of CPL Capital I (Trust Agreement for CPL Capital II
will be substantially identical except for names and dates).
4(g) Form of Amended and Restated Trust Agreement (Agreements for CPL
Capital I and CPL Capital II are substantially identical except for
names and dates).
4(h) Form of Preferred Security Certificate for CPL Capital I and CPL
Capital II. (included in Exhibit 4(g) above).
4(i) Form of Guarantee Agreement (Agreements for CPL Capital I and CPL
Capital II are substantially identical except for names and dates).
5(a) Opinion of Milbank, Tweed, Hadley & McCloy with respect to the Junior
Subordinated Debentures and Guarantees.
5(b) Opinion of Richards, Layton & Finger, special Delaware counsel, with
respect to the Preferred Securities of CPL Capital I.
5(c) Opinion of Richards, Layton & Finger, special Delaware counsel, with
respect to the Preferred Securities of CPL Capital II.
5(d) Opinion of Vinson & Elkins L.L.P. with respect to the Junior
Subordinated Debentures and Guarantees.
8 Opinion of Christy & Viener with respect to United States Federal
Income Tax Matters.
*12(a) Statements re Computation of Ratios of Earnings to Fixed Charges
(Exhibit 12.1, Form 10-K for the Year ended December 31, 1995 and
Exhibit 12.1, Form 10-Q for the Quarter ended September 30, 1996).
12(b) Statements re Computation of Ratios of Earnings to Combined Fixed
Changes and Preferred Stock Dividend Requirements.
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of Milbank, Tweed, Hadley & McCloy (included in Exhibit 5(a)
above).
23(c) Consents of Richards, Layton & Finger (included in Exhibits 5(b) and 5
(c) above).
23(d) Consent of Christy & Viener (included in Exhibit 8 above).
23(e) Consent of Vinson & Elkins L.L.P. (included in Exhibit 5(d) above).
24 Powers of Attorney (included on page II-3 of Registration Statement).
25(a) Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Indenture
between CPL and The Bank of New York.
25(b) Statement of Eligibility under the Trust Indenture Act of 1939 of The
Bank of New York, as Guarantee Trustee for the Guarantee for CPL Capital
I.
25(c) Statement of Eligibility under the Trust Indenture Act of 1939 of The
Bank of New York, as Property Trustee for the Amended and Restated
Trust Agreement of CPL Capital I.
25(d) Statement of Eligibility under the Trust Indenture Act of 1939 of The
Bank of New York, as Guarantee Trustee for the Guarantee for CPL Capital
II.
25(e) Statement of Eligibility under the Trust Indenture Act of 1939 of The
Bank of New York, as Property Trustee for the Amended and Restated
Trust Agreement of CPL Capital II.
- ------------------
* Incorporated by reference.
Exhibit 1(a)
Central Power and Light Company
Junior Subordinated Debentures
- -------------------------------------------------------------------------------
Underwriting Agreement
, 1997
Goldman, Sachs & Co.,
[Names of Co-Representatives,]
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
From time to time Central Power and Light Company, a Texas corporation (the
"Company"), 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 Company's Junior Subordinated Deferrable
Interest Debentures (the "Securities"), to be issued pursuant to an Indenture
(the "Indenture") between the Company and The Bank of New York, as trustee, as
heretofore supplemented and amended, including by the supplemental indenture
relating to the Designated Securities (as hereinafter defined). The Securities
specified in Schedule II to such Pricing Agreement are referred to as the
"Designated Securities" with respect to such Pricing Agreement.
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the Indenture.
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 Company 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 Company 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 principal amount of such
Designated Securities, the initial public offering price of such 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 and the principal amount of
such Designated Securities to be purchased by each Underwriter and shall set
forth the date, time and manner of delivery of such Designated Securities, and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and 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. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333- ) (the
"Initial Registration Statement") in respect of the Securities,
including a prospectus relating to the 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 Company, 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
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 Company 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 Company
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 (as defined in the Registration Statement) and any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company 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 Company and its subsidiaries, taken as a whole, or
(ii) adverse development concerning the business or assets of the
Company 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 Company 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 Company 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 Company and its subsidiaries, taken as a
whole.
(f) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable.
(g) The Company 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.
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
(i) The Securities have been duly and validly authorized by the
Company, and, when executed, authenticated and delivered in accordance
with the Indenture and pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Securities, such Designated
Securities will be duly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture; the
Indenture has been duly and validly authorized and duly qualified under
the Trust Indenture Act and, at the Time of Delivery (as defined in
Section 4 hereof) for such Designated Securities, the Indenture will
constitute a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and 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.
(j) 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 Company, threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of
the Company 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.
(k) The Company (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 it under applicable Environmental Laws to conduct its
business 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 Company and its
subsidiaries, taken as a whole.
(l) 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 Company authorizing, 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 Goldman, Sachs & Co. on behalf of the Representatives.
(m) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture,
this Agreement and any Pricing 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 Company is a party or by which the
Company is bound or to which any of the property or assets of the
Company is subject, nor will such action result in any violation of the
provisions of the Restated Articles of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties; and no consent, approval, authorization, order,
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 or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement or the
Indenture, except such as have been, or will have been prior to the
Time of Delivery, obtained under the Act, the Exchange Act and 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
and distribution of the Securities by the Underwriters.
(n) The Company is not 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.
(o) The Company is not, and after giving effect to the offering and
sale of the Securities, will not 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").
(p) There are no contracts, agreements or understandings between
the Company and any person that grant such person the right to require
the Company to file a registration statement under the Act with respect
to any capital stock of the Company owned or to be owned by such person
or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement.
(q) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its 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. 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 Company, shall be delivered by or on behalf of the Company 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
Company as specified in such Pricing Agreement, all in the manner and at the
place and time and date as the Representatives and the Company may agree upon in
writing, such time and date being herein called the "Time of Delivery".
5. The Company agrees with each of the Underwriters of any
Designated Securities:
(a) To prepare the Prospectus as amended or 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 Company 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 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
the Company shall not be required to qualify as a foreign corporation
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 opinion of counsel for the Company, 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 opinion of counsel for the Company, 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 opinion of counsel for the Company, with the Act, the
Exchange Act or the Trust Indenture 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 Company 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 Company, 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 debt securities of the Company which mature more than
one year after such Time of Delivery, that are substantially similar to
the Designated Securities, without the prior consent of the
Representatives; and
(f) If the Company elects 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 Company 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 Company's counsel and accountants in connection with the
registration of the 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 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, any Blue Sky Memorandum
and any other documents in connection with the offering, purchase, sale and
delivery of the Securities; (iii) all expenses in connection with the
qualification of the 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 of qualifying the Securities with The Depository Trust
Company; (vi) the cost of preparing the Securities; (vii) all reasonable fees
and expenses of any trustee and its counsel; and (viii) the cost of preparing
certificates for the Securities. 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 Company 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 Company shall have
performed all of its 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 Company has 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 Company 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 Company; 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 Securities; 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) Vinson & Elkins L.L.P., special Texas counsel for the Company,
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 Company 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) 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 (e) 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;
(f) The Indenture shall have been executed and delivered, in
a form reasonably satisfactory to the Representatives;
(g) 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 Company and its subsidiaries, taken as a whole, or
(ii) any adverse development concerning the business or assets of the
Company 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 Company 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);
(h) 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 Company'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;
(i) 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 Company'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; and
(j) The Company shall have furnished or caused to be furnished to
the Representatives at each Time of Delivery for Designated Securities
certificates of officers of the Company satisfactory to the
Representatives, as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder
to be performed at or prior to such Time of Delivery, as to the matters
set forth in subsections (a) and (e) of this Section and as to such
other matters as the Representatives may reasonably request.
8. (a) The Company agrees 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
Company 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
Company 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 Company (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 Company, each of its officers who signs the
Registration Statement, each of its directors, each person who controls the
Company 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 Company 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 Company
(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 Company
agrees 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 Company 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 Company if the Company 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
Company 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 Company 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 Company 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 Company, their directors or officers or any person
controlling the Company 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 Company
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 Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company 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 Company agrees 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 Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount 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
principal amount 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 Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company 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 or the Company, except for the expenses to be borne by the Company
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 Company 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 Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not 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 Company to
comply with the terms or to fulfill any of the conditions of the Pricing
Agreement (excluding those conditions set forth in Section 7(i) hereof), or if
for any reason the Company shall be unable to perform its obligations under the
Pricing Agreement, the Company 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. The Company shall not 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 Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company 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 Company 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 Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company 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 ____ counterparts hereof.
Very truly yours,
Central Power and Light Company
By: ...........................................
-----------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Names of Co-Representatives]
By: _______________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ANNEX 1
ANNEX I
Pricing Agreement
Goldman, Sachs & Co.,
[Names of Co-Representative(s)],
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004
........... , 1997
Ladies and Gentlemen:
Central Power and Light Company, a Texas corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated __________, 1997 (the "Underwriting Agreement"),
between the Company on the one hand and Goldman, Sachs & Co. [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.
<PAGE>
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount 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______ 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 Company. 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 Company for examination, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
Central Power and Light Company
By: ...........................................
-------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
By: _____________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Principal
Amount of
Designated
Securities
to be
Underwriter Purchased
Goldman, Sachs & Co. $
[Name(s) of Co-Representative(s)]
[Names of other Underwriters]
Total $
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] Junior Subordinated Deferrable Interest
Debentures due ,
Aggregate principal amount:
[$]
Price to Public:
% of the principal amount of the Designated Securities, plus
accrued interest[, if any,] from to [and accrued
amortization[, if any,] from to ]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization[,if any,] from
to ]
Form of Designated Securities:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the
Representatives]]
[Book-entry only form represented by one or more global
securities deposited with The Depository Trust Company ("DTC") or its
designated custodian for trading in the Same Day Funds Settlement System
of DTC, and to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
Specified Funds for Payment of Purchase Price:
[Federal (same day) Funds [by wire transfer]]
[Describe any blackout provisions with respect to the Designated
Securities]
Time of Delivery:
a.m. (New York City time), , 19
Indenture:
Indenture dated , 19 , between the Company and
, as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates, commencing ....................., 19..]
Extension of Interest Payment Period:
[No provisions for extension]
[The Company has the right, [at any time] during the term of the
Designated Securities, to extend any interest payment period of such Designated
Securities [at any time and from time to time] for a period not to exceed [ ]
and not to extend beyond the Maturity Date]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of [$ ] or an integral multiple thereof,
[on or after , at the following redemption prices (expressed in
percentages of principal amount). If [redeemed on or before , %, and
if] redeemed during the 12-month period beginning ,
Redemption
Year Price
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
<PAGE>
[on any interest payment date falling on or after , , at the election of
the Company, at a redemption price equal to the principal amount thereof,
plus accrued interest to the date of redemption.]]
<PAGE>
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
<PAGE>
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund
to retire [$ ] principal amount of Designated Securities on in each of
the years through
at 100% of their principal amount plus accrued interest[, together
with [cumulative] [noncumulative] redemptions at the option of the
Company to retire an additional [$ ] principal amount of Designated
Securities in the years through at 100% of their principal amount plus
accrued interest.]
[If Designated Securities are extendable debt securities, insert--
Extendable provisions:
Designated Securities are repayable on , [insert date and years], at the
option of the holder, at their principal amount with accrued interest.
The initial annual interest rate will be %, and thereafter the annual
interest rate will be adjusted on , and to a rate not less than
% of the effective annual interest rate on U.S. Treasury obligations
with -year maturities as of the [insert date 15 days prior to
maturity date] prior to such [insert maturity date].]
[If Designated Securities are floating rate debt securities, insert--
Floating rate provisions:
Initial annual interest rate will be % through [and thereafter will be
adjusted [monthly] [on each , , and ] [to an annual rate of % above the
average rate for -year [month] [securities][certificates of deposit]
issued by
and [insert names of banks].] [and the annual interest rate
[thereafter] [from through ] will be the interest yield equivalent
of the weekly average per annum market
discount rate for -month Treasury bills plus % of Interest Differential
(the excess, if any, of (i) the then current weekly average per annum
secondary market yield for -month certificates of deposit over (ii) the
then current interest yield equivalent of the weekly average per annum
market discount rate for -month Treasury bills); [from and thereafter the
rate will be the then current interest yield equivalent plus % of
Interest Differential].]
Defeasance provisions:
Closing location for delivery of Designated Securities:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Additional Closing Conditions:
Paragraph 7(g) of the Underwriting Agreement should be modified in the
event that the Securities are denominated in or indexed to, a currency
other than the U.S. dollar, more than one currency or in a composite
currency. The country or countries issuing such currency should be added to
the banking moratorium and hostilities clauses and the following additional
clause should be added to the paragraph (the entire paragraph should be
restated, as amended):
"; ( ) the imposition of the proposal of exchange controls by any
governmental authority in [insert the country or countries issuing such
currency, currencies or composite currency]".
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]* :
- --------------
* A description of particular tax, accounting or other unusual features (such as
the addition of event risk provisions of the Designated Securities should be set
forth, or referenced to an attached and accompanying description, if necessary,
to ensure agreement as to the terms of the Designated Securities to be purchased
and sold. Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.
<PAGE>
ANNEX III
Form of letter of Arthur Andersen LLP
to be delivered pursuant to Section 7(d)
Pursuant to Section 7(d) 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 Company 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 Company 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 Company'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 Company 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;
<PAGE>
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company'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 Company'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 Company and its subsidiaries, inspection of the minute books
of the Company 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 Company 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 Company'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 Company'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 Company'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 Company'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 Company 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 Company 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 Company
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.
<PAGE>
Exhibit 1(b)
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
, 1997
Goldman, Sachs & Co.,
[Names of Co-Representatives]
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- ) (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 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 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) 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);
(i) 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;
(j) 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;
(k) 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
(l) 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 (h) 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.
If the foregoing is in accordance with your understanding, please
sign and return to us __________ 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.
[Names of Co-Representatives]
By:
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
ANNEX I
Pricing Agreement
Goldman, Sachs & Co.,
[Names of Co-Representative(s),]
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 ________, 1997
(the "Underwriting Agreement"), among the Trust and the Guarantor on the one
hand and Goldman, Sachs & Co. [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.
If the foregoing is in accordance with your understanding, please
sign and return to us _________ 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.
[Name(s) of Co-Representative(s)]
By:
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE I
Underwriter Number of
Designated Securities
to be Purchased
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
[Names of other Underwriters]
Total
SCHEDULE II
Title of Designated Securities:
Number of Designated Securities:
Initial Offering Price to Public:
[$___ per Preferred Security] [formula]
Purchase Price by Underwriters:
[$____ per Preferred Security][Formula]
[Commission Payable to Underwriters:
$_________ per Preferred Security in Federal (same day) Funds [by wire
transfer]]
Form of Designated Shares:
[Definitive form, to be made available for checking [and packaging] at least
twenty-four hours prior to the Time of Delivery at the office of [The Depository
Trust Company or its designated custodian] [the Representatives]]
[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]]
[Describe any blackout provisions with respect to the Designated Securities]
Time of Delivery:
____ a.m. (New York City time), _________, 19___
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.:
[Other Terms]*:
__________________________
* A description of particular tax, accounting or other unusual features
(including any event risk provisions) of the Designated Securities should be set
forth, or referenced to an attached or accompanying description, if necessary,
to ensure agreement as to the terms of the Designated Securities to be purchased
and sold. Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.
ANNEX II(a)
Form of Opinion of Sidley & Austin
Goldman, Sachs & Co.
[Names of Co-Representatives]
c/o Go dman, Sachs & Co.
as Representatives of the Several Underwriters
85 Broad Street
New York, New York 10004
Re: CPL Capital I % Cumulative Quarterly
Income Preferred Securities, Series
Dear Ladies and Gentlemen:
We address this opinion to you individually and as
Representatives of the Underwriters (the "Underwriters") named in Schedule I to
the Pricing Agreement dated _________, 1997 (the "Pricing Agreement") among you,
as such Representatives, Central Power and Light Company, a Texas corporation
(the "Guarantor"), and CPL Capital I, a statutory business trust organized under
the Business Trust Act of the State of Delaware (the "Trust" and, together with
the Guarantor, the "Offerors"), with respect to the issuance and sale pursuant
thereto and to the Underwriting Agreement dated [ ] _________, 1997 (together
with the Pricing Agreement, the "Underwriting Agreement"), among you, as such
Representatives, and the Offerors of $___________ in aggregate liquidation
amount of the ____% Cumulative Quarterly Income Preferred Securities, Series
[__] ($25 liquidation preference per security), of the Trust (the "Securities").
The Securities are being issued under the Amended and Restated Trust Agreement
dated as of ________, 1997 (the "Trust Agreement") among the Guarantor, The Bank
of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, and the Administrative Trustees named therein. Capitalized terms not
defined herein have the meanings specified in the Underwriting Agreement.
As counsel for the Underwriters, we have, among other things,
participated with officers and representatives of the Guarantor, including its
counsel and independent public accountants, and representatives of the
Underwriters in the preparation of the Offerors' Registration Statement on Form
S-3 (Registration No. 333- ________), filed on ________, 1997 with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), which registration statement became effective
on __________, 1997. Such registration statement at the time it became effective
(including all documents incorporated by reference therein pursuant to Item 12
of Form S-3 at the date hereof (the "Incorporated Documents")), is hereinafter
called the "Registration Statement." The Offerors' Prospectus Supplement dated
__________, 1997, which was filed with the Commission
<PAGE>
on ________, 1997, together with the Prospectus dated _________, 1997 (including
the Incorporated Documents) included in the Registration Statement, are
hereinafter collectively called the "Prospectus."
Pursuant to Section 7(b) of the Underwriting Agreement, this
will advise you that in the opinion of the undersigned, as counsel for the
Underwriters:
1. The Guarantor has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Texas.
2. Each of the Underwriting Agreement and the Pricing Agreement
has been duly authorized, executed and delivered by the Guarantor and by the
Guarantor as Depositor on behalf of the Trust;
3. The Indenture and the [First] Supplemental Indenture dated
as of ________, 1997 and as of _________, 1997, respectively (collectively the
"Indenture"), between the Guarantor and The Bank of New York, as trustee (the
"Indenture Trustee"), under which $________ aggregate principal amount of the
Guarantor's __% Junior Subordinated Deferrable Interest Debentures, Series ___
(the "Subordinated Debentures") are being issued on the date hereof, have been
duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
4. The Indenture has been duly authorized, executed and
delivered by the Guarantor and, assuming the Indenture has been duly authorized,
executed and delivered by the Indenture Trustee, constitutes the legal, valid
and binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms; and the Indenture conforms in all material respects
to the description thereof contained in the Prospectus;
5. The Guarantee Agreement dated as of ______, 1997 (the
"Guarantee") between the Guarantor and The Bank of New York, as trustee (the
"Guarantee Trustee"), has been duly qualified under the Trust Indenture Act.
6. The Guarantee has been duly authorized, executed and
delivered by the Guarantor and, assuming the Guarantee has been duly authorized,
executed and delivered by the Guarantee Trustee, constitutes the legal, valid
and binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms; and the Guarantee conforms in all material respects
to the description thereof contained in the Prospectus.
7. The Subordinated Debentures have been duly authorized,
executed and delivered by the Guarantor and, when authenticated, issued and
delivered as specified in or pursuant to the Indenture against payment of the
agreed consideration therefor as provided in __________, will constitute valid
and legally binding obligations of the Guarantor enforceable against the
Guarantor in accordance with their respective terms and will be entitled to the
benefits provided by the Indenture; and the Subordinated
<PAGE>
Debentures conform in all material respects to the description thereof contained
in the Prospectus.
8. The Securities conform in all material respects to the
description thereof contained in the Prospectus and are entitled to the benefits
provided by the Trust Agreement.
9. The statements contained in the Prospectus under the
captions "Description of the Preferred Securities," "Description of the
Guarantees," "Description of the Debentures," "Certain Terms of the Series __
Preferred Securities," "Certain Terms of the Series __ Guarantee," "Certain
Terms of the Series __ Debentures" and "Relationship Among the Preferred
Securities, the Debentures and the Guarantees," insofar as such statements
purport to constitute a summary of the terms of the securities therein
described, fairly summarize the terms of such securities.
10. The statements set forth in the Prospectus under the
captions "Underwriting" and "Plan of Distribution," insofar as they purport to
describe the provisions of the laws or documents referred to therein, fairly
summarize the terms of such provisions.
11. The Registration Statement has become effective under the
Act; and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose are
pending or threatened under the Act.
12. The Registration Statement, as of its effective date, and
the Prospectus, as of its issue date and the date hereof (except, in each case,
for the financial statements, financial data and supporting schedules included
or incorporated by reference therein and for the Specified Information, as to
none of which we express any opinion), complied and complies as to form in all
material respects with the Act and the rules and regulations of the Commission
promulgated thereunder. The term "Specified Information" means the following
information which has been included or incorporated by reference in the
Registration Statement and the Prospectus: _____________________.
13. The Trust is not an "investment company" or an
entity "controlled" by an "investment company" required to be registered under
the 1940 Act.
14. The order of the Commission dated ________, 1997, in File
No. ________, issued under the Public Utility Holding Company Act of 1935, as
amended, relating, among other things, to the creation of the Trust, the
issuance and sale of the Securities by the Trust, the issuance and sale of the
Subordinated Debentures by the Guarantor and the execution, delivery and
performance of the Guarantee (being the order of the Commission referred to in
subsection (s) of Section 2 of the Underwriting Agreement) has been entered and,
to our knowledge, is still in full force and effect. Except for the
effectiveness of the Registration Statement, no other approval, authorization,
consent, certificate or order of any commission or regulatory authority of the
United States of America is necessary with respect to the issuance and sale of
the
<PAGE>
Registered Securities by the Offerors as contemplated by the Underwriting
Agreement and the Prospectus.
In the course of the preparation of the Registration Statement
and the Prospectus, we have considered the information set forth therein in
light of the matters required to be set forth therein, and, as noted above, we
have participated in conferences with officers and representatives of the
Guarantor, including its counsel and independent public accountants, and your
representatives, during the course of which the contents of the Registration
Statement and the Prospectus and related matters were discussed. We have not
independently checked the accuracy or completeness of, or otherwise verified,
and, accordingly, are not passing upon, and do not assume responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus; and we have relied as to materiality,
to the extent we may properly do so in the discharge of our professional
responsibilities, upon the judgment of officers and representatives of the
Guarantor. However, as a result of such consideration and participation, nothing
has come to our attention which causes us to believe that the Registration
Statement (other than the financial statements, financial data and supporting
schedules included or incorporated by reference therein and the Specified
Information, as to which we express no belief), at the time it became effective,
contained any 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 or that the Prospectus (other than the financial statements,
financial data and supporting schedules included or incorporated by reference
therein and the Specified Information, as to which we express no belief), at the
time the Registration Statement became effective and at the date hereof,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
For the purpose of rendering the foregoing opinions and
statements, we have relied, as to various questions of fact material to such
opinions and statements, upon the representations made in the Underwriting
Agreement and the Pricing Agreement and upon certificates of officers of the
Guarantor. We also have examined originals, or copies of originals certified to
our satisfaction, of such agreements, documents, certificates and other
statements of government officials and other instruments, have examined such
questions of law and have satisfied ourselves as to such matters of fact as we
have considered relevant and necessary as a basis for such opinions. We have
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the legal capacity of all natural persons and the
conformity with the original documents of any copies thereof submitted to us for
our examination.
Except as otherwise stated in the third sentence of this
paragraph, this opinion is limited to the laws of the State of New York and the
federal laws of the United States of America. We have examined copies of the
Guarantor's Articles of Incorporation, as amended to date, and its currently
effective By-laws and certificates issued by the Secretary of State and the
Comptroller of Public Accounts of the State of Texas on ___________, 1997.
Notwithstanding such examination, we have relied, with
<PAGE>
your consent, as to the incorporation of the Guarantor and as to all other
matters covered by this letter on the opinion dated and delivered to you this
date of Vinson & Elkins L.L.P., subject to the exceptions, qualifications and
limitations therein expressed.
Any opinion or statement herein which is expressed to be "to
our knowledge" or is otherwise qualified by words of like import means that the
lawyers in this firm who have had an involvement in the preparation of the
Registration Statement and the Prospectus and the transactions contemplated by
the Underwriting Agreement have no current conscious awareness of any facts or
information contrary to such opinion or statement.
The opinions expressed in paragraphs 4, 6 and 7 with respect
to the enforceability of the documents therein referenced are subject to the
qualification that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws affecting
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
This letter is being delivered solely for the benefit of the
persons to whom it is addressed; accordingly, it may not be quoted, filed with
any governmental authority or other regulatory agency or otherwise circulated or
utilized for any other purpose without our prior written consent. We assume no
obligation to update this opinion after the date hereof.
Very truly yours,
<PAGE>
ANNEX II(b)
Form of Opinion of Richards, Layton & Finger
_______ __, 1997
Goldman, Sachs & Co.
[Names of Co-Representatives]
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Re: CPL Capital I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Central Power
and Light Company, a Texas corporation (the "Company"), and CPL Capital I, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
The Certificate of Trust of the Trust, dated as of
______ __, 1997 (the "Certificate"), as filed in the office of the Secretary of
State of the State of Delaware (the "Secretary of State") on _______ __, 1997;
The Trust Agreement of the Trust, dated as of
January __, 1997, between the Company and the trustees of the Trust named
therein (collectively, the "Trustees"), as amended and restated pursuant to an
Amended and Restated Trust Agreement of the Trust, dated as of ________ __,
1997, among the Company, the
<PAGE>
Goldman, Sachs & Co.
[Names of Co-Representatives]
_________ __, 1997
Page 2
Trustees and the holders, from time to time, of the undivided beneficial
interests in the assets of the Trust (including the Exhibits C and E thereto)
(collectively, the "Trust Agreement");
(c) The Underwriting Agreement and the Pricing Agreement,
each dated as of January __, 1997 (collectively, the "Underwriting Agreement"),
among the Trust, the Company and the Underwriters named therein;
(d) The Prospectus dated January __, 1997, as
supplemented by the Prospectus Supplement dated ________ __, 1997 (collectively,
the "Prospectus"), relating to the ____% Cumulative Quarterly Income Preferred
Securities, Series A, of the Trust representing undivided beneficial interests
in the assets of the Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities"); and
(e) A Certificate of Good Standing for the Trust, dated
________ __, 1997, obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Trust Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation, and termination of the Trust, and
<PAGE>
Goldman, Sachs & Co.
[Names of Co-Representatives]
_________ __, 1997
Page 3
that the Trust Agreement and the Certificate are in full force and effect and
have not been amended, (ii) except to the extent provided in paragraph 1 below,
the due creation, due formation or due organization, as the case may be, and
valid existence in good standing of each party to the documents examined by us
under the laws of the jurisdiction governing its creation, formation or
organization, (iii) the legal capacity of each signatory to the documents
examined by us, (iv) except to the extent set forth in paragraph 4 below, that
each of the parties to the documents examined by us has the power and authority
to execute and deliver, and to perform its obligations under, such documents,
(v) except to the extent provided in paragraph 5 below, that each of the parties
to the documents examined by us has duly authorized, executed and delivered such
documents, (vi) the receipt by each Person to whom a Preferred Security is to be
issued by the Trust (collectively, the "Preferred Security Holders") of a
Preferred Securities Certificate and the payment for the Preferred Security
acquired by it, in accordance with the Trust Agreement and the Prospectus, and
(vii) that the Preferred Securities are issued and sold to the Preferred
Security Holders in accordance with the Trust Agreement and the Prospectus,
(viii) the receipt by the Person (the "Common Security Holder") to whom a Common
Security of the Trust representing common undivided beneficial interests in the
assets of the Trust (each, a "Common Security" and collectively, the "Common
Securities") (the Preferred Securities and the Common Securities being
hereinafter collectively referred to as "Trust Securities") is to be issued by
the Trust of a Common Securities Certificate for the Common Security and the
payment for the Common Security acquired by it, in accordance with the Trust
Agreement, and as described in the Prospectus, (ix) that the Common Securities
are issued and sold to the Common Security Holder in accordance with the Trust
Agreement, and as described in the Underwriting Agreement, (x) that the Trust
derives no income from or connected with sources within the State of Delaware
and has no assets, activities (other than having a Delaware trustee as required
by the Delaware Business Trust Act and filing documents with the Secretary of
State) or employees in the State of Delaware, and (xi) that the Trust is treated
as a grantor trust for federal income tax purposes. We have not participated in
the preparation of the Prospectus and assume no responsibility for its contents
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
<PAGE>
Goldman, Sachs & Co.
[Names of Co-Representatives]
_________ __, 1997
Page 4
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions as set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been made.
2. Under the Trust Agreement and the Delaware Business Trust Act,
the Trust has the trust power and authority to own its properties and conduct
its business, all as described in the Prospectus.
3. The Trust Agreement constitutes a legal, valid and binding
obligation of the Company and the Trustees, and is enforceable against the
Company and the Trustees, in accordance with its terms.
4. Under the Trust Agreement and the Delaware Business Trust Act,
the Trust has the power and authority to (A) execute and deliver, and to perform
its obligations under, the Underwriting Agreement, and (B) issue and perform its
obligations under the Trust Securities.
5. Under the Trust Agreement and the Delaware Business Trust Act,
the execution and delivery by the Trust of the Underwriting Agreement, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary trust action on the part of the Trust.
6. The Preferred Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and nonassessable undivided
beneficial interests in the assets of the Trust and are entitled to the benefits
of the Trust Agreement (subject to the terms of the Trust Agreement). The
Preferred Security Holders, as beneficial owners of the Trust, 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. We note that the Preferred Security Holders may be obligated,
pursuant to the Trust Agreement, (A) to provide indemnity and/or security in
connection with and pay
<PAGE>
Goldman, Sachs & Co.
[Names of Co-Representatives]
_________ __, 1997
Page 5
taxes or governmental charges arising from transfers or exchanges
of Preferred Securities Certificates and the issuance of replacement Preferred
Securities Certificates, and (B) to provide security or indemnity in connection
with requests of or directions to the Property Trustee to exercise its rights
and powers under the Trust Agreement.
7. The Common Securities have been duly authorized by the Trust
Agreement and are duly and validly issued undivided beneficial interests in the
assets of the Trust.
8. Under the Trust Agreement and the Delaware Business Trust Act,
the issuance of the Trust Securities is not subject to preemptive rights.
9. The issuance and sale of the Trust Securities by the Trust,
the execution and delivery by the Trust of the Underwriting Agreement, the
consummation by the Trust of the transactions contemplated by the Underwriting
Agreement and compliance by the Trust with its obligations under the
Underwriting Agreement do not violate (A) any of the provisions of the
Certificate or the Trust Agreement or (B) any applicable Delaware law or
Delaware administrative regulation.
10. No authorization, approval, consent or order of any Delaware
court or any Delaware governmental authority or Delaware agency is required to
be obtained by the Trust solely in connection with the issuance and sale of the
Trust Securities.
11. The Preferred Security Holders (other than those Preferred
Security Holders who reside or are domiciled in the State of Delaware) will have
no liability for income taxes imposed by the State of Delaware solely as a
result of their participation in the Trust, and the Trust will not be liable for
any income tax imposed by the State of Delaware.
The opinions expressed in paragraph 3 above are subject, as to
enforcement, to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or affecting the
rights and remedies of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions relating to
indemnification or contribution.
<PAGE>
Goldman, Sachs & Co.
[Names of Co-Representatives]
_________ __, 1997
Page 6
We consent to your relying as to matters of Delaware law upon
this opinion in connection with the Purchase Agreement. We also consent to
Milbank, Tweed, Hadley & McCloy and Sidley & Austin's relying as to matters of
Delaware law upon this opinion in connection with opinions to be rendered by
them on the date hereof pursuant to the Underwriting Agreement. Except as stated
above, without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
CDK/JLJ
<PAGE>
ANNEX II(c)
Form of Milbank, Tweed, Hadley & McCloy
Opinion Letter
[-----------], [----]
Goldman, Sachs & Co.
[-------------------]
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Re: CPL Capital I
[ ]% Cumulative Quarterly Income Preferred
Securities, Series A
Ladies and Gentlemen:
We have acted as special counsel to Central Power and Light
Company, a Texas corporation (the "Company"), and CPL Capital I, a statutory
business trust formed under the laws of the State of Delaware ("CPL Capital"),
in connection with the purchase by you, severally, from CPL Capital, pursuant to
the Underwriting Agreement and related Pricing Agreement, each dated
[__________], [____] (together, the "Underwriting Agreement"), among you, CPL
Capital and the Company, of [_________] [____]% Cumulative Quarterly Income
Preferred Securities, Series A ("Preferred Securities"). The Preferred
Securities will be issued pursuant to the Amended and Restated Trust Agreement
of CPL Capital, dated as of [__________], [____] (the "Trust Agreement"), among
the Company,
<PAGE>
- 2 -
as depositor, The Bank of New York, as property trustee (the "Property
Trustee"), The Bank of New York (Delaware), as Delaware trustee (the "Delaware
Trustee") and Wendy G. Hargus and R. Russell Davis, as administrative trustees
(the "Administrative Trustees"). In connection with the issuance by CPL Capital
of the Preferred Securities, CPL Capital is to purchase from the Company, as
contemplated in the Underwriting Agreement, Junior Subordinated Deferrable
Interest Debentures, [____]% Series due [____], in the principal amount of
$[_________] (the "Junior Subordinated Debentures"). The Junior Subordinated
Debentures are to be issued under and pursuant to the Indenture, dated as of
[_________], [____] (the "Indenture"), between the Company and The Bank of New
York, as trustee (the "Trustee"), and the related Supplemental Indenture dated
[_________], [____]. Also in connection with the issuance by CPL Capital of the
Preferred Securities, the Company will guarantee (the "Guarantee") the Preferred
Securities to the extent set forth in a Guarantee Agreement dated as of
[______], [____], between the Company and The Bank of New York, as trustee (the
"Guarantee Agreement"). Capitalized terms used herein and not otherwise defined
have the meanings ascribed to them in the Underwriting Agreement.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of the Company and such trust records of
CPL Capital, indentures, agreements and other
<PAGE>
- 3 -
instruments, certificates of public officials, certificates of officers and
representatives of the Company and of CPL Capital and other documents as we have
deemed it necessary to require as a basis for the opinions hereinafter
expressed. In our examination we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
with the original documents of all documents submitted to us as copies and the
authenticity of the originals of such latter documents. As to various questions
of fact material to such opinions, we have, when relevant facts were not
independently established, relied upon certifications by the Company, CPL
Capital, officers of the Company, the Property Trustee, the Delaware Trustee and
the Administrative Trustees and other appropriate persons and statements
contained in the Registration Statement hereinafter mentioned.
In addition, we attended the closing held today at our
offices, during the course of which (i) CPL Capital delivered the Preferred
Securities to your representatives at the office of The Depository Trust
Company, 55 Water Street, New York, New York, for your several accounts, in
accordance with the Underwriting Agreement, against payment therefor and (ii)
the Company caused the Junior Subordinated Debentures to be delivered to CPL
Capital, against payment thereof.
<PAGE>
- 4 -
Based upon the foregoing, and having regard to legal
considerations which we deem relevant, we are of the opinion that:
1. The Company is a corporation validly existing under the
laws of the State of Texas.
2. The Underwriting Agreement has been duly authorized,
executed and delivered by each of CPL Capital and the Company.
3. The Registration Statement (Nos. [__________] and
[____________]) on Form S-3, as amended, with respect to the Preferred
Securities, the Junior Subordinated Debentures and the Guarantee (the
"Registration Statement"), filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of 1933,
as amended (the "Act"), has become effective and, to our knowledge, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending under the Act. The Prospectus, dated
[_____________], 1997, as amended by the Prospectus Supplement, dated
[____________], 1997 (the "Prospectus"), including all documents
incorporated by reference therein pursuant to the requirements of Form
S-3 under the Act, constituting a part thereof, may lawfully be used
for the purposes specified in the Act in connection with the offer and
sale of the Preferred Securities in the manner therein specified,
subject to compliance with the provisions of "blue sky" or securities
laws of certain States in connection with the offer for sale or sale of
the Preferred Securities in such States.
4. The Registration Statement and the Prospectus, including
all documents incorporated by reference pursuant to the requirements of
Form S-3 under the Act (other than financial statements and related
schedules and other financial and statistical data included or
incorporated by reference therein or omitted therefrom, as to which we
express no opinion or belief), as of their respective effective or
issue dates complied as to form, in all material respects, with the
requirements of the Act (or, where appropriate, the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) and to the applicable
rules and regulations of the Commission under each such statutes.
<PAGE>
- 5 -
5. The statements under "Description of Preferred Securities",
"Description of Guarantees", "Description of Junior Subordinated
Debentures", "Description of Corresponding Junior Subordinated
Debentures", "Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debentures and the Guarantees" and
"Plan of Distribution" in the Prospectus, insofar as such statements
constitute summaries of legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings, and fairly
summarize the matters referred to therein in all material respects.
6. The order of the Commission, dated [____________], [____],
in File No. 70-[_________], under the Public Utility Holding Company
Act of 1935, as amended, relating to the offer and sale by CPL Capital
of the Preferred Securities, the sale by the Company of the Junior
Subordinated Debentures and the issuance by the Company of the
Guarantee (being the order of the Commission referred to in paragraph
(s) of Section 2 of the Underwriting Agreement) has been duly entered
by the Commission and, to our knowledge, remains in full force and
effect. No further authorization, approval, consent or order of any
Federal governmental body or regulatory authority is required for the
authorization of the issuance or sale of the Junior Subordinated
Debentures and Preferred Securities and the undertaking of the Company
of the Guarantee in conformity with the order by the Company pursuant
to the terms of the Underwriting Agreement, except for (i) the
registration under the Act of the Preferred Securities, the Guarantee
and the Junior Subordinated Debentures and (ii) the qualification of
the Indenture, Trust Agreement and Guarantee Agreement under the Trust
Indenture Act of 1939, as amended.
7. The Guarantee Agreement has been duly and validly authorized
by all necessary corporate action of the Company and has been duly and
validly executed and delivered by the Company, and the Guarantee
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except (a) as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general
applicability affecting the enforceability of creditors' rights and
(b) that enforceability may be limited by the application of general
principles of equity (regardless of whether considered in a proceeding
in equity or at law), including
<PAGE>
- 6 -
without limitation (i) the possible unavailability of specific
performance, injunctive relief or any other equitable remedies and (ii)
concepts of materiality, reasonableness, good faith and fair dealing.
8. The Indenture, the Trust Agreement and the Expense
Agreement have been duly and validly authorized by all necessary
corporate action of the Company, have been duly and validly executed
and delivered by the Company, and are valid and binding obligations of
the Company enforceable against the Company in accordance with their
terms, except (a) as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws of general
applicability affecting the enforceability of creditors' rights and (b)
that enforceability may be limited by the application of general
principles of equity (regardless of whether considered in a proceeding
in equity or at law), including without limitation (i) the possible
unavailability of specific performance, injunctive relief or any other
equitable remedies and (ii) concepts of materiality, reasonableness,
good faith and fair dealing.
9. Each of the Indenture, the Trust Agreement and the
Guarantee Agreement have been duly qualified under the Trust
Indenture Act of 1939, as amended.
10. The issue and sale of the Junior Subordinated Debentures by
the Company as contemplated by the Underwriting Agreement have been
duly authorized by all necessary corporate action. The Junior
Subordinated Debentures, when duly executed, authenticated and
delivered to CPL Capital, against payment to the Company of the agreed
consideration therefor, will be (subject to the qualifications stated
in paragraph 8 above) valid and binding obligations of the Company and
are entitled to the benefits afforded by the Indenture in accordance
with the terms of the Indenture and the Junior Subordinated Debentures.
11. To our knowledge, there are no legal or governmental
proceedings pending or threatened to which the Company is a party which
are required to be disclosed in the Prospectus, other than those
disclosed therein; and, to our knowledge, there are no contracts or
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described therein or filed
therewith.
<PAGE>
- 7 -
12. Neither CPL Capital nor the Company is an "investment
company" nor an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended.
The Registration Statement was filed on Form S-3 under the Act
and, accordingly, the Prospectus does not necessarily contain a current
description of the Company's business and affairs since Form S-3 provides for
the incorporation by reference of certain documents filed with the Commission
which contain descriptions as of various dates. We participated in the
preparation of the Registration Statement and Prospectus and we have reviewed
certain documents filed by the Company under the Exchange Act, which are
incorporated by reference in the Prospectus (such documents listed in the
Prospectus as being incorporated by reference are herein called the
"Incorporated Documents"). Although we have not independently verified the
accuracy, completeness or fairness of the statements contained therein or in the
Incorporated Documents, none of the foregoing disclosed to us any information
which gave us reason to believe that the Registration Statement and the
Incorporated Documents, considered as a whole on the effective date of the
Registration Statement, contained or contain any untrue statement of a material
fact or omitted or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or that the
Prospectus and the Incorporated Documents, considered as a whole on the date
hereof,
<PAGE>
- 8 -
contained or contain any untrue statement of a material fact or omitted or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading. Except as set forth in paragraphs 3
and 4 above, we express no opinion as to any document filed by the Company under
the Exchange Act, whether prior or subsequent to such effective date, except to
the extent that such documents are Incorporated Documents read together with the
Registration Statement or the Prospectus and considered as a whole, nor do we
express any opinion as to the operating statistics, financial statements or
other financial data included in or omitted from, or incorporated by reference
in, the Registration Statement, the Prospectus or the Incorporated Documents.
In rendering the opinions hereinabove expressed, we have
relied, with your permission, subject to the assumptions, qualifications or
limitations therein, upon the opinion of Vinson & Elkins, special Texas counsel
to the Company as to all matters of Texas law, and upon the opinion of Richards,
Layton & Finger, P.A., special Delaware counsel to the Company and CPL Capital,
to the extent that Delaware law other than the General Corporation Law of the
State of Delaware, including Delaware trust law, is concerned, furnished
pursuant to paragraphs (c) and (e), respectively, of Section 7 of the Agreement.
<PAGE>
- 9 -
We are members of the bar of the State of New York and we do not express
any opinion as to matters governed by any laws other than the laws of the State
of New York, the General Corporation Law of the State of Delaware and the
Federal laws of the United States of America, and, with your consent as set
forth above, and solely in reliance upon opinion of special counsel to the
Company and CPL Capital, the laws of the State of Delaware (other than the
General Corporation Law) and Texas.
Very truly yours,
RBW/DBB/JMH
<PAGE>
ANNEX II(d)
Form of Vinson & Elkins L.L.P.
Opinion Letter
(214) 220-7716
(214) 220-7700
___________ __, 1997
Goldman, Sachs & Co.
[Names of Co-Representatives]
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We have acted as special Texas counsel to Central Power and Light
Company, a Texas corporation (the "Company"), in connection with the proposed
public offering by the Company from time to time of up to $150 million aggregate
principal amount of the Company's Junior Subordinated Debentures (the
"Subordinated Debentures") to be issued in one or more series pursuant to an
indenture between the Company and The Bank of New York, as Trustee (the
"Indenture"), and the proposed issuance and sale by CPL Capital I and CPL
Capital II, each a business trust created under the laws of the State of
Delaware (collectively, the "Issuer Trusts"), from time to time in one or more
series, not to exceed $150 million, of their preferred securities, representing
preferred undivided beneficial interests in the assets of such Issuer Trusts
(the "Preferred Securities") This opinion is being furnished to you pursuant to
Paragraph 7(e) of the Underwriting Agreement dated , 1997, between CPL Capital
I, the Company and Goldman, Sachs & Co. and , as Representatives of the several
Underwriters. Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to them in the Underwriting Agreement.
We have examined originals or certified copies of all such corporate
records of the Company, indentures, agreements and other instruments,
certificates of public officials, certificates of officers and representatives
of the Company and other documents that we considered necessary and proper in
order to render the opinions hereinafter expressed. In our examination we have
assumed the genuineness of all signatures, the accuracy and completeness of all
documents submitted to us, the authenticity of all documents submitted to us as
originals and the conformity to original documents of all documents submitted to
us as certified or photostatic copies. As to factual matters material to the
opinions herein stated, we have relied to the extent we deem such reliance
proper upon certificates given or representations made by public officials and
duly authorized representatives of the Company.
<PAGE>
Goldman, Sachs & Co., et. al.
, 1997
Page 2
Based upon the foregoing, and subject to the qualifications hereinafter
set forth, we are of the opinion that:
1. The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Texas. The Company
has the corporate power and authority to own its property and conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the financial condition,
result of operations or business of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect").
2. The Company is a public utility (as defined in the Public
Utility Regulatory Act ("PURA") of the State of Texas), duly authorized by its
Restated Articles of Incorporation, filed with the Secretary of State of the
State of Texas on January 30, 1990, as amended through the date hereof, to
conduct the business of generating and supplying gas, electric light and motor
power to the public. The Company is authorized under the laws of the State of
Texas to operate as an electric utility (as defined in PURA) in the areas of the
State of Texas in which it currently does so, except where the failure to be so
authorized would not have a Material Adverse Effect.
3. The Company has valid and subsisting municipal franchises,
licenses or permits authorizing it to operate as an electric utility in all of
the municipalities listed on Exhibit A hereto (which municipalities the Company
has certified to us are all the municipalities served by it from which the
Company derives a material amount of electric operating revenues) wherein such a
franchise, license or permit is required.
4. Except as set forth in the Prospectus, including documents
incorporated by reference therein, to our knowledge, there is no litigation or
other legal proceeding pending or threatened in the State of Texas to which the
Company is a party or to which property of the Company is subject that might
reasonably be expected to result in a Material Adverse Effect.
5. No approval, authorization, consent, certificate or order of
any state governmental body or regulatory authority of the State of Texas is
necessary in connection with the issuance and sale of the Securities or the
issuance of the Subordinated Debentures and the Guarantee as contemplated by the
Underwriting Agreement and the Prospectus, except as may be required by the
"blue sky" or securities laws or regulations of the State of Texas.
6. Each of the Underwriting Agreement and the Pricing Agreement
has been duly authorized, executed and delivered by the Company.
7. Each of the Guarantee Agreement, the Trust Agreement, the
Indenture and the Expense Agreement (together the "Guarantor Agreements") has
been duly authorized, executed and
<PAGE>
Goldman, Sachs & Co., et. al.
, 1997
Page 3
delivered by the Company and the Guarantee has been duly authorized and, when
issued and delivered pursuant to the Underwriting Agreement, will have been duly
executed, issued and delivered.
8. The Subordinated Debentures have been duly authorized,
executed and delivered by the Company.
9. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting Agreement,
the Pricing Agreement and each of the Guarantor Agreements and the issuance by
the Company of the Guarantee and the Subordinated Debentures will not result in
a breach of any provision of the Restated Articles of Incorporation or bylaws of
the Company or, to our knowledge, any agreement or instrument to which the
Company is a party that is material to the Company or, to our knowledge, result
in a violation of any provision of applicable law of the State of Texas
(provided that no opinion is expressed with respect to the indemnification
provision in the Underwriting Agreement insofar as public policy considerations
may affect the performance thereof) or any judgment, decree or order applicable
to the Company of any governmental body or agency of the State of Texas or any
court having jurisdiction over the Company in the State of Texas.
With respect to the opinions contained in paragraph 1. above regarding
the valid existence of the Company, we have relied solely upon (i) certificates
provided by officials of the State of Texas or (ii) telegraphic or oral
confirmation therefrom where such certificates were unavailable as of the date
hereof.
With respect to the opinions contained in paragraph 3. above, we have
relied solely upon certificates of officers of the Company and searches as of
recent dates of our files, the Company's records and court records of the
following courts: The state district courts for Dallas County, Travis County,
Matagorda County and Nueces County, Texas; and the federal district courts for
the Southern District (Corpus Christi and Galveston Divisions) of Texas and the
Northern District (Dallas Division) of Texas.
With respect to the opinions contained in paragraph 9. above, we have
relied solely upon certificates of officers of the Company as to which
agreements and instruments are material to the Company.
We are licensed to practice law in the State of Texas and do not hold
ourselves out to be experts on the laws of any jurisdiction other than the State
of Texas. We express no opinion with regard to any matter which may be governed
by the laws of any state or other jurisdiction (including the United States of
America) other than the State of Texas.
This opinion is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters herein expressly stated.
<PAGE>
Goldman, Sachs & Co., et. al.
, 1997
Page 4
Except as provided otherwise in a written consent signed by us, the
opinions expressed herein are for the sole benefit of, and may only be relied
upon by, you, your counsel and Milbank, Tweed, Hadley & McCloy, special counsel
for the Company, and the opinions herein expressed are not to be used,
circulated, quoted or otherwise referred to in any manner other than as
specifically provided in the Underwriting Agreement, or by or to any other
person.
Very truly yours,
<PAGE>
EXHIBIT A
MUNICIPALITIES
Alice
Bay City
Beeville
Corpus Christi
Del Rio
Eagle Pass
Edinburg
Harlingen
Ingleside
Kingsville
Laredo
McAllen
Mission
Pharr
Rockport
Uvalde
Victoria
Weslaco
<PAGE>
Annex II(e)
Form of Christy & Viener Opinion
to be delivered pursuant to section 7(f)
Goldman, Sachs & Co.
[Names of Co-Representative(s)]
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:
We have acted as special tax counsel to Central Power and
Light Company, a Texas corporation (the "Company) and CPL Capital I, a Delaware
statutory business trust (the "Trust") in connection with the offering by the
Trust of its Cumulative Quarterly Income Preferred Securities, Series A (the
"Series A Preferred Securities"), as described in the Registration Statement on
Form S-3 (the "Registration Statement"), filed by the Company, the Trust, and
CPL Capital II, a Delaware statutory business trust, with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended. The
Registration Statement includes the Prospectus and the Prospectus Supplement
dated as of [ , 1997] (collectively, the "Prospectuses"), relating to such
offering. Capitalized terms not defined herein have the meanings specified in
the Prospectuses.
In rendering the opinions expressed below, we have examined
the Prospectuses and such other documents as we have deemed relevant and
necessary, including, without limitation, the Amended and Restated Trust
Agreement, the Indenture, the Supplemental Indenture, and the Guarantee
Agreement relating to the Series A Preferred Securities each dated as of [ ,
1997]. Such opinions are conditioned, among other things, upon the accuracy and
completeness of the facts, information and representations contained in the
Prospectuses as of the date hereof. We have not undertaken any independent
investigation of any factual matters set forth in the Prospectuses or such other
documents. We have assumed that the transactions contemplated by the
Prospectuses and such other documents will occur as provided therein. We have
also assumed that the Series A Preferred Securities, when issued, will be rated
not less than [ ] by Standard & Poor's Rating Services and [ ]by Moody's
Investors Service, Inc.
We have assumed the authenticity of all documents submitted
to us as originals, the genuineness of all
<PAGE>
signatures, the legal capacity of all natural persons, and the conformity with
original documents of all copies submitted to us for our examination. We have
also assumed that all obligations imposed by such documents on the parties
thereto are or will be enforceable, and have been or will be performed or
satisfied in accordance with their terms. In addition, we have relied, with your
consent, on the opinion of Richards, Layton & Finger with respect to the
validity of the Series A Preferred Securities, the enforceability of the Amended
and Restated Trust Agreement, and the formation of the Trust and on the opinion
of Milbank, Tweed, Hadley & McCloy with respect to the validity of the Series A
Debentures and the Series A Guarantee.
In rendering the opinions expressed below, we have considered
the applicable provisions of the Internal Revenue Code of 1986, as amended the
(the "Code"), regulations promulgated thereunder by the United States Treasury
Department (the "Regulations"), pertinent judicial authorities, rulings of the
Internal Revenue Service, and such other authorities as we have considered
relevant. It should be noted that the Code, the Regulations, and such judicial
decisions, administrative interpretations and other authorities are subject to
change at any time and, in some circumstances, with retroactive effect, and any
such change could affect the opinions stated herein.
Based upon and subject to the foregoing, we are of the opinion
that:
(i) under current law, for United States federal income tax
purposes (A) the Series A Debentures will constitute indebtedness of the Company
and (B) the interest on the Series A Debentures will be deductible by the
Company in accordance with section 163 of the Code and the Regulations
promulgated thereunder, subject to any applicable limitations on the Company's
ability to deduct interest on any of its indebtedness;
(ii) under current law, the Trust will be classified for
United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation; accordingly, for United States federal
income tax purposes, each beneficial owner of Series A Preferred Securities
generally will be considered the owner of an undivided beneficial interest in
the Series A Debentures, and will be required to include in its gross income its
allocable share of any interest and original issue discount paid or accrued with
respect to the Series A Debentures; and
(iii) the discussion set forth in the Prospectus Supplement
under the caption "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" is a fair and
accurate summary of the matters addressed therein, based upon current law and
the assumptions stated or referred to therein.
We assume no obligation to update or supplement this letter to
reflect any facts or circumstances which may hereafter come to our attention
with respect to the opinions expressed above, including any changes in
applicable law which may hereafter occur.
Very truly yours,
<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.
- --------
*QUIPS is a service mark of Goldman, Sachs & Co.
Exhibit 4(a)
CENTRAL POWER AND LIGHT COMPANY
AND
THE BANK OF NEW YORK,
AS TRUSTEE
INDENTURE
Dated as of ____________, 1997
Junior Subordinated Debentures
CROSS-REFERENCE TABLE
Section of
Trust Indenture Act Section of
of 1939, as amended Indenture
310(a).........................................................7.09
310(b).........................................................7.08
..............................................................7.10
310(c).....................................................Inapplicable
311(a).........................................................7.13
311(c).....................................................Inapplicable
312(a).........................................................5.01
..............................................................5.02(a)
312(b).........................................................5.02(c)
..............................................................5.02(d)
312(c).........................................................5.02(e)
313(a).........................................................5.04(a)
313(b).........................................................5.04(b)
313(c).........................................................5.04(a)
..............................................................5.04(b)
313(d).........................................................5.04(c)
314(a).........................................................5.03
314(b).....................................................Inapplicable
314(c)........................................................13.06
314(d).....................................................Inapplicable
314(e)........................................................13.06
314(f).....................................................Inapplicable
315(a).........................................................7.01(a)
..............................................................7.02
315(b).........................................................6.07
315(c).........................................................7.01
315(d).........................................................7.01(b)
..............................................................7.01(c)
315(e).........................................................6.08
316(a).........................................................6.06
..............................................................8.04
316(b).........................................................6.04
316(c).........................................................8.01
317(a).........................................................6.02
317(b).........................................................4.03
318(a)........................................................13.08
i
TABLE OF CONTENTS*
Page
RECITALS............................................................. 1
ARTICLE ONE
Definitions......................... 2
SECTION 1.01 Definitions......................................... 2
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures ......... 6
SECTION 2.01 Amount Unlimited; Issuable
in Series........................................... 6
SECTION 2.02 Forms Generally..................................... 8
SECTION 2.03 Denominations....................................... 8
SECTION 2.04 Execution, Authentification,
Delivery and Dating................................. 11
SECTION 2.05 Registration, Registration of
Transfer and Exchange............................... 12
SECTION 2.06 Temporary Debentures................................ 13
SECTION 2.07 Mutilated, Destroyed, Lost
and Stolen Debentures............................... 14
SECTION 2.08 Cancellation by Trustee............................. 15
SECTION 2.09 Benefits of Indenture............................... 15
SECTION 2.10 Authenticating Agent................................ 15
SECTION 2.11 Global Debenture.................................... 16
SECTION 2.12 Shortening of Stated Maturity....................... 19
SECTION 2.13 CUSIP Numbers........................................19
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions................ 19
SECTION 3.01 Applicability of Article: Redemption................ 19
SECTION 3.02 Election to Redeem; Notice to Trustee............... 19
SECTION 3.03 Debentures Payable on Redemption Date............... 21
SECTION 3.04 Applicability of Article:
Sinking Fund........................................ 21
SECTION 3.05 Satisfaction of Sinking Fund
Payment with Debentures............................. 22
SECTION 3.06 Redemption of Debentures for
Sinking Fund........................................ 22
- --------
** This Table of Contents does not constitute part of the Indenture
and should not have any bearing upon the interpretation of any
of its terms or provisions.
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ARTICLE FOUR
Particular Covenants of the Company.................. 22
SECTION 4.01 Payment of Principal, Premium
and Interest....................................... 23
SECTION 4.02 Maintenance of Office or Agency.................... 23
SECTION 4.03 Money for Debenture Payments to
Be Held in Trust................................... 23
SECTION 4.04 Maintenance of Trustee............................. 24
SECTION 4.05 Corporate Existence................................ 24
SECTION 4.06 Restriction on Payment of Dividends................ 25
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee............................. 25
SECTION 5.01 List of Holders.................................... 25
SECTION 5.02 Maintenance of List................................ 26
SECTION 5.03 Company Reports.................................... 27
SECTION 5.04 Trustee Report..................................... 29
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default............................. 30
SECTION 6.01 Events of Default; Acceleration,
Rescission and Annulment........................... 30
SECTION 6.02 Collection of Indebtedness and
Suits for Enforcement by Trustee................... 33
SECTION 6.03 Application of Money Collected..................... 34
SECTION 6.04 Limitation on Suits................................ 35
SECTION 6.05 Rights and Remedies Cumulative..................... 36
SECTION 6.06 Control by Holders of Securities................... 36
SECTION 6.07 Notice of Default.................................. 37
SECTION 6.08 Undertaking for Costs.............................. 38
ARTICLE SEVEN
Concerning the Trustee..................................... 38
SECTION 7.01 Certain Duties and Responsibilities................ 38
SECTION 7.02 Certain Rights of Trustee.......................... 40
SECTION 7.03 Not Responsible for Recitals or
Issuance of Debentures............................. 42
SECTION 7.04 May Hold Debentures................................ 42
SECTION 7.05 Money Held in Trust................................ 42
SECTION 7.06 Compensation and Reimbursement..................... 42
SECTION 7.07 Reliance on Officer's Certificate.................. 43
SECTION 7.08 Conflicting Interests.............................. 43
SECTION 7.09 Corporate Trustee Required; Eligibility............ 44
SECTION 7.10 Resignation and Removal; Appointment
of Successor....................................... 44
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<PAGE>
SECTION 7.11 Acceptance of Appointment by Successor............. 46
SECTION 7.12 Merger, Conversion or Consolidation................ 47
SECTION 7.13 Collection of Claims Against Company............... 48
ARTICLE EIGHT
Concerning the Debentureholders............................ 48
SECTION 8.01 Actions; Record Date............................... 48
SECTION 8.02 Proof of Action.................................... 48
SECTION 8.03 Persons Considered Holders......................... 49
SECTION 8.04 Debentures Held by Company or
Affiliates......................................... 49
SECTION 8.05 Revocation of Action............................... 50
ARTICLE NINE
Supplemental Indentures.................................... 50
SECTION 9.01 Supplemental Indentures Without
Consent of Holders................................. 50
SECTION 9.02 Supplemental Indentures With Consent
of Holders......................................... 51
SECTION 9.03 Effect of Supplemental Indentures.................. 52
SECTION 9.04 Reference in Debentures to
Supplemental Indentures............................ 53
SECTION 9.05 Reliance by Trustee................................ 53
ARTICLE TEN
Consolidation, Merger and Sale.............................. 53
SECTION 10.01 Company May Consolidate, etc., on
Certain Terms...................................... 53
SECTION 10.02 Substitution of Successor
Corporation........................................ 54
SECTION 10.03 Reliance by Trustee................................ 55
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys......................................... 55
SECTION 11.01 Satisfaction and Discharge of
Debentures......................................... 55
SECTION 11.02 Satisfaction and Discharge of
Indenture.......................................... 56
SECTION 11.03 Delivery of Opinion of Counsel..................... 56
SECTION 11.04 Application of Trust Money......................... 57
SECTION 11.05 Release of Paying Agent............................ 57
SECTION 11.06 Return of Unclaimed Money.......................... 57
iii
<PAGE>
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors............................................ 57
SECTION 12.01 Liability Solely Corporate........................ 57
ARTICLE THIRTEEN
Miscellaneous Provisions...................................... 58
SECTION 13.01 Indenture Binding on Successor
Company........................................... 58
SECTION 13.02 Application of Indenture Provisions
to Successor Company.............................. 58
SECTION 13.03 Notice............................................ 58
SECTION 13.04 Governing Law..................................... 59
SECTION 13.05 Form of Certificate or Opinion
for Trustee....................................... 59
SECTION 13.06 Opinion of Counsel Provided With
Execution of Indenture............................ 59
SECTION 13.07 Distribution Date Not a Business Day.............. 59
SECTION 13.08 Trust Indenture Act Controls...................... 60
SECTION 13.09 Counterparts...................................... 60
SECTION 13.10 Severability...................................... 60
SECTION 13.11 Assignment to Affiliates.......................... 60
SECTION 13.12 Debenture Constitutes Indebtedness................ 60
ARTICLE FOURTEEN
Subordination of Debentures................................ 61
SECTION 14.01 Debentures Subordinate to Senior
Indebtedness...................................... 61
SECTION 14.02 Payment Over of Proceeds of Debentures............ 61
SECTION 14.03 Priority of Senior Indebtedness................... 62
SECTION 14.04 Subrogation....................................... 63
SECTION 14.05 Trustee as Attorney-In-Fact of
Debentureholders for Subordination................ 64
SECTION 14.06 Notice to Trustee to Effectuate
Subordination..................................... 64
SECTION 14.07 Trustee as Holder of Senior Indebtedness;
No Fiduciary Duty to Other Holders
of Senior Indebtedness........................... 65
SECTION 14.08 Rights of Holders of Senior
Indebtedness Not Impaired......................... 66
iv
<PAGE>
THIS INDENTURE, dated as of the ____ day of _________, 1997,
between CENTRAL POWER AND LIGHT COMPANY, a corporation duly organized and
existing under the laws of the State of Texas (hereinafter sometimes referred to
as the "Company"), and THE BANK OF NEW YORK, a New York banking corporation
organized and existing under the laws of the State of New York, as trustee
(hereinafter sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to provide for the
issuance of debentures (hereinafter referred to as the "Debentures"), in an
unlimited aggregate principal amount to be issued from time to time in one or
more series as in this Indenture provided as registered Debentures without
coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the
Debentures are to be authenticated, issued and delivered, the Company has duly
authorized the execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication
to be borne by the Debentures (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) or set forth in any indenture supplemental to this Indenture; and
WHEREAS, all acts and things necessary to make the Debentures
issued pursuant hereto, when executed by the Company and authenticated and
delivered by the Trustee as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
indenture and agreement according to its terms, have been done and performed or
will be done and performed prior to the issuance of the Debentures, and the
execution of this Indenture and the issuance hereunder of the Debentures have
been or will be prior to issuance in all respects duly authorized, and the
Company, in the exercise of the legal right and power in it vested, executes
this Indenture and proposes to make, execute, issue and deliver the Debentures;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Debentures are and are to be authenticated, issued and delivered, and in
consideration of the premises, of the purchase and acceptance of the Debentures
by the holders thereof and of the sum of one dollar ($1.00) to it duly paid by
the Trustee at the execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee, for the equal
and proportionate benefit (subject to the provisions of this Indenture) of the
respective holders from time
<PAGE>
to time of the Debentures, without any discrimination, preference or priority of
any one Debenture over any other by reason of priority in the time of issue,
sale or negotiation thereof, or otherwise, except as provided herein, as
follows:
ARTICLE ONE
Definitions
SECTION 1.01. The terms defined in this Section (except as in
this Indenture otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture, any resolution of the Board of
Directors of the Company and of any indenture supplemental hereto shall have the
respective meanings specified in this Section. All other terms used in this
Indenture which are defined in the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") or which are by reference in the Trust Indenture Act
defined in the Securities Act of 1933, as amended (the "Securities Act"),
(except as herein otherwise expressly provided or unless the context otherwise
requires), shall have the meanings assigned to such terms in the Trust Indenture
Act and in the Securities Act as in force at the date of the execution of this
instrument.
"Authenticating Agent" shall mean an authenticating agent with
respect to all or any of the series of Debentures, as the case may be, appointed
with respect to all or any series of the Debentures, as the case may be, by the
Trustee pursuant to Section 2.10.
"Board of Directors" shall mean the Board of Directors of the
Company, or any committee of such Board duly authorized to act on behalf thereof
hereunder.
"Board Resolution" shall mean a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification.
"Business Day" shall mean, with respect to any series of
Debentures, any day other than (i) a Saturday or Sunday or (ii) a day on which
banking institutions in the Borough of Manhattan, the City and State of New York
or any city in which the Trustee's Corporate Trust Office is located, are
authorized or required to close.
"Certificate" shall mean a certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
of the Company. The Certificate need not comply with the provisions of Section
13.05.
2
<PAGE>
"Corporate Trust Office" shall mean the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of the execution of this Indenture is located at 101 Barclay
Street, New York, NY 10286, Attention: Corporate Trust Trustee
Administration.
"Company" shall mean Central Power and Light Company, a
corporation duly organized and existing under the laws of the State of Texas,
and, subject to the provisions of Article Ten, also includes its successors and
assigns.
"Debenture" or "Debentures" shall mean any Debenture or
Debentures, as the case may be, authenticated and delivered under this
Indenture.
"Debentureholder," "holder of Debentures," "registered holder"
or other similar term shall mean the person or persons in whose name or names a
particular Debenture shall be registered on the books of the Company kept for
that purpose in accordance with the terms of this Indenture.
"default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Depositary" shall mean, with respect to Debentures of any
series for which the Company shall determine that such Debentures will be issued
as a Global Debenture, The Depository Trust Company, New York, New York, another
clearing agency or any successor registered as a clearing agency under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.
"Event of Default" shall mean, with respect to Debentures of a
particular series, any event specified in Section 6.01, continued for the period
of time, if any, therein designated.
"Fixed Maturity" shall mean when used with respect to any
Debenture or any installment of principal thereof, the date specified pursuant
to the terms of such Debenture as the fixed date on which principal of such
Debenture or such installment of principal is due and payable, as such date may
be shortened as provided pursuant to the terms of such Debenture and this
Indenture.
"Global Debenture" shall mean, with respect to any
series of Debentures, a Debenture executed by the Company and
3
<PAGE>
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with the Indenture, which shall be registered in
the name of the Depositary or its nominee.
"Governmental Obligations" shall mean securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the specific payment of principal of or interest on the Governmental
Obligation evidenced by such depository receipt.
"Indenture" shall mean this instrument as originally executed,
or, if amended or supplemented as herein provided, as so amended or
supplemented.
"Interest Payment Date," when used with respect to any
installment of interest on a Debenture of a particular series, shall mean the
date specified in such Debenture, a Board Resolution or an indenture
supplemental hereto with respect to that series as the fixed date on which an
installment of interest with respect to Debentures of that series is due and
payable.
"Officer's Certificate" shall mean a certificate signed by the
President, General Manager, Treasurer or an Assistant Treasurer, Controller or
an Assistant Controller or the Secretary or an Assistant Secretary of the
Company. Each such certificate shall include the statements provided for in
Section 13.05, if and to the extent required by the provisions thereof.
"Opinion of Counsel" shall mean an opinion in writing signed
by legal counsel, who may be counsel for the Company, reasonably acceptable to
the Trustee. Each such opinion shall include the statements provided for in
Section 13.05, if and to the extent required by the provisions thereof.
4
<PAGE>
"outstanding", when used with reference to Debentures of any
series, shall mean, subject to the provisions of Section 8.04, as of any
particular time, all Debentures of that series theretofore authenticated and
delivered by the Trustee under this Indenture, except (a) Debentures theretofore
canceled by the Trustee or any paying agent, or delivered to the Trustee or any
paying agent for cancellation or which have previously been canceled; (b)
Debentures or portions thereof for the payment or redemption of which moneys or
Governmental Obligations in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company
shall act as its own paying agent); provided, however, that if such Debentures
or portions of such Debentures are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as in Article Three provided, or
provision satisfactory to the Trustee shall have been made for giving such
notice; (c) Debentures in lieu of or in substitution for which other Debentures
shall have been authenticated and delivered pursuant to the terms of Section
2.07; and (d) Debentures paid pursuant to Section 2.07.
"Predecessor Debenture" of any particular Debenture shall mean
every previous Debenture evidencing all or a portion of the same debt as that
evidenced by that particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.07 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"Responsible Officer," when used with respect to the Trustee,
shall mean the chairman of the board of directors, president, any vice
president, secretary, treasurer, any trust officer, any corporate trust officer
or any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Senior Indebtedness" of the Company shall mean the principal
of, and premium, if any, and interest on and any other payment due pursuant to
any of the following, whether outstanding at the date of execution of this
Indenture or thereafter incurred, created or assumed: (a) all indebtedness of
the Company evidenced by notes, debentures, bonds or other securities sold by
the Company for money, (b) all indebtedness of others of the kinds described in
the preceding clause (a) assumed by or guaranteed in any manner by the Company
or in effect guaranteed by the Company through an agreement to purchase,
contingent or otherwise, (c) all renewals, extensions or refundings of
5
<PAGE>
indebtedness of the kinds described in either of the preceding clauses (a) and
(b) and (d) any payment of money relating to any lease which is capitalized on
the balance sheet or consolidated balance sheet, as the case may be, of the
Company, in accordance with generally accepted accounting principles as in
effect from time to time, unless, in the case of any particular indebtedness,
renewal, extension, refunding or lease payment, the instrument creating or
evidencing the same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension, refunding or lease payment
is not superior in right of payment to or is pari passu with the Debentures.
Such Senior Indebtedness shall continue to be Senior Indebtedness and entitled
to the benefits of the subordination provisions set forth in Article Fourteen of
this Indenture irrespective of any amendment, modification or waiver of any term
of such Senior Indebtedness.
"Trustee" shall mean The Bank of New York and, subject to the
provisions of Article Seven, shall also include its successors and assigns, and
if at any time there is more than one person acting in such capacity hereunder,
"Trustee" means each such person. The term "Trustee" as used with respect to a
particular series of the Debentures means the trustee with respect to that
series.
"Trust Indenture Act," subject to the provisions of Sections
9.01, 9.02 and 10.01, shall mean the Trust Indenture Act of 1939, as amended and
in effect at the date of execution of this Indenture.
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures
SECTION 2.01. The aggregate principal amount of Debentures
which may be authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the
aggregate principal amount of Debentures of that series from time to time
authorized by or pursuant to a Board Resolution or pursuant to one or more
indentures supplemental hereto, prior to the initial issuance of Debentures of a
particular series. Prior to the initial issuance of Debentures of any series,
there shall be established in or pursuant to a Board Resolution delivered to the
Trustee, and set forth in an Officer's Certificate delivered to the Trustee, or
established in one or more indentures supplemental hereto:
6
<PAGE>
(1) the title of the Debentures of the series (which
shall distinguish the Debentures of that series from all
other Debentures);
(2) any limit upon the aggregate principal amount of the
Debentures of that series which may be authenticated and delivered
under this Indenture (except for Debentures authenticated and delivered
upon registration of transfer of, in exchange for or in lieu of other
Debentures of that series);
(3) the date or dates on which the principal of the
Debentures of that series is payable or the method of
determination thereof (including any provision for
shortening thereof);
(4) the rate or rates at which the Debentures of that
series shall bear interest, if any, or the manner of
calculation of such rate or rates;
(5) the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest will be payable or
the manner of determination of such Interest Payment Dates and the
record dates for the determination of holders to whom interest is
payable on any such Interest Payment Dates;
(6) the right of the Company, if any, to extend or
defer the interest payment periods and the duration of such
extension or deferral;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which Debentures of that series
may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or
purchase Debentures of that series pursuant to any sinking fund or
analogous provisions (including payments made in cash in anticipation
of future sinking fund obligations) or at the option of a holder
thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which, Debentures of that
series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
(9) the form of the Debentures of that series,
including the form of the Certificate of Authentication for
that series;
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(10) if denominations of other than $25 or any integral
multiple thereof, the denominations in which Debentures of
that series shall be issuable;
(11) whether the Debentures are issuable as a Global
Debenture and, in such case, the identity of the Depositary
for that series; and
(12) any and all other terms with respect to that series
(which terms shall not be inconsistent with the terms of this
Indenture).
All Debentures of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to any such Board Resolution or in any indentures supplemental
hereto.
If any of the terms of that series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officer's Certificate setting forth the terms of that series.
SECTION 2.02. The Debentures of any series and the Certificate
of Authentication to be borne by such Debentures shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution and as set forth in an Officer's Certificate,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Debentures of that series may be listed, or to
conform to usage.
SECTION 2.03. The Debentures shall be issuable as registered
Debentures and in denominations of $25 or any integral multiple thereof, subject
to Section 2.01(10). The Debentures of a particular series shall bear interest
payable on the dates and at the rate or rates specified with respect to that
series. The principal of and the interest on the Debentures of any series, as
well as any premium thereon in case of redemption thereof prior to maturity,
shall be payable in the coin or currency of the United States of America which
at the time is legal tender for public and private debt, at the office or agency
of the Company maintained for that purpose in the Borough of Manhattan, the City
and State of New York (which, unless changed, shall be a Corporate Trust Office
or agency of the Trustee). At the
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Company's option, payments on the Debentures of any series may also be made (i)
by checks mailed by the Trustee to the holders entitled thereto at their
registered addresses or (ii) to a holder of $1,000,000 or more in aggregate
principal amount of the Debentures who has delivered a written request to the
Trustee at least 14 days prior to the relevant Interest Payment Date electing to
have payments made by wire transfer to a designated account in the United
States, by wire transfer of immediately available funds to such designated
account; provided that, in either case, the payment of principal with respect to
any Debenture will be made only upon surrender of that Debenture to the Trustee.
Each Debenture shall be dated the date of its authentication. Interest on the
Debentures shall be computed on the basis of a 360-day year composed of twelve
30-day months and, for any period shorter than a full calendar month, on the
basis of the actual number of days elapsed in such period.
The interest installment on any Debenture which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name that
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Debenture of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on that Debenture will be paid upon presentation and surrender of that
Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of the same series (herein called "Defaulted Interest") shall
forthwith cease to be payable to the registered holder on the relevant regular
record date by virtue of having been such holder; and such Defaulted Interest
shall be paid by the Company, at its election, as provided in clause (1) or
clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Debenture and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory
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to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit
of the persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for the
payment of such Defaulted Interest which shall not be more than 15 nor
less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
special record date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be mailed, first-class postage
prepaid, to each Debentureholder at his or her address as it appears in
the Debenture Register (as hereinafter defined), not less than 10 days
prior to such special record date. Notice of the proposed payment of
such Defaulted Interest and the special record date therefor having
been mailed as aforesaid, such Defaulted Interest shall be paid to the
persons in whose names such Debentures (or their respective Predecessor
Debentures) are registered on such special record date and shall be no
longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on
any Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or
more indentures supplemental hereto establishing the terms of any series of
Debentures pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debentures with respect to any
Interest Payment Date for that series shall mean either the 15th day of the
month immediately preceding the month in which an Interest Payment Date
established for that series pursuant to Section 2.01 hereof shall occur, if such
Interest Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the 15th day of a month, whether or not such date is a Business
Day.
Subject to the foregoing provisions of this Section, each
Debenture of a series delivered under this Indenture upon transfer of or in
exchange for or in lieu of any other Debenture
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of such series shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Debenture.
SECTION 2.04. The Debentures shall, subject to the provisions
of Section 2.06, be printed on steel engraved borders or fully or partially
engraved, or legibly typed, as the proper officers of the Company may determine,
and shall be signed on behalf of the Company by its President or General
Manager, under its corporate seal attested by its Secretary or one of its
Assistant Secretaries. The signature of the President or General Manager and/or
the signature of the Secretary or an Assistant Secretary in attestation of the
corporate seal, upon the Debentures, may be in the form of a facsimile signature
of a present or any future President or General Manager and of a present or any
future Secretary or Assistant Secretary and may be imprinted or otherwise
reproduced on the Debentures and for that purpose the Company may use the
facsimile signature of any person who shall have been a President or General
Manager, or of any person who shall have been a Secretary or Assistant
Secretary, notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of that person shall have ceased to be
the President or General Manager, or the Secretary or an Assistant Secretary, of
the Company, as the case may be. The seal of the Company may be in the form of a
facsimile of the seal of the Company and may be impressed, affixed, imprinted or
otherwise reproduced on the Debentures.
Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate executed by the Trustee, or by any Authenticating Agent appointed by
the Trustee with respect to such Debentures, upon any Debenture executed by the
Company shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and made available for delivery hereunder and that the
holder is entitled to the benefits of this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures of any series
executed by the Company to the Trustee for authentication, together with a
written order of the Company for the authentication and delivery of such
Debentures, signed by its President or General Manager and its Treasurer or any
Assistant Treasurer, and the Trustee in accordance with such written order shall
authenticate and make available for delivery such Debentures.
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In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, (i) an Opinion of Counsel and (ii) an Officer's
Certificate, each stating that the form and terms thereof have been established
in conformity with the provisions of this Indenture. Each Opinion of Counsel and
Officer's Certificate delivered pursuant to this Section 2.04 shall include all
statements prescribed by Section 13.05(b) hereof.
The Trustee shall not be required to authenticate such
Debentures if the issue of such Debentures pursuant to this Indenture will, in
the good faith judgment of the Trustee, affect the Trustee's own rights, duties
or immunities under the Debentures and this Indenture or otherwise in a manner
that is not reasonably acceptable to the Trustee.
SECTION 2.05. (a) Debentures of any series may be exchanged
upon presentation thereof at the office or agency of the Company designated for
such purpose in the Borough of Manhattan, the City and State of New York, for
other Debentures of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax or
other governmental charge in relation thereto, all as provided in this Section.
In respect of any Debentures so surrendered for exchange, the Company shall
execute, the Trustee shall authenticate and such office or agency shall make
available for delivery in exchange therefor the Debenture or Debentures of the
same series which the Debentureholder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office
or agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company, a register
or registers (herein referred to as the "Debenture Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall register
the Debentures and the transfers of Debentures as in this Article provided and
which at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Debentures and transfer of Debentures
as herein provided shall be appointed as authorized by Board Resolution (the
"Debenture Registrar").
Upon surrender for transfer of any Debenture at the office or
agency of the Company designated for such purpose in the Borough of Manhattan,
the City and State of New York, the Company shall execute, the Trustee shall
authenticate and such office or agency shall make available for delivery in the
name of
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the transferee or transferees a new Debenture or Debentures of the same series
as the Debenture presented for a like aggregate principal amount.
All Debentures presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be accompanied (if
so required by the Company or the Debenture Registrar) by a written instrument
or instruments of transfer, in form satisfactory to the Company and the
Debenture Registrar, duly executed by the registered holder or by his duly
authorized attorney in writing.
(c) Except as provided in the first paragraph of Section 2.07,
no service charge shall be made for any exchange or registration of transfer of
Debentures, or issue of new Debentures in case of partial redemption of any
series, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, other than exchanges pursuant
to Section 2.06, the second paragraph of Section 3.03 and Section 9.04 not
involving any transfer.
(d) The Company shall neither be required (i) to issue,
exchange or register the transfer of any Debentures of any series during a
period beginning at the opening of business 15 days before the day of selection
for redemption of Debentures of that series and ending at the close of business
on the earliest date on which the relevant notice of redemption is deemed to
have been given to all holders of Debentures of that series to be redeemed, nor
(ii) to register the transfer of or exchange any Debentures of any series or
portions thereof called for redemption, except the unredeemed portion of any
Debentures being redeemed in part. The provisions of this Section 2.05 are, with
respect to any Global Debenture, subject to Section 2.11 hereof.
SECTION 2.06. Pending the preparation of definitive Debentures
of any series, the Company may execute, and the Trustee shall authenticate and
make available for delivery, temporary Debentures (printed, lithographed or
typewritten) of any authorized denomination, and substantially in the form of
the definitive Debentures in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Debentures, all as may be determined by the Company. Every temporary Debenture
of any series shall be executed by the Company and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Debentures of that series in accordance with the
terms of Section 2.04 hereof. Without unnecessary delay the Company will execute
and will furnish definitive Debentures of such series and thereupon any or all
temporary Debentures of that series may be surrendered in exchange therefor
(without charge to the holders), at the office
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or agency of the Company designated for the purpose in the Borough of Manhattan,
the City and State of New York, and the Trustee shall authenticate and such
office or agency shall make available for delivery in exchange for such
temporary Debentures an equal aggregate principal amount of definitive
Debentures of that series, unless the Company advises the Trustee to the effect
that definitive Debentures need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debentures of that
series shall be entitled to the same benefits under this Indenture as definitive
Debentures of that series authenticated and made available for delivery
hereunder.
SECTION 2.07. In case any temporary or definitive Debenture
shall become mutilated or be destroyed, lost or stolen, the Company (subject to
the next succeeding sentence) shall execute, and upon its request the Trustee
(subject as aforesaid) shall authenticate and make available for delivery, a new
Debenture of the same series bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Debenture, or in lieu of and in
substitution for the Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company and to the
Trustee such security or indemnity as may be required by them to save each of
them harmless and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicant's Debenture and
of the ownership thereof. The Trustee may authenticate any such substituted
Debenture and make available for delivery the same upon the written order of the
Company. Upon the issuance of any substituted Debenture, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. In case any Debenture
which has matured or is about to mature or has been called for redemption shall
become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Debenture, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Debenture) if the
applicant for such payment shall furnish to the Company and to the Trustee such
security or indemnity as they may require to save them harmless and, in case of
destruction, loss or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Debenture and of the ownership
thereof.
Every Debenture issued pursuant to the provisions of this
Section in substitution for any Debenture which is mutilated, destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the mutilated, destroyed, lost or stolen Debenture shall be found
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at any time, or be enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Debentures of the same series duly issued hereunder. All Debentures shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Debentures, and shall preclude (to the extent lawful) any and all
other rights or remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.08. All Debentures surrendered for the purpose of
payment, redemption, exchange or registration of transfer shall, if surrendered
to the Company or any paying agent, be delivered to the Trustee for
cancellation, or, if surrendered to the Trustee, shall be canceled by it, and no
Debentures shall be issued in lieu thereof except as expressly required or
permitted by any of the provisions of this Indenture. On request of the Company,
the Trustee shall deliver to the Company canceled Debentures held by the
Trustee. In the absence of such request the Trustee may dispose of canceled
Debentures in accordance with its standard procedures. If the Company shall
otherwise acquire any of the Debentures, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Debentures unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.09. Nothing in this Indenture or in the Debentures,
express or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and the holders of the Debentures,
any legal or equitable right, remedy or claim under or in respect of this
Indenture, or under any covenant, condition or provision herein contained; all
such covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Debentures.
SECTION 2.10. So long as any of the Debentures of any series
remain outstanding there may be an Authenticating Agent for any or all such
series of Debentures which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Debentures of such series issued upon exchange, transfer or partial
redemption thereof, and Debentures so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. All references in this Indenture to
the authentication of Debentures of any series by the Trustee shall be deemed to
include authentication by an Authenticating Agent
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for such series except for authentication upon original issuance or pursuant to
Section 2.07 hereof. Each Authenticating Agent shall be acceptable to the
Company and shall be a corporation which has a combined capital and surplus, as
most recently reported or determined by it, of $50 million, and which is
otherwise authorized under such laws to conduct a trust business and is subject
to supervision or examination by federal or state authorities. If at any time
any Authenticating Agent shall cease to be eligible in accordance with these
provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. (a) If the Company shall establish pursuant to
Section 2.01 that the Debentures of a particular series are to be issued as a
Global Debenture, then the Company shall execute and the Trustee shall, in
accordance with Section 2.04, authenticate and make available for delivery, a
Global Debenture which (i) shall represent, and shall be denominated in an
amount equal to the aggregate principal amount of, all of the Outstanding
Debentures of that series, (ii) shall be registered in the name of the
Depositary or its nominee, (iii) shall be made available for delivery by the
Trustee to the Depositary or pursuant to the Depositary's instruction and (iv)
shall bear a legend substantially to the following effect: "Except as otherwise
provided in Section 2.11 of the Indenture, this Debenture may be transferred, in
whole but not in part, only to another nominee of the Depositary or to a
successor Depositary or to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05 and except
as set forth in Section 2.11(c) or (d), the Global Debenture of a series may be
transferred, in whole but not in part and in the manner provided in Section
2.05, only to another nominee of the Depositary for that series, a successor
Depositary for that series selected or approved by the Company or a nominee of
that successor Depositary.
(c) (i) Subject to the terms established in one or
more indentures supplemental to this Indenture, an
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interest in any Global Debenture shall be
exchangeable at the option of the beneficial owner of
such interest in such Global Debenture for a
definitive Debenture or Debentures registered in the
name of any holder other than the Depositary or its
nominee at any time following issuance of such Global
Debenture.
(ii) A beneficial owner of an interest in any Global
Debenture desiring to exchange such beneficial
interest for a definitive Debenture or Debentures
shall instruct the Depositary, through the
Depositary's direct or indirect participants or
otherwise, to request such exchange on such
beneficial owner's behalf and to provide a written
order containing registration instructions to the
Trustee. Upon receipt by the Trustee of electronic or
written instructions from the Depositary on behalf of
such beneficial owner, the Trustee shall cause, in
accordance with the standing instructions and
procedures existing between the Trustee and the
Depositary, the aggregate principal amount of such
Global Debenture to be reduced by the principal
amount of such beneficial interest so exchanged and
shall appropriately reflect such reduction of the
aggregate principal amount of this Global Debenture
as described in paragraph (iii) of this Section
2.11(c). Following such reduction, the Trustee shall
authenticate and make available for delivery to such
beneficial owner of the transferee, as the case may
be, a definitive Debenture or Debentures previously
executed by the Company as described in Section
2.05(a) and registered in such names and authorized
denominations as the Depositary, pursuant to such
instructions of the beneficial owner, shall instruct
the Trustee.
(iii) Upon any exchange of a portion of any Global
Debenture for a definitive Debenture or Debentures,
the Debenture Registrar shall reflect the reduction
of the principal amount of such Global Debenture by
the principal amount of such beneficial interest so
exchanged on the Debenture Register. Until exchanged
in full for definitive Debentures, such Global
Debenture shall in all respects be entitled to the
same benefits under the Indenture as the definitive
Debentures authenticated and delivered hereunder.
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(d) (i) Subject to the terms established in one or
more indentures supplemental to this Indenture, if
and so long as the Debentures of any series are
issued as a Global Debenture, any definitive
Debenture or Debentures of such series shall be
exchangeable at the option of the registered
holder thereof for a beneficial interest in such
Global Debenture at any time following the
exchange of such Global Debenture for such
definitive Debenture or Debentures pursuant to
Section 2.11(c).
(ii) A registered holder of a definitive Debenture or
Debentures desiring to exchange such definitive
Debenture or Debentures for a beneficial interest in
such Global Debenture shall instruct the Depositary,
through the Depositary's direct or indirect
participants or otherwise, to request such exchange
on such registered holder's behalf and to provide a
written order containing registration instructions to
the Trustee. Upon receipt by the Trustee of
electronic or written instructions from the
Depositary, and upon presentation to the Trustee of
such definitive Debenture or Debentures, the Trustee
shall cause, in accordance with the standing
instructions and procedures existing between the
Trustee and the Depositary, the aggregate principal
amount of such Global Debenture to be increased by
the principal amount of such definitive Debenture or
Debentures so exchanged and shall appropriately
reflect such increase of the aggregate principal
amount of the Global Debenture as described in
paragraph (iii) of this Section 2.11(d).
(iii) Upon any exchange of a definitive Debenture or
Debentures for a beneficial interest in such Global
Debenture, the Debenture Registrar shall reflect the
increase of the principal amount of such Global
Debenture by the principal amount of such definitive
Debenture or Debentures so exchanged on the Debenture
Register.
(e) If at any time the Depositary for a series of Debentures
notifies the Company that it is unwilling or unable to continue as Depositary
for that series or if at any time the Depositary for that series shall no longer
be registered or in good standing under the Exchange Act or other applicable
statute or regulation and a successor Depositary for that series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the
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case may be, this Section 2.11 shall no longer apply to the Debentures of that
series and the Company will execute and, subject to Section 2.05, the Trustee
will authenticate and make available for delivery Debentures of that series in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Debenture of that series in exchange for such Global Debenture. In addition, the
Company may at any time determine that the Debentures of any series shall no
longer be represented by a Global Debenture and that the provisions of this
Section 2.11 shall no longer apply to the Debentures of that series. In that
event the Company will execute and, subject to Section 2.05, the Trustee, upon
receipt of an Officer's Certificate evidencing such determination by the
Company, will authenticate and make available for delivery Debentures of that
series in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture of such series in exchange for such Global
Debenture. Upon the exchange of the Global Debenture for such Debentures in
definitive registered form without coupons, in authorized denominations, the
Global Debenture shall be canceled by the Trustee. Such Debentures in definitive
registered form issued in exchange for the Global Debenture pursuant to this
Section 2.11(e) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Debenture Registrar. The
Trustee shall make available for delivery such Debentures to the Depositary for
delivery to the persons in whose names such Debentures are so registered.
SECTION 2.12. If specified as contemplated by Section 2.01
with respect to the Debentures of a particular series, the Company shall have
the right to shorten the maturity of the principal of the Debentures of such
series at any time to any date, provided that, if the Company elects to exercise
its right to shorten the maturity of the principal of the Debentures of such
series, at the time such election is made and at the time of such shortening,
such conditions as may be specified in such Debentures shall have been
satisfied.
SECTION 2.13. The Company in issuing the Debentures may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Debentures or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Debentures, and any such redemption shall
not be affected by any defect in or
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omission of such numbers. The Company will promptly notify the
Trustee of any change in the CUSIP numbers.
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions
SECTION 3.01. The Company may redeem the Debentures of any
series issued hereunder on and after the dates and in accordance with the terms
established for that series pursuant to Section 2.01 hereof.
SECTION 3.02. (a) In case the Company shall desire to exercise
such right to redeem all or, as the case may be, a portion of the Debentures of
any series in accordance with the right reserved so to do, it shall give notice
of such redemption to holders of the Debentures of the series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than
30 days and not more than 60 days before the date fixed for redemption of that
series to such holders at their last addresses as they shall appear upon the
Debenture Register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly to give such
notice to the holder of any Debenture of any series designated for redemption in
whole or in part, or any defect in the notice, shall not affect the validity of
the proceedings for the redemption of any other Debentures of that series or any
other series. In the case of any redemption of Debentures prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officer's Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall specify the CUSIP number,
if any, of Debentures being redeemed, the date fixed for redemption and the
redemption price at which Debentures of that series are to be redeemed, and
shall state that payment of the redemption price of the Debentures to be
redeemed will be made at the office or agency of the Company in the Borough of
Manhattan, the City and State of New York, upon presentation and surrender of
such Debentures, that interest accrued to the date fixed for redemption will be
paid as specified in that notice, that from and after that date interest will
cease to accrue, and that the redemption is for a sinking fund, if such is the
case. If less than all the Debentures of a series are to be redeemed, the notice
to the holders of Debentures of that series to be redeemed shall specify the
particular Debentures to be so redeemed. In case any Debenture is to be redeemed
in part only, the notice which relates to such Debenture shall state the portion
of the principal amount thereof to be redeemed, and shall state that on and
after the redemption date, upon surrender of such Debenture,
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a new Debenture or Debentures of that series in principal amount equal to the
unredeemed portion thereof will be issued.
(b) The Company shall give the Trustee at least 45 days'
advance notice of the date fixed for redemption (unless shorter notice shall be
required by the Trustee) as to the aggregate principal amount of Debentures of
the series to be redeemed, and if less than the entire aggregate principal
amount of such series is to be redeemed, thereupon the Trustee shall select, by
lot or in such other manner as it shall deem appropriate and fair in its
discretion and which may provide for the selection of a portion or portions
(equal to $25 or any integral multiple thereof) of the principal amount of such
Debentures of a denomination larger than $25, the Debentures to be redeemed and
shall thereafter promptly notify the Company in writing of the numbers of the
Debentures to be redeemed.
The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its President or General
Manager, instruct the Trustee or any paying agent to call all or any part of the
Debentures of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Debenture Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.03. (a) If the giving of notice of redemption shall
have been completed as above provided, the Debentures or portions of Debentures
of the series to be redeemed specified in such notice shall become due and
payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for
redemption, and interest on such Debentures or portions of Debentures shall
cease to accrue on and after the date fixed for redemption, unless the Company
shall default in the payment of such redemption price and accrued interest with
respect to any such Debenture or portion thereof. On presentation and surrender
of such Debentures on or after the date fixed for redemption at the place of
payment specified in the notice, such Debentures shall be paid and redeemed at
the applicable redemption price for such series, together with interest accrued
thereon to the date fixed for redemption (but if the date fixed for redemption
is an interest payment date, the interest installment payable on such
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date shall be payable to the registered holder at the close of business on the
applicable record date pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is
to be redeemed in part only, the Company shall execute, the Trustee shall
authenticate and the office or agency where the Debenture is presented shall
make available for delivery to the holder thereof, at the expense of the
Company, a new Debenture or Debentures of the same series, of authorized
denominations in principal amount equal to the unredeemed portion of the
Debenture so presented.
SECTION 3.04. The provisions of Sections 3.04, 3.05 and 3.06
shall apply to any sinking fund for the retirement of Debentures of a series,
except as otherwise specified as contemplated by Section 2.01 for Debentures of
that series.
The minimum amount of any sinking fund payment provided for by
the terms of Debentures of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount provided
for by the terms of Debentures of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Debentures of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 3.05. Each sinking fund payment shall be
applied to the redemption of Debentures of any series as provided for by the
terms of Debentures of that series.
SECTION 3.05. The Company (i) may deliver Outstanding
Debentures of a series (other than any previously called for redemption) and
(ii) may apply as a credit Debentures of a series which have been redeemed
either at the election of the Company pursuant to the terms of such Debentures
or through the application of permitted optional sinking fund payments pursuant
to the terms of such Debentures, in each case in satisfaction of all or any part
of any sinking fund payment with respect to the Debentures of such series
required to be made pursuant to the terms of such Debentures as provided for by
the terms of that series; provided that such Debentures have not been previously
so credited. Such Debentures shall be received and credited for such purpose by
the Trustee at the redemption price specified in such Debentures for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 3.06. Not less than 45 days prior to each sinking fund
payment date for any series of Debentures, the Company will deliver to the
Trustee an Officer's Certificate specifying the amount of the next ensuing
sinking fund payment for that series pursuant to the terms of that series, the
portion
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thereof, if any, which is to be satisfied by delivering and crediting Debentures
of that series pursuant to Section 3.05 and the basis for such credit and will,
together with such Officer's Certificate, deliver to the Trustee any Debentures
to be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Debentures to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.02 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 3.02. Such notice having been duly
given, the redemption of such Debentures shall be made upon the terms and in the
manner stated in Section 3.03.
ARTICLE FOUR
Particular Covenants of the Company
The Company covenants and agrees for each series of the
Debentures as follows:
SECTION 4.01. The Company will duly and punctually pay or
cause to be paid the principal of (and premium, if any) and interest on the
Debentures (subject to the Company's right to extend or defer an Interest
Payment Date) of that series at the time and place and in the manner provided
herein and established with respect to such Debentures.
SECTION 4.02. So long as any series of the Debentures remains
outstanding, the Company agrees to maintain an office or agency in the Borough
of Manhattan, the City and State of New York (which, unless changed, shall be a
corporate trust office or agency of the Trustee), with respect to each such
series and at such other location or locations as may be designated as provided
in this Section 4.02, where (i) Debentures of that series may be presented for
payment, (ii) Debentures of that series may be presented as hereinabove
authorized for registration of transfer and exchange and (iii) notices and
demands to or upon the Company in respect of the Debentures of that series and
this Indenture may be given or served, such designation to continue with respect
to such office or agency until the Company shall, by written notice signed by
its President or General Manager and delivered to the Trustee, designate some
other office or agency for such purposes or any of them. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, notices and demands.
SECTION 4.03. (a) If the Company shall appoint one or
more paying agents, other than the Trustee, for all or any series
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of the Debentures, the Company will cause each such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section, that it will:
(1) hold all sums held by it as such agent for the payment of
the principal of (and premium, if any) or interest on the Debentures of
that series (whether such sums have been paid to it by the Company or
by any other obligor of such Debentures) in trust for the benefit of
the persons entitled thereto;
(2) give the Trustee notice of any failure by the Company (or
by any other obligor of such Debentures) to make any payment of the
principal of (and premium, if any) or interest on the Debentures of
that series when the same shall be due and payable;
(3) at any time during the continuance of any failure referred
to in the preceding paragraph (a)(2) above, upon the written request of
the Trustee, forthwith pay to the Trustee all sums so held in trust by
such paying agent; and
(4) perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with
respect to any series of the Debentures, it will, on or before each due date of
the principal of (and premium, if any) or interest on Debentures of that series,
set aside, segregate and hold in trust for the benefit of the persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest
so becoming due on Debentures of that series until such sums shall be paid to
such persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure (by it or any other obligor on
such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of Debentures, it will, prior to each due date
of the principal of (and premium, if any) or interest on any Debentures of that
series, deposit with the paying agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding,
(i) the agreement to hold sums in trust as provided in this Section is subject
to the provisions of Section 11.06 and (ii) the Company may at any time, for the
purpose of
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obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in
trust by the Company or such paying agent, such sums to be held by the Trustee
upon the same terms and conditions as those upon which such sums were held by
the Company or such paying agent; and, upon such payment by any paying agent to
the Trustee, such paying agent shall be released from all further liability with
respect to such sums.
SECTION 4.04. The Company, whenever necessary to avoid or fill
a vacancy in the office of Trustee, will appoint, in the manner provided in
Section 7.10, a Trustee, so that there shall at all times be a Trustee
hereunder.
SECTION 4.05. The Company will not, while any of the
Debentures remain outstanding, consolidate with, merge into, merge into itself
or sell or convey all or substantially all of its property to any other company,
unless the provisions of Article Ten hereof are complied with.
SECTION 4.06. If there shall have occurred any event that
would, with the giving of notice or the passage of time, or both, constitute an
Event of Default under the Indenture, or the Company shall have given notice of
its selection of an extended interest payment period as provided in the
Indenture and such period, or any extension thereof, shall be continuing, the
Company will not, until all defaulted interest on the Debentures and all
interest accrued on the Debentures during an extended interest payment period
and all principal and premium, if any, then due and payable on the Debentures
shall have been paid in full, (i) declare, set aside or pay any dividend or
distribution on any capital stock of the Company, except for dividends or
distributions in shares of its capital stock or in rights to acquire shares of
its capital stock, or (ii) repurchase, redeem or otherwise acquire, or make any
sinking fund payment for the purchase or redemption of, any shares of its
capital stock (except by conversion into or exchange for shares of its capital
stock and except for a redemption, purchase or other acquisition of shares of
its capital stock made for the purpose of an employee incentive plan or benefit
plan of the Company or any of its subsidiaries, if any, and except for mandatory
redemption or sinking fund payments with respect to any series of preferred
stock of the Company that are subject to mandatory redemption or sinking fund
requirements, provided that the aggregate stated value of all such series
outstanding at the time of any such payment does not exceed five percent of the
aggregate of (1) the total principal amount of all bonds or other securities
representing secured indebtedness issued or assumed by the Company and then
outstanding and (2) the capital and surplus of the Company to be stated on the
books of account of the Company after giving effect to such payment); provided,
however, that any
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moneys deposited in any sinking fund and not in violation of this provision may
thereafter be applied to the purchase or redemption of such preferred stock in
accordance with the terms of such sinking fund without regard to the
restrictions contained in this Section.
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee
SECTION 5.01. The Company will furnish or cause to be
furnished to the Trustee (a) on a quarterly basis on each regular record date
(as defined in Section 2.03) a list, in such form as the Trustee may reasonably
require, of the names and addresses of the holders of each series of Debentures
as of such regular record date; provided that the Company shall not be obligated
to furnish or cause to furnish such list at any time that the list shall not
differ in any respect from the most recent list furnished to the Trustee by the
Company and (b) at such other times as the Trustee may request in writing within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished; provided, however, no such list need be furnished for any series
for which the Trustee shall be the Debenture Registrar.
SECTION 5.02. (a) The Trustee shall preserve, in as current a
form as is reasonably practicable, all information as to the names and addresses
of the holders of Debentures contained in the most recent list furnished to it
as provided in Section 5.01 and as to the names and addresses of holders of
Debentures received by the Trustee in its capacity as Debenture Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it
as provided in Section 5.01 upon receipt of a new list so
furnished.
(c) In case three or more holders of Debentures of a series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant owns and has
owned a Debenture for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debentures of that series or holders of all
Debentures with respect to their rights under this Indenture or under such
Debentures, and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either:
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(1) afford to such applicants access to the
information preserved at the time by the Trustee in
accordance with the provisions of Section 5.02(a); or
(2) inform such applicants as to the approximate number of
holders of Debentures of such series or of all Debentures, as the case
may be, whose names and addresses appear in the information preserved
at the time by the Trustee, in accordance with the provisions of
Section 5.02(a), and as to the approximate cost of mailing to such
Debentureholders the form of proxy or other communication, if any,
specified in such application.
(d) If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of that series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of Section 5.02(a), a copy of
the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Securities and Exchange Commission (the
"Commission"), together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of Debentures of that series or
of all Debentures, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise, the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any paying agent nor any Debenture Registrar shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the holders of Debentures in accordance with the
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provisions of Section 5.02(c), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 5.02(c).
SECTION 5.03. (a) The Company covenants and agrees to file
with the Trustee, within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe)
which the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of such
sections, then to file with the Trustee and the Commission, in accordance with
the rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations prescribed from
time to time by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to time by
such rules and regulations. Delivery of such reports, documents and information
to the Trustee under this subsection (b) and Section 5.03(a) is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officer's Certificate).
(c) The Company covenants and agrees to transmit by mail,
first-class postage prepaid, or reputable overnight delivery service which
provides for evidence of receipt, to the Debentureholders, as their names and
addresses appear upon the Debenture Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to Section 5.03(a) and (b)
as may be required by rules and regulations prescribed from time to time by the
Commission.
(d) The Company covenants and agrees to furnish to the
Trustee, on or before ___________ in each calendar year in which any of the
Debentures are outstanding, or on or before such other
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day in each calendar year as the Company and the Trustee may from time to time
agree upon, a Certificate as to his or her knowledge of the Company's compliance
with all conditions and covenants under this Indenture. For purposes of this
subsection (d), such compliance shall be determined without regard to any period
of grace or requirement of notice provided under this Indenture.
(e) The Company covenants and agrees, during any calendar year
in which original issue discount has accrued on Outstanding Debentures, to file
with the Trustee promptly at the end of each such calendar year a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Outstanding Debentures as of the end of such year.
SECTION 5.04. (a) On or before ____________ in each year in
which any of the Debentures are outstanding, the Trustee shall transmit by mail,
first-class postage prepaid, to the Debentureholders, as their names and
addresses appear upon the Debenture Register, a brief report dated as of the
preceding _________, with respect to any of the following events which may have
occurred within the previous 12 months (but if no such event has occurred within
such period no report need be transmitted):
(1) any change to its eligibility under Section 7.09,
and its qualifications under Section 7.08;
(2) the creation of or any material change to a
relationship specified in paragraphs (1) through (10) of
Section 7.08(c);
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Debentures, on any
property or funds held or collected by it as Trustee if such advances
so remaining unpaid aggregate more than 1/2 of 1% of the principal
amount of the Debentures outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date
of all other indebtedness owing by the Company, or by any other obligor
on the Debentures, to the Trustee in its individual capacity, on the
date of such report, with a brief description of any property held as
collateral security therefor, except any indebtedness based upon a
creditor relationship arising in any manner described in paragraphs
(2), (3), (4) or (6) of Section 7.13(b);
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(5) any change to the property and funds, if any,
physically in the possession of the Trustee as such on the
date of such report;
(6) any release, or release and substitution, of property
subject to the lien, if any, of this Indenture (and the consideration
thereof, if any) which it has not previously reported;
(7) any additional issue of Debentures which the
Trustee has not previously reported; and
(8) any action taken by the Trustee in the performance of its
duties under this Indenture which it has not previously reported and
which in its opinion materially affects the Debentures or the
Debentures of any series, except any action in respect of a default,
notice of which has been or is to be withheld by it in accordance with
the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first-class postage
prepaid, to the Debentureholders, as their names and addresses appear upon the
Debenture Register, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee as such since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this Indenture), for the reimbursement of which it claims or may
claim a lien or charge prior to that of the Debentures of any series on property
or funds held or collected by it as Trustee, and which it has not previously
reported pursuant to this subsection if such advances remaining unpaid at any
time aggregate more than 10% of the principal amount of Debentures of such
series outstanding at such time, such report to be transmitted within 90 days
after such time.
(c) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with the Company, with
each stock exchange upon which any Debentures are listed (if so listed) and also
with the Commission. The Company agrees to notify the Trustee when any
Debentures become listed on any stock exchange.
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
SECTION 6.01. (a) Whenever used herein with respect
to Debentures of a particular series, "Event of Default" means
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any one or more of the following events which has occurred and is
continuing:
(1) default in the payment of any installment of interest upon
any of the Debentures of that series, as and when the same shall become
due and payable, and continuance of such default for a period of 60
days (subject to the Company's right, if any, to extend or defer an
Interest Payment Date pursuant to Section 2.01 hereof);
(2) default in the payment of the principal of (or premium, if
any, on) any of the Debentures of that series as and when the same
shall become due and payable, whether at maturity, upon redemption, by
declaration or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series, and continuance
of such default for a period of 3 days;
(3) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company with respect to that series contained in such Debentures or
otherwise established with respect to that series of Debentures
pursuant to Section 2.01 hereof or contained in this Indenture (other
than a covenant or agreement which has been expressly included in this
Indenture solely for the benefit of one or more series of Debentures
other than such series) for a period of 90 days after the date on which
written notice of such failure, requiring the same to be remedied and
stating that such notice is a "Notice of Default" hereunder, shall have
been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee by the holders of at least 33%
in principal amount of the Debentures of that series at the time
outstanding;
(4) a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
liquidation or reorganization of the Company under the Federal
Bankruptcy Code or any other similar applicable federal or state law,
and such decree or order shall have continued unvacated and unstayed
for a period of 90 days; an involuntary case shall be commenced under
such Code in respect of the Company and shall continue undismissed for
a period of 90 days or an order for relief in such case shall have been
entered; or a decree or order of a court having jurisdiction in the
premises shall have been entered for the appointment on the ground of
insolvency or bankruptcy of a receiver, custodian, liquidator, trustee
or assignee in bankruptcy or insolvency of the Company or of its
property, or for the winding up or liquidation of its
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affairs, and such decree or order shall have remained in
force unvacated and unstayed for a period of 90 days; or
(5) the Company shall institute proceedings to be adjudicated
a voluntary bankrupt, shall consent to the filing of a bankruptcy
proceeding against it, shall file a petition or answer or consent
seeking liquidation or reorganization under the Federal Bankruptcy Code
or other similar applicable federal or state law, shall consent to the
filing of any such petition or shall consent to the appointment on the
ground of insolvency or bankruptcy of a receiver or custodian or
liquidator or trustee or assignee in bankruptcy or insolvency of it or
of its property, or shall make an assignment for the benefit of
creditors.
(b) In each and every such case, the Company shall file with
the Trustee written notice of the occurrence of any Event of Default within five
Business Days of the Company's becoming aware of any such Event of Default, and
unless the principal of all the Debentures of that series shall have already
become due and payable, either the Trustee or the holders of not less than 33%
in aggregate principal amount of the Debentures of that series then outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Debentureholders), may declare the principal of all the Debentures of that
series to be due and payable immediately, and upon any such declaration the same
shall become and shall be immediately due and payable, anything contained in
this Indenture or in the Debentures of that series or established with respect
to that series pursuant to Section 2.01 hereof to the contrary notwithstanding.
(c) The provisions of subsection (b) of this Section, however,
are subject to the condition that if, at any time after the principal of the
Debentures of that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Debentures of that series and the principal of (and
premium, if any, on) any and all Debentures of that series which shall have
become due otherwise than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that such payment is enforceable under
applicable law, upon overdue installments of interest, at the rate per annum
expressed in the Debentures of that series to the date of such payment or
deposit) and the amount payable to the Trustee under Section 7.06, and any and
all defaults under the Indenture, other than the nonpayment of principal on
Debentures of that series which shall not have become due by their terms, shall
have been remedied or, alternatively, waived as provided in
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Section 6.06, then and in every such case the Event or Events of Default giving
rise to the declaration of acceleration will, without further act, be deemed to
have been rescinded and annulled; but no such rescission and annulment shall
extend to or shall affect any subsequent default, or shall impair any right
consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any
right with respect to Debentures of that series under this Indenture and such
proceedings shall have been discontinued or abandoned because of such rescission
or annulment or for any other reason or shall have been determined adversely to
the Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
SECTION 6.02. (a) The Company covenants that (1) in case
default shall be made in the payment of any installment of interest on any of
the Debentures of a series, and such default shall have continued for a period
of 60 days, or (2) in case default shall be made in the payment of the principal
of (or premium, if any, on) any of the Debentures of a series when the same
shall have become due and payable, and such default shall continue for a period
of 3 days, whether upon maturity of the Debentures of a series or upon
redemption or upon declaration or otherwise, or in any payment required by any
sinking or analogous fund established with respect to that series as and when
the same shall have become due and payable, then, upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the
Debentures of that series, the whole amount that then shall have become due and
payable on all such Debentures for principal (and premium, if any) or interest,
or both, as the case may be, with interest upon the overdue principal (and
premium, if any) and (to the extent that payment of such interest is enforceable
under applicable law) upon overdue installments of interest at the rate per
annum expressed in the Debentures of that series; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, and the amount payable to the Trustee under Section 7.06.
(b) In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
other obligor upon the Debentures of that series and collect
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in the manner provided by law out of the property of the Company or other
obligor upon the Debentures of that series wherever situated the moneys adjudged
or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or other
judicial proceedings affecting the Company, any other obligor on such Debentures
or the creditors or property of either, the Trustee shall have power to
intervene in such proceedings and take any action therein that may be permitted
by the court and shall (except as may be otherwise provided by law) be entitled
to file such proofs of claim and other papers and documents as may be necessary
or advisable in order to have the claims of the Trustee and of the holders of
Debentures of such series allowed for the entire amount due and payable by the
Company or such other obligor under the Indenture at the date of institution of
such proceedings and for any additional amount which may become due and payable
by the Company or such other obligor after such date, and to collect and receive
any moneys or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Debentures of that
series to make such payments to the Trustee, and, in the event that the Trustee
shall consent to the making of such payments directly to such Debentureholders,
to pay to the Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Debentures of
that series, may be enforced by the Trustee without the possession of any of
such Debentures, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for payment to the Trustee of any
amounts due under Section 7.06, be for the ratable benefit of the holders of the
Debentures of that series.
In case of an Event of Default hereunder, the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law, in
equity, in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in the Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
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Nothing herein contained shall be deemed to authorize the
Trustee to authorize, consent to, accept or adopt on behalf of any
Debentureholder any plan of reorganization, arrangement, adjustment or
composition affecting the Debentures of that series or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Debentureholder in any such proceeding.
SECTION 6.03. Any moneys collected by the Trustee pursuant to
Section 6.02 with respect to a particular series of Debentures shall be applied
in the order following, at the date or dates fixed by the Trustee and, in case
of the distribution of such moneys on account of principal (or premium, if any)
or interest, upon presentation of the several Debentures of that series, and
stamping thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses of
collection and of all amounts payable to the Trustee
under Section 7.06;
SECOND: To the payment of the amounts then due and unpaid upon
Debentures of that series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Debentures for
principal (and premium, if any) and interest, respectively; and
THIRD: To the Company.
SECTION 6.04. No holder of any Debenture of any series shall
have any right by virtue or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless such holder previously shall have
given to the Trustee written notice of an Event of Default and of the
continuance thereof with respect to Debentures of that series specifying such
Event of Default, as hereinbefore provided, and unless also the holders of not
less than 33% in aggregate principal amount of the Debentures of such series
then outstanding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as trustee hereunder and shall
have offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity, shall have failed to institute any such action, suit or proceeding;
it being understood and intended, and
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being expressly covenanted by the taker and holder of every Debenture of that
series with every other such taker and holder and the Trustee, that no one or
more holders of Debentures of that series shall have any right in any manner
whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such
Debentures, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Debentures of that series. For the protection and enforcement of the
provisions of this Section, each and every Debentureholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provisions of this Indenture,
however, the right of any holder of any Debenture to receive payment of the
principal of (and premium, if any) and interest on such Debenture, as therein
provided, on or after the respective due dates expressed in such Debenture (or
in the case of redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such holder.
SECTION 6.05. (a) All powers and remedies given by this
Article to the Trustee or to the Debentureholders shall, to the extent permitted
by law, be deemed cumulative and not exclusive of any others thereof or of any
other powers and remedies available to the Trustee or the holders of the
Debentures, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Debentures.
(b) No delay or omission of the Trustee or of any holder of
any of the Debentures to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed as a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
SECTION 6.06. The holders of a majority in aggregate principal
amount of the Debentures of any series at the time outstanding, determined in
accordance with Section 8.04, shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or
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exercising any trust or power conferred on the Trustee with respect to that
series; provided, however, that such direction shall not be in conflict with any
rule of law or with this Indenture or unduly prejudicial to the rights of
holders of Debentures of any other series at the time outstanding determined in
accordance with Section 8.04 not parties thereto. Subject to the provisions of
Section 7.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed might involve
the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Debentures of each series at the time outstanding
affected thereby, determined in accordance with Section 8.04, may on behalf of
the holders of all of the Debentures of that series waive any past default in
the performance of any of the covenants contained herein or established pursuant
to Section 2.01 with respect to that series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest on,
any of the Debentures of that series as and when the same shall become due by
the terms of such Debentures or a call for redemption of Debentures of that
series, which default may be waived by the unanimous consent of the holders of
that series so affected. Upon any such waiver, the default covered thereby shall
be deemed to be cured for all purposes of this Indenture and the Company, the
Trustee and the holders of the Debentures of that series shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 6.07. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series, transmit by mail,
first class postage prepaid, to the holders of Debentures of that series, as
their names and addresses appear upon the Debenture Register, notice of all
defaults with respect to that series known to the Trustee, unless such defaults
shall have been cured or waived before the giving of such notice (the term
"defaults" for the purposes of this Section being hereby defined to be the
events specified in subsections (1), (2), (3), (4) and (5) of Section 6.01(a),
not including any grace periods provided for therein and irrespective of the
giving of notice provided for by subsection (3) of Section 6.01(a)); provided,
that, except in the case of default in the payment of the principal of (or
premium, if any) or interest on any of the Debentures of that series or in the
payment of any sinking fund installment established with respect to that series,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the holders of Debentures of
that series;
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provided further, that in the case of any default of the character specified in
Section 6.01(a)(3) with respect to Debentures of that series, no such notice to
the holders of the Debentures of that series shall be given until at least 30
days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any
default, except (i) a default under Section 6.01(a)(1) or (a)(2) as long as the
Trustee is acting as paying agent for such series of Debentures or (ii) any
default as to which the Trustee shall have received written notice or a
Responsible Officer charged with the administration of this Indenture shall have
actual knowledge or obtained written notice.
SECTION 6.08. All parties to this Indenture agree, and each
holder of any Debentures by his or her acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, any suit instituted by any Debentureholder, or group
of Debentureholders, holding more than 10% in aggregate principal amount of the
outstanding Debentures of any series, or any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established pursuant to this
Indenture.
ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. (a) The Trustee, prior to the occurrence of an
Event of Default with respect to Debentures of a series and after the curing of
all Events of Default with respect to Debentures of that series which may have
occurred, shall undertake to perform with respect to Debentures of that series
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to Debentures of a series
has occurred (which has not been cured or waived), the Trustee shall exercise
with respect to Debentures of that series such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill
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in their exercise, as a prudent individual would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with
respect to Debentures of a series and after the curing and waiving of
all such Events of Default with respect to that series which may have
occurred:
(i) the duties and obligations of the Trustee shall
with respect to Debentures of that series be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable with respect to Debentures of that series except for the
performance of such duties and obligations as are specifically set
forth in this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to Debentures of that series
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein);
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal
amount of the Debentures of any series at the time outstanding relating
to the time, method and place of conducting
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any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Indenture with
respect to the Debentures of that series; and
(4) none of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
or risk personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not reasonably
assured to it.
(c) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section 7.01.
SECTION 7.02. Except as otherwise provided in
Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution or an
instrument signed in the name of the Company by the President or General
Manager, the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer (unless other evidence in respect thereof is specifically
prescribed herein);
(c) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) is entitled to receive and may, in
the absence of bad faith on its part, rely upon an Officer's Certificate;
(d) The Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection
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in respect of any action taken or suffered or omitted hereunder
in good faith and in reliance thereon;
(e) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing herein contained shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to a series of the Debentures (which has not been cured
or waived) to exercise with respect to Debentures of that series such of the
rights and powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(f) If an Event of Default shall have occurred and be
continuing, the Trustee shall be under no obligation to follow any request,
order or direction of the Company if in the reasonable judgment of the Trustee
the following of such request, order or direction would not be in the best
interests of all the holders;
(g) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture;
(h) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
security, or other papers or documents, unless requested in writing to do so by
the holders of not less than a majority in principal amount of the outstanding
Debentures of the particular series affected thereby (determined as provided in
Section 8.04); provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding. The reasonable expense
of every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand;
(i) The Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
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or by or through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(j) Any application by the Trustee for written instructions
from the Company may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and
the date on and/or after which such action shall be taken or such omission shall
be effective. The Trustee shall not be liable for any action or omission of the
Trustee in accordance with a proposal included in such application on or after
the date specified in such application (which date shall not be less than three
Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
SECTION 7.03. (a) The recitals contained herein and in the
Debentures (other than the Certificate of Authentication on the Debentures)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Debentures or of the proceeds of the
Debentures, or for the use or application of any moneys paid over by the Trustee
in accordance with any provision of this Indenture or established pursuant to
Section 2.01, or for the use or application of any moneys received by any paying
agent other than the Trustee.
SECTION 7.04. The Trustee or any paying agent or Debenture
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Debentures with the same rights it would have if it were not Trustee,
paying agent or Debenture Registrar.
SECTION 7.05. Subject to the provisions of Section 11.06, all
moneys received by the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
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SECTION 7.06. (a) The Company covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled to, such
compensation as the Company and the Trustee may agree upon in writing (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
the Trustee (and its officers, agents, directors and employees) for, and to hold
it harmless against, any loss, damage, claim, liability or expense including
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee) incurred without negligence or bad faith on the part of the Trustee
and arising out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending itself against any
claim of liability in the premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the termination of this Indenture. Such additional
indebtedness shall be a senior lien to that of the Debentures upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Debentures, and the Debentures are
hereby subordinated to each such senior lien.
(c) When the Trustee incurs expenses or renders services in
connection with an Event of Default, the expenses (including the reasonable
charges and expenses of its counsel) and compensation for its services are
intended to constitute expenses of administration under applicable federal or
state bankruptcy, insolvency or similar law.
SECTION 7.07. Except as otherwise provided in Section 7.01,
whenever in the administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or suffering or omitting to take any action hereunder, it shall
be entitled to receive, and such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to
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be conclusively provided and established by an Officer's Certificate delivered
to the Trustee and such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted to be taken by it under the provisions of this
Indenture upon the faith thereof.
SECTION 7.08. If the Trustee has acquired or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.
SECTION 7.09. There shall at all times be a Trustee with
respect to the Debentures issued hereunder which shall at all times be a
corporation organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of Columbia, or a
corporation or other person permitted to act as trustee by the Commission,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million dollars, and subject to supervision
or examination by Federal, State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. The
Company may not, nor may any person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 7.10.
SECTION 7.10. (a) The Trustee or any successor hereafter
appointed may at any time resign with respect to the Debentures of one or more
series by giving written notice thereof to the Company and by transmitting
notice of resignation by mail, first-class postage prepaid, to the
Debentureholders of that series, as their names and addresses appear upon the
Debenture Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee with respect to Debentures of that series
by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the
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resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee with respect to Debentures of that series, or
any Debentureholder of that series who has been a bona fide holder of a
Debenture or Debentures for at least six months may, subject to the provisions
of Section 6.08, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall
occur:
(1) the Trustee shall fail to comply with the provisions of
Section 7.08 after written request therefor by the Company or by any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.09 and shall fail to resign after written
request therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, shall be
adjudged a bankrupt or insolvent, a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee with respect to all
Debentures and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 6.08, unless the Trustee's duty to
resign is stayed as provided herein, any Debentureholder who has been a bona
fide holder of a Debenture or Debentures for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Debentures of any series at the time outstanding may at any time remove the
Trustee with respect to that series and appoint a successor trustee.
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(d) Any resignation or removal of the Trustee and appointment
of a successor trustee with respect to the Debentures of a series pursuant to
any of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section
may be appointed with respect to the Debentures of one or more series or all of
such series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
SECTION 7.11. (a) In case of the appointment hereunder of a
successor trustee with respect to all Debentures, every such successor trustee
so appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights, powers, and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
trustee all property and money held by such retiring Trustee hereunder, subject
to any prior lien provided for in Section 7.06(b).
(b) In case of the appointment hereunder of a successor
trustee with respect to the Debentures of one or more (but not all) series, the
Company, the retiring Trustee and each successor trustee with respect to the
Debentures of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment
and which shall (1) contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debentures of that or those series to which the appointment of such successor
trustee relates, (2) contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Debentures of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee and (3) add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust, that each such Trustee shall be trustee of a
trust or
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trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and that no Trustee shall be responsible
for any act or failure to act on the part of any other Trustee hereunder; and
upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent provided
therein, such retiring Trustee shall with respect to the Debentures of that or
those series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, and each such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of that or those series
to which the appointment of such successor trustee relates; but, on request of
the Company or any successor trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Debentures of that or those series to
which the appointment of such successor trustee relates.
(c) Upon request of any such successor trustee or retiring
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor trustee all such rights,
powers and trusts referred to in paragraph (a) or (b) of this Section, as the
case may be.
(d) No successor trustee shall accept its appointment unless
at the time of such acceptance such successor trustee shall be qualified and
eligible under this Article.
(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of the succession of
such trustee hereunder by mail, first-class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. If the Company fails to transmit such notice within 10 days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Company.
SECTION 7.12. Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided that such corporation shall be
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qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Debentures shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Debentures so authenticated with the same effect as if such
successor Trustee had itself authenticated such Debentures.
SECTION 7.13. If and when the Trustee shall become a creditor
of the Company (or any other obligor upon the Debentures), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Company (or any other obligor upon the Debentures).
ARTICLE EIGHT
Concerning the Debentureholders
SECTION 8.01. Whenever in this Indenture it is provided that
the holders of a majority or specified percentage in aggregate principal amount
of the Debentures of a particular series may take any action (including the
making of any demand or request, the giving of any notice, consent or waiver or
the taking of any other action), the fact that at the time of taking any such
action the holders of such majority or specified percentage of that series have
joined therein may be evidenced by any instrument or any number of instruments
of similar tenor executed by such holders of Debentures of that series in person
or by agent or proxy appointed in writing.
If the Company shall solicit from the Debentureholders of any
series any request, demand, authorization, direction, notice, consent, waiver or
other action, the Company may, at its option, as evidenced by an Officer's
Certificate, fix in advance a record date for that series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or
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consent by such Debentureholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
SECTION 8.02. Subject to the provisions of Section 7.01, proof
of the execution of any instrument by a Debentureholder (such proof will not
require notarization) or his, her or its agent or proxy and proof of the holding
by any person of any of the Debentures shall be sufficient if made in the
following manner:
(a) the fact and date of the execution by any such
person of any instrument may be proved in any reasonable
manner acceptable to the Trustee;
(b) the ownership of Debentures shall be proved by the
Debenture Register of such Debentures or by a certificate of
the Debenture Registrar thereof; or
(c) the Trustee may require such additional proof of
any matter referred to in this Section as it shall deem
necessary.
SECTION 8.03. Prior to the due presentment for registration of
transfer of any Debenture, the Company, the Trustee, any paying agent and any
Debenture Registrar may deem and treat the person in whose name such Debenture
shall be registered upon the books of the Company as the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notice of ownership or writing thereon made by anyone other than the
Debenture Registrar) for the purpose of receiving payment of or on account of
the principal of and premium, if any, and (subject to Section 2.03) interest on
such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be affected by
any notice to the contrary.
SECTION 8.04. At any time the Debentures are held by any
holder other than CPL Capital [I], a Delaware statutory business trust, in
determining whether the holders of the requisite aggregate principal amount of
Debentures of a particular series have concurred in any direction, consent or
waiver under this Indenture, Debentures of that series which are owned by the
Company or any other obligor on the Debentures of that series or by any person
directly or indirectly controlling or controlled by or under common control with
the Company or any other obligor on the Debentures of that series shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on
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any such direction, consent or waiver, only Debentures of such series which the
Trustee actually knows are so owned shall be so disregarded. Debentures so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section, if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Debentures and
that the pledgee is not a person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
such other obligor. In case of a dispute as to such right, any decision by the
Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
SECTION 8.05. At any time prior to (but not after) the
evidencing to the Trustee, as provided in Section 8.01, of the taking of any
action by the holders of the majority or percentage in aggregate principal
amount of the Debentures of a particular series specified in this Indenture in
connection with such action, any holder of a Debenture of that series which is
shown by the evidence to be included in the Debentures the holders of which have
consented to such action may, by filing written notice with the Trustee, and
upon proof of holding as provided in Section 8.02, revoke such action so far as
concerns such Debenture. Except as aforesaid, any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture, and of any Debenture
issued in exchange therefor, on registration of transfer thereof or in place
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Debenture. Any action taken by the holders of the majority or
percentage in aggregate principal amount of the Debentures of a particular
series specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the holders of all the
Debentures of that series.
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. In addition to any supplemental indenture
otherwise authorized by this Indenture, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect), without the consent of
the Debentureholders, for one or more of the following purposes:
(a) to evidence the succession of another corporation
to the Company, and the assumption by any such successor of
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the covenants of the Company contained herein or otherwise
established with respect to the Debentures;
(b) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection of
the holders of the Debentures of all or any series as the Board of
Directors and the Trustee shall consider to be for the protection of
the holders of Debentures of all or any series, and to make the
occurrence, or the occurrence and continuance, of a default in any of
such additional covenants, restrictions, conditions or provisions a
default or an Event of Default with respect to that series permitting
the enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided, however, that in respect of
any such additional covenant, restriction, condition or provision, such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults), may provide for an immediate
enforcement upon such default or may limit the remedies available to
the Trustee upon such default or may limit the right of the holders of
a majority in aggregate principal amount of the Debentures of such
series to waive such default;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this indenture as shall
not be inconsistent with the provisions of this Indenture and shall not
adversely affect the interests of the holders of the Debentures of any
series; or
(d) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Debenture outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
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Any supplemental indenture authorized by the provisions of
this Section may be executed by the Company and the Trustee without the consent
of the holders of any of the Debentures at the time outstanding, notwithstanding
any of the provisions of Section 9.02.
SECTION 9.02. With the consent (evidenced as provided in
Section 8.01) of the holders of not less than a majority in aggregate principal
amount of the Debentures of each series affected by such supplemental indenture
or indentures at the time outstanding, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the holders of the Debentures of that series under
this Indenture; provided, however, that no such supplemental indenture shall (i)
extend the Fixed Maturity of any Debentures of any series, reduce the principal
amount thereof, reduce the rate or extend the time of payment of interest
thereon or reduce any premium payable upon the redemption thereof, without the
consent of the holder of each Debenture so affected or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of each
Debenture then outstanding and affected thereby.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Debentureholders
required to consent thereto as aforesaid, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion but
shall not be obligated to enter into such supplemental indenture.
It shall not be necessary for the consent of the
Debentureholders of any series affected thereby under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first-class postage prepaid, a notice, setting
forth in general terms the substance of such supplemental indenture, to the
Debentureholders
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of all series affected thereby as their names and addresses appear upon the
Debenture Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 9.03. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, this Indenture
shall, with respect to that series, be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debentures of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.04. Debentures of any series, affected by a
supplemental indenture, authenticated and delivered after the execution of such
supplemental indenture pursuant to the provisions of this Article or of Section
10.01, may bear a notation in form approved by the Company, provided such form
meets the requirements of any exchange upon which such series may be listed, as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Debentures of that series so modified as to conform, in the
opinion of the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures of
that series then outstanding.
SECTION 9.05. The Trustee, subject to the provisions of
Section 7.01, is entitled to receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and that
it is proper for the Trustee under the provisions of this Article to join in the
execution thereof.
ARTICLE TEN
Consolidation, Merger and Sale
SECTION 10.01. Nothing contained in this Indenture or in any
of the Debentures shall prevent any consolidation or merger of the Company with
or into any other corporation or corporations (whether or not affiliated with
the Company), or successive consolidations or mergers in which the Company or
its successor or successors shall be a party or parties, or shall
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prevent any sale, conveyance, transfer or other disposition of the property of
the Company or its successor or successors as an entirety, or substantially as
an entirety, to any other corporation (whether or not affiliated with the
Company or its successor or successors) authorized to acquire and operate the
same; provided, however, the Company hereby covenants and agrees that, upon any
such consolidation, merger, sale, conveyance, transfer or other disposition, the
due and punctual payment of the principal of (premium, if any) and interest on
all of the Debentures of all series in accordance with the terms of each series,
according to their tenor, and the due and punctual performance and observance of
all the covenants and conditions of this Indenture with respect to each series
or established with respect to each series pursuant to Section 2.01 to be kept
or performed by the Company, shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act as
then in effect) satisfactory in form to the Trustee executed and delivered to
the Trustee by the entity formed by such consolidation, or into which the
Company shall have been merged, or by the entity which shall have acquired such
property.
SECTION 10.02. (a) In case of any such consolidation, merger,
sale, conveyance, transfer or other disposition and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Debentures
of all series outstanding and the due and punctual performance of all of the
covenants and conditions of this Indenture or established with respect to each
series of the Debentures pursuant to Section 2.01 to be performed by the Company
with respect to each series, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the party of the first part, and thereupon the predecessor corporation shall
be relieved of all obligations and covenants under this Indenture and the
Debentures, except the provisions of Section 7.06 to the extent such provisions
relate to matters occurring before any such consolidation, merger, sale,
conveyance, transfer or other disposition. Such successor corporation thereupon
may cause to be signed, and may issue either in its own name or in the name of
the Company or any other predecessor obligor on the Debentures, any or all of
the Debentures issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee; and, upon the order of such
successor company, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Debentures which previously shall have been
signed and delivered by the officers of the predecessor Company to the Trustee
for authentication, and any
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Debentures which such successor corporation thereafter shall cause to be signed
and delivered to the Trustee for that purpose. All the Debentures so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Debentures theretofore or thereafter issued in accordance with the terms
of this Indenture as though all of such Debentures had been issued at the date
of the execution hereof.
(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition, such changes in phraseology and form
(but not in substance) may be made in the Debentures thereafter to be issued as
may be appropriate.
(c) Nothing contained in this Indenture or in any of the
Debentures shall prevent the Company from merging into itself or acquiring by
purchase or otherwise all or any part of the property of any other corporation
(whether or not affiliated with the Company).
SECTION 10.03. The Trustee, subject to the provisions of
Section 7.01, is entitled to receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
other disposition, and any such assumption, comply with the provisions of this
Article.
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys
SECTION 11.01. This Indenture shall upon Company request cease
to be of further effect (except as hereinafter expressly provided), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(a) both
(1) all Debentures theretofore authenticated and
delivered (other than Debentures which have been destroyed,
lost or stolen and which have been replaced or paid as
provided in Section 2.07 have been delivered to the Trustee
for cancellation; and
(2) all Debentures not theretofore delivered to the
Trustee for cancellation shall be deemed to have been paid in
accordance with Section 11.03;
(b) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
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(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
In the event there shall be Debentures of two or more series
outstanding hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested to
do so with respect to Debentures of all series as to which it is Trustee and if
the other conditions thereto are met. In the event there shall be two or more
Trustees hereunder, then the effectiveness of each such instrument from each
Trustee hereunder shall be conditioned upon receipt of such instruments from
each other Trustee hereunder.
Notwithstanding the satisfaction and discharge of this
Indenture as aforesaid, the obligations of the Company under Sections 2.05,
2.06, 2.07, 4.02, 4.03 and 7.06 and this Article Eleven shall survive.
Upon satisfaction and discharge of this Indenture as provided
in this Section, the Trustee shall assign, transfer and turn over to the
Company, subject to the lien provided by Section 7.06, any and all money,
securities and other property then held by the Trustee for the benefit of the
holders of the Debentures other than money and Government Obligations held by
the Trustee pursuant to Section 11.04.
SECTION 11.02. If at any time all such Debentures of a
particular series not heretofore delivered to the Trustee for cancellation or
which have not become due and payable as described in Section 11.01 shall have
been paid by the Company by depositing irrevocably with the Trustee as trust
funds moneys or an amount of Governmental Obligations sufficient to pay at
maturity or upon redemption all such Debentures of that series not theretofore
delivered to the Trustee for cancellation, including principal (and premium, if
any) and interest due or to become due to such date of maturity or date fixed
for redemption, as the case may be, and if the Company shall also pay or cause
to be paid all other sums payable hereunder by the Company with respect to that
series, then after the date such moneys or Governmental Obligations, as the case
may be, are deposited with the Trustee: (a) the Company shall be released from
its covenants and other obligations contained in Sections 4.05, 5.03, 10.01,
10.02, and 10.03 and may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant or
obligation, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or obligation or by reason of any reference in any
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such covenant or obligation to any other provision of this Indenture or any
other document, and any failure to comply with any such covenant or obligation
shall not constitute a Default or an Event of Default with respect to the
Debentures of such series; (b) the occurrence of any event specified in Section
6.01(a)(3) shall not constitute a Default or an Event of Default with respect to
the Debentures of such series; (c) the Debentures of such series shall
thereafter be deemed not to be "outstanding" solely for purposes of determining
whether the Debentureholders of the requisite aggregate principal amount of
Debentures have concurred in any act under this Indenture with respect to any
covenant or obligation from which the Company has been released pursuant to (a)
above or with respect to any event that shall have ceased to constitute a
Default or Event of Default with respect to Debentures of such series pursuant
to (b) above (or the consequences thereof) provided that the provisions of this
Section 11.02 shall not be deemed to relieve the Company of its obligations with
respect to the payment of the principal of (and premium, if any) or interest on
the outstanding Debentures of such series. The release of the Company from its
obligations under this Indenture, as provided for in this Section 11.02, shall
be subject to the further condition that the Company first shall have caused to
be delivered to the Trustee an Opinion of Counsel to the effect that
Debentureholders of a series with respect to which a deposit has been made in
accordance with this Section 11.02 will not realize income, gain or loss for
federal income tax purposes as a result of such deposit and release, and will be
subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit and release had not
occurred.
SECTION 11.03. If, in addition to satisfying the conditions
set forth in Section 11.01 or 11.02 (except for the requirement of an Opinion of
Counsel), the Company delivers to the Trustee an Opinion of Counsel to the
effect that (a) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (b) since the date of this Indenture
there has been a change in applicable federal income tax law, in either case to
the effect that, and based thereon such Opinion of Counsel shall confirm that,
the Debentureholders of a series with respect to which a deposit has been made
in accordance with Section 11.01 or 11.02 will not realize income, gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount, in the
same manner and at the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, and (c) the deposit shall not result
in the Company, the Trustee or the trust being deemed an "investment company"
under the Investment Company Act of 1940, as amended, then, in such event, the
Company will be deemed to have paid and discharged the entire indebtedness on
that series and
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the holder thereof shall thereafter be entitled to receive payment solely from
the trust fund described above. Notwithstanding the satisfaction and discharge
of any Debentures as aforesaid, the obligations of the Company in respect of
such Debentures under Sections 2.05, 2.06, 2.07, 4.02, 4.03 and 7.06 and this
Article Eleven shall survive.
SECTION 11.04. All moneys or Governmental Obligations
deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in
trust and shall be available for payment as due, either directly or through any
paying agent (including the Company acting as its own paying agent), to the
holders of the particular series of Debentures for the payment or redemption of
which such moneys or Governmental Obligations have been deposited with the
Trustee.
SECTION 11.05. In connection with the satisfaction and
discharge of this Indenture all moneys or Governmental Obligations then held by
any paying agent under the provisions of this Indenture shall, upon demand of
the Company, be paid to the Trustee and thereupon such paying agent shall be
released from all further liability with respect to such moneys or Governmental
Obligations.
SECTION 11.06. Any moneys or Governmental Obligations
deposited with any paying agent or the Trustee, or then held by the Company, in
trust for payment of principal of or premium or interest on the Debentures of a
particular series that are not applied but remain unclaimed by the holders of
such Debentures for at least two years after the date upon which the principal
of (and premium, if any) or interest on such Debentures shall have respectively
become due and payable, shall, upon written notice from the Company, be repaid
to the Company on May 31 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the paying agent and the Trustee shall
be released from all further liability with respect to such moneys or
Governmental Obligations, and the holder of any of the Debentures entitled to
receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company for the payment thereof.
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors
SECTION 12.01. No recourse under or upon any obligation,
covenant or agreement of this Indenture, or of any Debenture, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future as such,
of the
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Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Debentures or implied therefrom; and that any and all such
personal liability of every name and nature, either at common law, in equity or
by constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Debentures.
ARTICLE THIRTEEN
Miscellaneous Provisions
SECTION 13.01. All the covenants, stipulations, promises and
agreements in this Indenture contained by or on behalf of the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 13.02. Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board, committee
or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation
that shall at the time be the lawful sole successor of the Company.
SECTION 13.03. Except as otherwise expressly provided herein,
any notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Debentures
to or on the Company may be given or served by being deposited first-class
postage prepaid in a post-office letter box addressed (until another address is
filed in writing by the Company with the Trustee), as follows: Central and South
West Corporation, 1616 Woodall Rodgers Freeway, Dallas, Texas 75202, Attention:
Director, Finance. Any notice, election, request or demand by the Company or any
Debentureholder
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to or upon the Trustee shall be deemed to have been sufficiently given or made,
for all purposes, if given or made in writing at the Corporate Trust Office of
the Trustee.
SECTION 13.04. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of that State,
without regard to the conflicts of laws principles thereof.
SECTION 13.05. (a) Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture
and delivered to the Trustee with respect to compliance with a condition or
covenant in this Indenture (other than the certificate provided pursuant to
Section 5.03(d) of this Indenture) shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 13.06. Simultaneously with the execution of this
Indenture, the Company shall deliver to the Trustee an Opinion of Counsel
stating that, in the opinion of such counsel, (a) this Indenture has been duly
authorized by and lawfully executed and delivered on behalf of the Company, is
in full force and effect and is legal, valid and binding upon the Company in
accordance with its terms, except to the extent limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights and (b) the
Debentures have been authorized, executed and delivered by the Company and
constitute legal, valid and binding obligations of the Company in accordance
with their terms.
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SECTION 13.07. Except as provided pursuant to Section 2.01
pursuant to a Board Resolution, and as set forth in an Officer's Certificate, or
established in one or more indentures supplemental to this Indenture, in any
case where the date of maturity of interest or principal of any Debenture or the
date of redemption of any Debenture shall not be a Business Day then payment of
interest or principal (and premium, if any) may be made on the next succeeding
Business Day with the same force and effect as if made on the nominal date of
maturity or redemption, and no interest shall accrue for the period after such
nominal date.
SECTION 13.08. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by operation of
Section 3.18(c) of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.
SECTION 13.10. In case any one or more of the provisions
contained in this Indenture or in the Debentures of any series shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Indenture or of such Debentures, but this Indenture and such Debentures
shall be construed as if such invalid or illegal or unenforceable provision had
never been contained herein or therein.
SECTION 13.11. The Company will have the right at all times to
assign any of its rights or obligations under this Indenture to a direct or
indirect wholly-owned subsidiary of the Company; provided that, in the event of
any such assignment, the Company will remain liable for all such obligations.
Subject to the foregoing, the Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns. The
Indenture may not otherwise be assigned by the parties thereto.
SECTION 13.12. The parties intend that, for each holder of a
Debenture and each person that acquires a beneficial ownership interest in a
Debenture, such Debentures shall constitute indebtedness for purposes of United
States federal, state and local taxes.
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ARTICLE FOURTEEN
Subordination of Debentures
SECTION 14.01. The Company covenants and agrees, and each
holder of Debentures issued hereunder by his acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject to the
provisions of this Article Fourteen; and each holder of a Debenture, whether
upon original issue or upon transfer or assignment thereof, accepts and agrees
to be bound by such provisions.
The payment of the principal of and premium, if any, and
interest on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article Fourteen shall prevent the
occurrence of any default or Event of Default hereunder.
SECTION 14.02. In the event and during the continuation of any
default in the payment of principal, premium, interest or any payment due on any
Senior Indebtedness continuing beyond the period of grace, if any, specified in
the instrument evidencing such Senior Indebtedness (and the Trustee has received
written notice thereof from the Company or one or more holders of Senior
Indebtedness or their representative or representatives or a trustee), unless
and until such default shall have been cured or waived or shall have ceased to
exist, and in the event that the maturity of any Senior Indebtedness has been
accelerated because of a default (and the Trustee has received written notice
thereof from the Company or one or more holders of Senior Indebtedness or their
representative or representatives or a trustee), then no payment shall be made
by the Company with respect to the principal (including redemption and sinking
fund payments) of or premium, if any, or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any holder when such payment is prohibited
by the preceding paragraph of this Section 14.02, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such payment
of the amounts then due and owing on the Senior
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Indebtedness and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Senior Indebtedness.
SECTION 14.03. Upon any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any dissolution, winding-up,
liquidation or reorganization of the Company, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings, all amounts due
or to become due upon all Senior Indebtedness shall first be paid in full, or
payment thereof provided for in money in accordance with its terms, before any
payment is made on account of the principal (and premium, if any) or interest on
the Debentures; and upon any such dissolution, winding-up, liquidation or
reorganization, any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Debentures or the Trustee would be entitled, except for
the provisions of this Article Fourteen, shall be paid by the Company, by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, by the holders of the Debentures or by the
Trustee under this Indenture if received by them or it directly to the holders
of Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full, in money
or money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness, before any payment or distribution
is made to the holders of Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee or the holders of the Debentures before all Senior Indebtedness is
paid in full, or provision is made for such payment in money in accordance with
its terms, such payment or distribution shall be held in trust for the benefit
of and shall be paid over or delivered to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in money
in accordance with its terms, after giving effect to any concurrent
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payment or distribution to or for the holders of such Senior
Indebtedness.
For purposes of this Article Fourteen, the words, "cash,
property or securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article
Fourteen with respect to the Debentures to the payment of all Senior
Indebtedness which may at the time be outstanding; provided that (i) the Senior
Indebtedness is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of the Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article Ten hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 14.03 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article Ten
hereof. Nothing in Section 14.02 or in this Section 14.03 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.06.
SECTION 14.04. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of the Debentures shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Debentures shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the holders of the Debentures or the
Trustee would be entitled except for the provisions of this Article Fourteen,
and no payment over pursuant to the provisions of this Article Fourteen, to or
for the benefit of the holders of Senior Indebtedness by holders of the
Debentures or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the holders of the Debentures, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness. It is understood that the provisions of this Article Fourteen are
and are intended solely for the purposes of defining the relative rights of the
holders of the Debentures, on the one hand, and the holders of the Senior
Indebtedness on the other hand.
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Nothing contained in this Article Fourteen or elsewhere in
this Indenture or in the Debentures is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior Indebtedness, and
the holders of the Debentures, the obligation of the Company, which is absolute
and unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Debentures and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Fourteen
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article Fourteen, the Trustee, subject to the provision of
Section 7.01, and the holders of the Debentures shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purposes of ascertaining
the persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Fourteen.
SECTION 14.05. Each holder of a Debenture by acceptance
thereof authorizes and directs the Trustee in his, her or its behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article Fourteen and appoints the Trustee his attorney-in-fact
for any and all such purposes.
SECTION 14.06. The Company shall give prompt written notice to
a Responsible Officer of the Trustee of any fact known to the Company which
would prohibit the making of any payment of monies to or by the Trustee or
paying agent in respect of the Debentures pursuant to the provisions of this
Article Fourteen. Notwithstanding the provisions of this Article Fourteen or any
other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment of monies to or by the Trustee
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or paying agent in respect of the Debentures pursuant to the provisions of this
Article Fourteen, unless and until a Responsible Officer of the Trustee shall
have received written notice thereof at the Corporate Trust Office of the
Trustee from the Company or a holder or holders of Senior Indebtedness or from
any trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.01, shall be entitled in all
respects to assume that no such facts exist; provided that if the Trustee shall
not have received the notice provided for in this Section 14.06 at least two
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of (or premium, if any) or interest on any Debenture), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected by any notice
to the contrary which may be received by it within two Business Days prior to
such date.
The Trustee, subject to the provisions of Section 7.01, shall
be entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Fourteen, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article Fourteen, and if such evidence is not furnished
the Trustee may defer any payment to such person pending judicial determination
as to the right of such person to receive such payment.
SECTION 14.07. The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Fourteen in respect of any
Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee or any Authenticating Agent of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this
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Article Fourteen, and no implied covenants or obligations with respect to the
holders of Senior Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and, subject to the provisions of Section 7.01,
the Trustee shall not be liable to any holder of Senior Indebtedness if it shall
pay over or deliver to holders of Debentures, the Company or any other person
money or assets to which any holder of Senior Indebtedness shall be entitled by
virtue of this Article Fourteen or otherwise.
SECTION 14.08. No right of any present or future holder of any
Senior Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof which any such
holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the holders of the
Debentures, without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the holders of the Debentures to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other person.
The Bank of New York, as Trustee, hereby accepts the trusts in
this Indenture declared and provided, upon the terms and conditions hereinabove
set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
CENTRAL POWER AND LIGHT COMPANY
By:[-----------------],
Attest:
By:
[_______________], Secretary
THE BANK OF NEW YORK
as Trustee
By:
Its:
Attest:
By:
Its:
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STATE OF TEXAS )
) ss.
COUNTY OF [ ] )
On _____________________, 199_ before me personally appeared
[_________________] and [_________________] personally known to me or proved to
me on the basis of satisfactory evidence to be the persons whose names are
subscribed to the within instrument and acknowledged to me that they executed
the same in their authorized capacities, and that by their signatures on the
instrument the persons, or the entity upon behalf of which the persons acted,
executed the instrument.
Witness my hand and official seal.
------------------------------
Signature of Notary Public
My Commission Expires:
<PAGE>
STATE OF )
) ss.
COUNTY OF )
On this day of ___________________, 199_ before me personally
appeared ___________________ and _____________________ proved to me on the basis
of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies) and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
Witness my hand and official seal.
---------------------------
Signature of Notary Public
My Commission Expires:
<PAGE>
Exhibit 4(b)
CENTRAL POWER AND LIGHT COMPANY
AND
THE BANK OF NEW YORK,
as Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of _______, 1997
TO
INDENTURE
Dated as of [ ], 1997
_________% Junior Subordinated Deferrable Interest Debentures,
Series _, Due ____
FIRST SUPPLEMENTAL INDENTURE, dated as of the ____ day of
_______, 199_ (the "First Supplemental Indenture"), between CENTRAL POWER AND
LIGHT COMPANY, a corporation duly organized and existing under the laws of the
State of Texas (hereinafter sometimes referred to as the "Company"), and THE
BANK OF NEW YORK, a New York banking corporation organized and existing under
the laws of the State of New York, as trustee (hereinafter sometimes referred to
as the "Trustee") (under the Indenture dated as of [ ], 1997 between the Company
and the Trustee (the "Indenture"; all terms used and not defined herein are used
as defined in the Indenture).
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of its junior subordinated
debentures (the "Debentures"), which Debentures are to be issued from time to
time in such series as may be determined by the Company under the Indenture, in
an unlimited aggregate principal amount which may be authenticated and delivered
thereunder as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debentures to be
known as its ____% Junior Subordinated Deferrable Interest Debentures, Series A,
due ____ (such series being hereinafter referred to as the "Series A
Debentures"), the form and substance of such Series A Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this First Supplemental Indenture; and
WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this First Supplemental Indenture,
and all requirements necessary to make this First Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series A Debentures,
when executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the purchase and
acceptance of the Series A Debentures by the holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form and substance
of the Series A Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE ONE
General Terms and Conditions of
the Series A Debentures
SECTION 1.01. There shall be and is hereby authorized a series
of Debentures designated the "____% Junior Subordinated Deferrable Interest
Debentures, Series A, Due ____" limited in aggregate principal amount to
$___________, which amount shall be as set forth in any written order of the
Company for the authentication and delivery of Series A Debentures. The Series A
Debentures shall mature and the principal shall be due and payable, together
with all accrued and unpaid interest thereon, on _________, and shall be issued
in the form of registered Series A Debentures without coupons.
SECTION 1.02. Principal and interest on the Series A
Debentures will be payable, the transfer of such Series A Debentures will be
registrable and such Series A Debentures will be exchangeable for Series A
Debentures bearing identical terms and provisions at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York; provided, however, that payment of interest may be made at the option of
the Company by check mailed to the registered holder at such address as shall
appear in the Debenture Register or by wire transfer to an account maintained by
the registered holder as specified in the Debenture Register.
SECTION 1.03. Each Series A Debenture will bear interest at
the rate of ____% per annum from and including the original date of issuance
until the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum, payable quarterly in arrears on ___________, __________, _________ and
___________ of each year (each, an "Interest Payment Date"), commencing on
_______________, to the person in whose name such Series A Debenture or any
predecessor Series A Debenture is registered at the close of business on the
__________, _________, ________ or __________, respectively, preceding that
Interest Payment Date (each, a "Record Date"). Any such interest installment not
punctually paid or duly provided for on any Interest Payment Date shall
forthwith cease to be payable to the registered holder on the relevant Record
Date, and may be paid to the person in whose name the Series A Debenture (or one
or more predecessor Debentures) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered holders of the Series
A Debentures not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Series A Debentures may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture; provided, however, that interest (other than
interest described in the next sentence) shall not be considered payable by the
Company on any Interest Payment Date falling within an Extension Period (as
defined in Section 3.01 below), unless the Company has elected to make a full or
partial payment of interest accrued on the Series A Debentures on that Interest
Payment Date.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and, for any period
shorter than a full calendar month, on the basis of the actual number of days
elapsed in such period. In the event that any date on which interest is payable
on the Series A Debentures is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
ARTICLE TWO
Redemption of the Series A Debentures
SECTION 2.01. Subject to the terms of Article Three of the
Indenture, the Company shall have the right to redeem the Series A Debentures,
in whole or in part, from time to time, after ___________, at a redemption price
equal to 100% of the principal amount of Series A Debentures to be redeemed plus
any accrued and unpaid interest thereon to the date of such redemption. If the
Series A Debentures are only partially redeemed pursuant to this Section, the
Series A Debentures will be redeemed by lot or by any other method utilized by
the Trustee.
ARTICLE THREE
Extension of Interest Payment Period
SECTION 3.01. Subject to Section 4.06 of the Indenture, so
long as the Company shall not be in default in the payment of interest on the
Series A Debentures, the Company shall have the right, at any time during the
term of the Series A Debentures, to extend any interest payment period of such
Series A Debentures at any time and from time to time for a period not to exceed
20 consecutive calendar quarters from the last Interest Payment Date to which
interest was paid in full and not to extend beyond the maturity of the Series A
Debentures (each, an "Extension Period"), provided that such Extension Period
ends on another Interest Payment Date. No interest shall be due and payable
during an Extension Period, but on the Interest Payment Date occurring at the
end of each Extension Period the Company shall pay to the holders of record on
the Record Date for such Interest Payment Date (regardless of who the holders of
record may have been on other dates during the Extension Period) all accrued and
unpaid interest on the Series A Debentures, together with interest thereon at
the rate specified for the Series A Debentures. Prior to the termination of any
Extension Period, the Company may pay all or any portion of the interest
accrued on the Series A Debentures on any Interest Payment Date to holders
of record on the Record Date for that Interest Payment Date or from time to time
further extend the interest payment period, provided that any such Extension
Period, together with all such previous and further extensions thereof, shall
not exceed 20 consecutive calendar quarters or extend beyond the maturity of the
Series A Debentures. If the Company shall elect to pay all of the interest
accrued on the Series A Debentures on an Interest Payment Date during an
Extension Period, that Extension Period shall automatically terminate on that
Interest Payment Date. Upon the termination of an Extension Period and the
payment of all amounts of interest then due, the Company may commence a new
Extension Period, subject to the foregoing requirements.
SECTION 3.02. The Company shall give the Trustee written
notice of (i) any election by the Company to initiate an Extension Period and
the duration thereof, (ii) any election by the Company to extend any Extension
Period beyond the interest Payment Date on which that Extension Period is then
scheduled to terminate and the duration of such extension and (iii) any election
by the Company to make a full or partial payment of interest accrued on the
Series A Debentures on any Interest Payment Date during any Extension Period and
the amount of such payment. In no event shall such notice by the Company be
given less than one Business Day prior to the Record Date next preceding the
applicable Interest Payment Date. Upon receipt of any such notice, the Trustee
shall give written notice of the Company's election by mail to the Series A
Debentureholders within five business days. The Company shall make a public
announcement of any such election in accordance with New York Stock Exchange
rules not less than five Business Days prior to such Record Date.
ARTICLE FOUR
Form of Series A Debenture
SECTION 4.01. The Series A Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be substantially in
the following forms:
(FORM OF FACE OF DEBENTURE)
[If the Debenture is to be a Global Debenture, insert-- This
Debenture is a Global Debenture within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depositary or a nominee of a
Depositary. This Debenture is exchangeable for Debentures registered in the name
of a person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Debenture
(other than a transfer of this Debenture as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary, or to a successor Depositary or to a nominee
of such successor Depositary) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the issuer or its agent for registration of transfer, exchange or payment, and
any Debenture issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.]
No. __________________ $_________________
CUSIP No. ____________
CENTRAL POWER AND LIGHT COMPANY
----------%
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A, DUE ____
CENTRAL POWER AND LIGHT COMPANY, a corporation duly organized
and existing under the laws of the State of Texas (herein referred to as the
"Company", which term includes any successor corporation under the Indenture),
for value received, hereby promises to pay to __________________________________
or registered assigns, the principal sum of ___________________ Dollars on
____________, and to pay interest on such principal sum from and including
_____________ or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
payable quarterly in arrears on __________, _________, _________ and __________
of each year, commencing on ______________, at the rate of _____ % per annum
until the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of interest at
the same rate per annum. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day year of twelve 30-day months
and, for any period shorter than a full calendar month, on the basis of the
actual number of days elapsed in such period. In the event that any date on
which interest is payable on the Series A Debentures is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly provided for on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this Debenture (or one or more Predecessor Debentures, as defined
in the Indenture) is registered at the close of business on the __________,
_________, ________ or __________, respectively, preceding that Interest Payment
Date (each, a "Record Date"). Any such interest installment not punctually paid
or duly provided for on any Interest Payment Date shall forthwith cease to be
payable to the registered holder on the relevant Record Date, and may be paid to
the person in whose name this Debenture (or one or more Predecessor Debentures)
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture hereinafter
referred to; provided, however, that interest shall not be considered payable by
the Company on any Interest Payment Date falling within an Extension Period (as
defined below), unless the Company has elected to make a full or partial payment
of interest accrued on the Series A Debentures on that Interest Payment Date.
The principal of (and premium, if any) and the interest on this Debenture shall
be payable at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York, in any coin or currency of the
United States of America which at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of interest
may be made at the option of the Company by check mailed to the registered
holder at such address as shall appear in the Debenture Register or, with
respect to a registered holder of $1,000,000 or more in aggregate principal
amount of Debentures who has delivered a written request to the Trustee at least
14 days prior to the relevant Interest Payment Date electing to have payments
made by wire transfer to a designated account in the United States, by wire
transfer of immediately available funds to such designated account.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each holder hereof, by his acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
those provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are contained on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to
be executed.
Dated _____________________________
CENTRAL POWER AND LIGHT COMPANY
By_______________________________
Its:
Attest:
- ----------------------------
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee or as Authentication Agent
By _____________________________
Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of
Debentures of the Company (herein sometimes referred to as the "Debentures"),
specified in the Indenture (as defined below), all issued or to be issued in one
or more series under and pursuant to an Indenture dated as of _____, 1997 duly
executed and delivered between the Company and THE BANK OF NEW YORK, a New York
banking corporation duly organized and existing under the laws of the State of
New York, as Trustee (herein referred to as the "Trustee"), as supplemented by
the First Supplemental Indenture dated as of _____________ between the Company
and the Trustee (such Indenture as so supplemented being hereinafter referred to
as the "Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debentures. By the terms of the Indenture, the Debentures are
issuable in series which may vary as to amount, date of maturity, rate of
interest and in other respects as in the Indenture provided. This series of
Debentures is limited in aggregate principal amount as specified in the First
Supplemental Indenture.
Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem this Series A Debenture at the option of
the Company, without premium or penalty, in whole or in part at any time and
from time to time after _____________ (an "Optional Redemption"), at a
redemption price equal to 100% of the principal amount of Series A Debentures to
be redeemed plus any accrued and unpaid interest thereon to the date of such
redemption. If the Series A Debentures are only partially redeemed by the
Company pursuant to an Optional Redemption, the Series A Debentures will be
redeemed by lot or by any other method utilized by the Trustee.
In the event of redemption of this Debenture in part only, a
new Debenture or Debentures of this series for the unredeemed portion hereof
will be issued in the name of the holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Debentures
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Debenture upon compliance by the Company with
certain conditions set forth therein.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to, changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debentures of any series, reduce the principal amount thereof, reduce the
rate or extend the time of payment of interest thereon or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debenture then outstanding and
affected thereby. The Indenture also contains provisions permitting the holders
of a majority in aggregate principal amount of the Debentures of all series at
the time outstanding affected thereby, on behalf of the holders of the
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any of the
Debentures of such series, which default may be waived by the unanimous consent
of the holders affected. A default may also be deemed to be waived subject to
the Company's compliance with certain provisions of the Indenture, including the
payment of matured interest and principal, other than principal on the
Debentures that has not become due by their terms, and the remedy or,
alternatively, waiver of all other defaults under the Indenture. Any such
consent or waiver by the registered holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and of any Debenture issued
in exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
Subject to Section 4.06 of the Indenture, so long as the
Company shall not be in default in the payment of interest on the Series A
Debentures, the Company shall have the right, at any time during the term of the
Series A Debentures, to extend any interest payment period of such Series A
Debentures at any time and from time to time for a period not to exceed 20
consecutive calendar quarters from the last Interest Payment Date to which
interest was paid in full and not to extend beyond the maturity of the Series A
Debentures (each, an "Extension Period"), provided that such Extension Period
ends on another Interest Payment Date. No interest shall be due and payable
during an Extension Period, but on the Interest Payment Date occurring at the
end of each Extension Period the Company shall pay to the holders of record on
the Record Date for such Interest Payment Date (regardless of who the holders of
record may have been on other dates during the Extension Period) all accrued and
unpaid interest on the Series A Debentures, together with interest thereon, at
the rate specified for the Series A Debentures. Prior to the termination of any
Extension Period, the Company may pay all or any portion of the interest accrued
on the Series A Debentures on any Interest Payment Date to holders of record on
the Record Date for that Interest Payment Date or from time to time further
extend the interest payment period, provided that any such Extension Period,
together with all such previous and further extensions thereof, shall not exceed
20 consecutive calendar quarters or extend beyond the maturity of the Series A
Debentures. If the Company shall elect to pay all of the interest accrued on the
Series A Debentures on an Interest Payment Date during an Extension Period, that
Extension Period shall automatically terminate on that Interest Payment Date.
Upon the termination of an Extension Period and the payment of all amounts of
interest then due, the Company may commence a new Extension Period, subject to
the foregoing requirements.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by the registered
holder hereof on the Debenture Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, The City of New York
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by the registered
holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Debentures of this series are issuable in registered form
without coupons in denominations of $25 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations herein and therein
set forth, Debentures of this series so issued are exchangeable for a like
aggregate principal amount of Debentures of this series of a different
authorized denomination, as requested by the holder surrendering the same.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE FIVE
Original Issue of Series A Debentures
SECTION 5.01. Series A Debentures in the aggregate principal
amount of $___________, may, upon execution of this First Supplemental
Indenture, or from time to time thereafter, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver such Debentures to or upon the written order of the
Company, signed by its Chairman, President, General Manager, Controller or its
Treasurer, without any further action by the Company.
ARTICLE SIX
Miscellaneous Provisions
SECTION 6.01. Except as otherwise expressly provided in this
First Supplemental Indenture or in the form of Series A Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
the form of Series A Debenture that are defined in the Indenture shall have the
several meanings respectively assigned to them thereby.
SECTION 6.02. The Indenture, as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided.
SECTION 6.03. The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee makes no representation as to the validity
or sufficiency of this First Supplemental Indenture.
SECTION 6.04. This First Supplemental Indenture may be
executed in any number of counterparts, each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
CENTRAL POWER AND LIGHT COMPANY
By:____________________________
Attest:
- ------------------------
THE BANK OF NEW YORK, as Trustee
By:______________________________
Attest:
- ------------------------
STATE OF NEW YORK )
) ss.
COUNTY OF )
On the _________ day of ___________, 199_, before me personally came
____________________ and ____________ to me known, who, being by me duly sworn,
did depose and say that they reside at __________________; that they are
_________________ and ___________________, respectively, of The Bank of New
York, one of the corporations described in and which executed the above
instrument; that they know the corporate seal of the corporation; that the seal
affixed to that instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of that corporation and that they signed
their names thereto by like authority.
-----------------------------------
NOTARY PUBLIC
My Commission Expires:
STATE OF ______ )
) ss.
COUNTY OF _________ )
On the ______________ day of __________________, 199_, before me
personally came _____________________ and _____________________ to me known,
who, being by me duly sworn, did depose and say that they reside at ________,
_______; that they are a ________ and __________, respectively, of Central Power
and Light Company, one of the corporations described in and which executed the
above instrument; that they know the corporate seal of the corporation; that the
seal affixed to that instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of that corporation and that they signed
their names thereto by like authority.
-----------------------------------
NOTARY PUBLIC
My Commission Expires:
Exhibit 4(c)
CENTRAL POWER AND LIGHT COMPANY
AND
THE BANK OF NEW YORK,
as Trustee
--------------------
First Supplemental Indenture
Dated as of ______, 1997
TO
INDENTURE
Dated as of _____, 1997
--------------------
_____% Junior Subordinated Deferrable Interest Debentures, Series A
FIRST SUPPLEMENTAL INDENTURE, dated as of the ___ day of
_______, 1997 (the "First Supplemental Indenture"), between CENTRAL POWER AND
LIGHT COMPANY, a corporation duly organized and existing under the laws of the
State of Texas (hereinafter sometimes referred to as the "Company" or "CPL"),
and THE BANK OF NEW YORK, a New York banking corporation, as trustee
(hereinafter sometimes referred to as the "Trustee") (under the Indenture dated
as of _______, 1997 between the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of its junior subordinated
debentures (the "Debentures"), which Debentures are to be issued from time to
time in such series as may be determined by the Company under the Indenture, in
an unlimited aggregate principal amount which may be authenticated and delivered
thereunder as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debentures to be
known as its _____% Junior Subordinated Deferrable Interest Debentures, Series A
(such series being hereinafter referred to as the "Series A Debentures"), which
Series A Debentures will be issued to evidence a loan made to the Company of the
proceeds from the issuance by CPL Capital I, a Delaware business trust (the
"Trust"), of preferred undivided beneficial interests in the assets of the Trust
(the "Preferred Securities") and common undivided beneficial interests in the
assets of the Trust (the "Common Securities") pursuant to the terms of an
Amended and Restated Trust Agreement (the "Trust Agreement") dated as of
_______, 1997 among the Company, as Depositor, The Bank of New York, as Property
Trustee, The Bank of New York (Delaware), as Delaware Trustee and the
Administrative Trustees named therein (the "Administrative Trustees"), which
Trust Agreement shall be substantially in the form attached hereto as Annex A,
the form and substance of such Series A Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this First
Supplemental Indenture; and
WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this First Supplemental Indenture,
and all requirements necessary to make this First Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series A Debentures,
when executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the purchase and
acceptance of the Series A Debentures by the holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form and substance
of the Series A Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE ONE
Additional Definitions
SECTION 1.01. For all purposes of this First Supplemental
Indenture, capitalized terms used herein without definition shall have the
meanings specified in the Indenture.
SECTION 1.02. The terms defined in this Section, for all
purposes of this First Supplemental Indenture, shall have the respective
meanings specified in this Section.
"Additional Sums" has the meaning specified in Section 5.05 of
this First Supplemental Indenture.
"Additional Taxes" means the sum of any additional taxes,
duties and other governmental charges to which the Trust has become subject from
time to time as a result of a Tax Event.
"Common Securities" has the meaning specified in the second
recital of this First Supplemental Indenture.
"Distributions" means amounts payable in respect of the
Preferred Securities and Common Securities as provided in the Trust Agreement.
"Extension Period' has the meaning specified in Section 4.01
of this First Supplemental Indenture.
"Guarantee" means the guarantee by the Company of
Distributions on the Preferred Securities of the Trust to the extent provided in
the Guarantee Agreement, substantially in the form attached hereto as Annex B.
"Investment Company Event" means, in respect of the Trust, the
receipt by the Trust of an Opinion of Counsel, rendered by a law firm having a
recognized national tax and securities practice, to the effect that, as a result
of the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law), the Trust is or will
be considered an "investment company" that is required to be registered under
the 1940 Act, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities of the Trust.
"1940 Act" means the Investment Company Act of 1940, as
amended.
"Preferred Securities" has the meaning specified in the second
recital of this First Supplemental Indenture.
"Property Trustee" means, in respect of the Trust, the
commercial bank or trust company identified as the Property Trustee in the Trust
Agreement, solely in its capacity as Property Trustee of the Trust under the
Trust Agreement and not in its individual capacity, or its successor in interest
in such capacity, or any successor property trustee appointed as therein
provided.
"Special Event" means a Tax Event or an Investment Company
Event.
"Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities of the Trust, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date of such Opinion of Counsel,
subject to United States federal income tax with respect to income received or
accrued on the corresponding Series A Debentures, (ii) interest payable by the
Company on the Series A Debentures is not, or within 90 days of the date of such
Opinion of Counsel, will not be, deductible by CPL, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days of the date of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Trust" has the meaning specified in the second recital of
this First Supplemental Indenture.
"Trust Agreement" has the meaning specified in the second
recital of this First Supplemental Indenture.
ARTICLE TWO
General Terms and Conditions of
the Series A Debentures
SECTION 2.01. There shall be and is hereby authorized a series
of Debentures designated the "_____% Junior Subordinated Deferrable Interest
Debentures, Series A," limited in aggregate principal amount to $___________,
which amount shall be as set forth in any written order of the Company for the
authentication and delivery of Series A Debentures. The Series A Debentures
shall mature and the principal shall be due and payable, together with all
accrued and unpaid interest thereon, on ________ 2037, provided that the Company
may shorten such maturity date at any time and from time to time at the election
of the Company, but in no event shall such maturity date be earlier than
________, 2002, and further provided that if the Company exercises its right to
liquidate the Trust and distribute the Debentures to holders of the Preferred
Securities pursuant to Section 904 of the Trust Agreement, the maturity date of
such Debentures may be shortened to any date selected by the Company that is (i)
no earlier than the date five years after the initial issuance of the Preferred
Securities and (ii) no later than ________, 2037. The Series A Debentures shall
be issued in the form of registered Series A Debentures without coupons.
SECTION 2.02. The Series A Debentures shall be issued in
certificated form and registered in the name of the Property Trustee or its
nominee, subject to the exchange of such certificated Series A Debentures for a
Global Debenture as provided in the Trust Agreement. Series A Debentures
represented by a Global Debenture will not be exchangeable for, and will not
otherwise be issuable as, Series A Debentures in certificated form, except as
provided in this First Supplemental Indenture. Principal and interest on the
Series A Debentures will be payable, the transfer of such Series A Debentures
will be registrable and such Series A Debentures will be exchangeable for Series
A Debentures bearing identical terms and provisions at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, The City of
New York; provided, however, that payment of interest may be made at the option
of the Company by check mailed to the registered holder at such address as shall
appear in the Debenture Register or, with respect to a registered holder of
$1,000,000 or more in aggregate principal amount of Series A Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date (as defined in Section 2.03 below) electing to
have payments made by wire transfer to a designated account in the United
States, by wire transfer of immediately available funds to such designated
account. The Company and the Trustee will act as co-paying agents for the Series
A Debentures. Payments of principal of and interest on the Series A Debentures
issued as a Global Debenture will be made to the Depositary. The Depository
Trust Company (55 Water Street, New York) will initially act as the Depositary
for the Global Debenture.
A Global Debenture shall be exchangeable for Series A
Debentures registered in the names of persons other than the Depositary or its
nominee only if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as a depositary for such Global Debenture and no successor
depositary shall have been appointed, or if at any time the Depositary ceases to
be a clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Company in its sole discretion determines that such
Global Debenture shall be so exchangeable or (iii) the Global Debenture was
issued pursuant to Section 904 of the Trust Agreement and there shall have
occurred and be continuing an Event of Default with respect to such Global
Debenture and the holders of at least a majority of the beneficial interests in
such Global Debenture advise the Trustee in writing that the continuation of a
book-entry system through the Depositary is no longer in their best interest,
then the Trustee shall notify the Depositary and the Depositary shall notify all
holders of beneficial interests in the Global Debenture of the occurrence of
such event and the availability of Series A Debentures to such holders. Any
Global Debenture that is exchangeable pursuant to the preceding sentence shall
be exchangeable for definitive certificates registered in such names as the
Depositary shall direct.
SECTION 2.03. Each Series A Debenture will bear interest at
the rate of _____% per annum from and including the original date of issuance or
from the most recent Interest Payment Date referred to below to which interest
has been paid or duly provided for until the principal thereof becomes due and
payable, and on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year (each, an "Interest Payment
Date"), commencing on _______, 1997, to the person in whose name such Series A
Debenture or any predecessor Series A Debenture is registered at the close of
business on the Business Day next preceding that Interest Payment Date (each, a
"Record Date"); provided, however, that if the Series A Debentures shall not be
in the form of a Global Debenture, the record date shall be the 15th day of the
month in which the relevant Interest Payment Date occurs. Any such interest
installment not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and may be paid to the person in whose name the Series A
Debenture (or one or more predecessor Debentures) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered holders
of the Series A Debentures not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Series A
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture; provided, however, that
interest (other than interest described in the next sentence) shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period, unless the Company has elected to make a full or partial
payment of interest accrued on the Series A Debentures on that Interest Payment
Date. Any partial payment of interest accrued on the Series A Debentures on any
Interest Payment Date falling within an Extension Period shall be paid pro rata
to such registered holders based upon the principal amount of Series A
Debentures then held by such registered holders.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and, for any period
shorter than a full calendar month, on the basis of the actual number of days
elapsed in such period. In the event that any date on which interest is payable
on the Series A Debentures is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the date such payment was
originally payable.
ARTICLE THREE
Redemption of the Series A Debentures
SECTION 3.01. Subject to the terms of Article Three of the
Indenture, the Company shall have the right to redeem the Series A Debentures,
in whole, at any time, or in part, from time to time, on or after _______, 2002,
at a redemption price equal to 100% of the principal amount of Series A
Debentures to be redeemed plus any accrued and unpaid interest thereon to the
date of such redemption. If the Series A Debentures are only partially redeemed
pursuant to this Section, the Series A Debentures will be redeemed by lot or by
any other method utilized by the Trustee, such method to be determined solely in
the discretion of the Trustee. The Company may not redeem the Series A
Debentures in part unless all accrued and unpaid interest has been paid in full
on all outstanding Series A Debentures for all interest periods terminating on
or prior to the date of redemption.
SECTION 3.02. If a Special Event in respect of the Trust shall
occur and be continuing, the Company may, at its option, redeem the Series A
Debentures at any time within 90 days of the occurrence of such Special Event,
in whole, but not in part, subject to the provisions of the Indenture. The
redemption price for any Series A Debenture so redeemed shall be equal to 100%
of the principal amount of the Series A Debentures to be redeemed plus any
accrued and unpaid interest thereon to the date of redemption.
ARTICLE FOUR
Extension of Interest Payment Period
SECTION 4.01. Subject to Section 4.06 of the Indenture and
Section 5.06 of this First Supplemental Indenture, the Company shall have the
right, at any time during the term of the Series A Debentures, to defer the
payment of interest on such Series A Debentures at any time and from time to
time for a period not to exceed 20 consecutive calendar quarters from the last
Interest Payment Date to which interest was paid in full (but in no event beyond
the maturity of the Series A Debentures) (each, an "Extension Period"), during
which periods the Company shall have the right to make partial payments of
interest on any Interest Payment Date, and at the end of such Extension Period
the Company shall pay all interest then accrued and unpaid thereon. Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that such Extension Period together with all
such previous and further extensions of such Extension Period shall not exceed
20 consecutive quarters or extend beyond the maturity of the Series A
Debentures. No such Extension Period shall end on a date other than an Interest
Payment Date. Upon termination of any such Extension Period and upon the payment
of all accrued and unpaid interest then due, the Company may elect to begin a
new Extension Period, subject to the above requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof.
SECTION 4.02. The Company shall give the Trustee and the
Administrative Trustees written notice of (i) any election by the Company to
initiate an Extension Period and the duration thereof, (ii) any election by the
Company to extend an Extension Period beyond the Interest Payment Date on which
that Extension Period is then scheduled to terminate and the duration of such
extension and (iii) any election by the Company to make a full or partial
payment of interest accrued on the Series A Debentures on any Interest Payment
Date during an Extension Period and the amount of such payment. In no event
shall such notice by the Company be given less than one Business Day prior to
the earlier of (A) the date the Administrative Trustees are required to give
notice to The New York Stock Exchange or other applicable self-regulatory
organization or to the holders of the Preferred Securities of the record date or
the date Distributions are payable but in any event not less than one Business
Day prior to such record date or (B) one Business Day prior to such date the
Distributions on the Preferred Securities would have been payable except for the
election to begin such Extension Period. Upon receipt of any such notice, the
Trustee shall give written notice of the Company's election by mail to the
Series A Debentureholders within five Business Days. The Company shall make a
public announcement of any such election in accordance with New York Stock
Exchange rules not less than five Business Days prior to such Record Date.
ARTICLE FIVE
Additional Terms Relating to the Preferred Securities
SECTION 5.01. (a) For so long as any Preferred Securities
remain outstanding, if, upon an Event of Default, the Trustee fails or the
holders of not less than 33% in aggregate principal amount of the outstanding
Series A Debentures fail to declare the principal of all of the Series A
Debentures to be immediately due and payable, the holders of at least 33% in
aggregate liquidation preference of the Preferred Securities then outstanding
(determined in accordance with the Trust Agreement) shall have such right by a
notice in writing to the Company and the Trustee; and upon any such declaration
such principal amount of and the accrued interest on all of the Series A
Debentures shall become immediately due and payable (subject to Section 6.01(c)
of the Indenture), provided that the payment of principal and interest on such
Series A Debentures shall remain subordinated to the extent provided in the
Indenture.
(b) For so long as any Preferred Securities remain
outstanding, if, upon an Event of Default, the Trustee fails to proceed to
enforce any right available to the holders of the Series A Debentures for 60
days, the holders of at least 33% in aggregate liquidation preference of the
Preferred Securities then outstanding (determined in accordance with the Trust
Agreement) shall have the right, to the fullest extent permitted by law, to
directly institute proceedings for enforcement of such rights.
(c) For so long as any Preferred Securities remain
outstanding, to the fullest extent permitted by law, upon the occurrence of an
Event of Default described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture,
any holder of Preferred Securities shall have the right to institute a
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on the Series A Debentures having a
principal amount equal to the aggregate liquidation preference of the related
Preferred Securities held by such holder after the due date specified for such
payment in the Series A Debentures.
SECTION 5.02. For so long as any Preferred Securities remain
outstanding, if the holders of a majority in aggregate principal amount of the
Series A Debentures fail to waive an Event of Default in accordance with Section
6.06 of the Indenture, the holders of a majority in aggregate liquidation
preference of the Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) have such right.
SECTION 5.03. For so long as any Preferred Securities remain
outstanding, the Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, and no Person shall consolidate with or merge into
the Company or convey, transfer or lease its properties and assets substantially
as an entirety to the Company, unless such consolidation, merger, conveyance,
transfer or lease is permitted under the Trust Agreement and the Guarantee and
does not give rise to any breach or violation of the Trust Agreement or the
Guarantee.
SECTION 5.04. For so long as any Preferred Securities remain
outstanding, the Company shall not terminate the Indenture or amend or
supplement the Indenture in any manner that materially adversely affects the
interests of the holders of the Preferred Securities, and subject to Section
6.01(c) of the Indenture, no waiver of any Event of Default or compliance with
any covenant under the Indenture shall be effective without the prior consent to
such waiver of the holders of at least a majority of the aggregate liquidation
preference of such Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) unless and until the principal of the
Series A Debentures and all accrued and unpaid interest thereon have been paid
in full.
SECTION 5.05. In the event that (i) the Trust is the holder of
all of the Outstanding Series A Debentures, (ii) a Tax Event in respect of the
Trust shall have occurred and be continuing and (iii) the Company shall not have
(a) redeemed the Series A Debentures pursuant to Section 3.02 of this First
Supplemental Indenture or (b) terminated the Trust pursuant to Section 902(b) of
the Trust Agreement, the Company shall pay to the Trust (and its permitted
successors or assigns under the Trust Agreement) for so long as the Trust (or
its permitted successor or assignee) is the registered holder of any Series A
Debentures, such additional amounts as may be necessary in order that the amount
of Distributions (including any Additional Amounts (as defined in the Trust
Agreement)) then due and payable by the Trust on the related Preferred
Securities and Common Securities that at any time remain outstanding in
accordance with the terms thereof shall not be reduced as a result of any
Additional Taxes (the "Additional Sums"). Whenever in the Indenture or the
Series A Debentures there is a reference in any context to the payment of
principal of or interest on the Series A Debentures, such mention shall be
deemed to include mention of the payments of the Additional Sums provided for in
this paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made, provided, however,
that the deferral of the payment of interest pursuant to Section 4.01 of this
First Supplemental Indenture or the Series A Debentures shall not defer the
payment of any Additional Sums that may be due and payable during such interest
payment period.
SECTION 5.06. For so long as any Preferred Securities remain
outstanding, the Company covenants and agrees with each holder of Series A
Debentures issued to the Trust that it will not, and it will not permit any
Subsidiary of the Company to, (i) declare, set aside or pay any dividend or
distribution on, or repurchase, redeem, or otherwise acquire or make any sinking
fund payment with respect to, any shares of the Company's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities that rank pari passu with or junior in
interest to the Series A Debentures or make any guarantee payments with respect
to the foregoing (other than (a) dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, (b)
conversions into or exchanges for shares of its capital stock, (c) redemptions,
purchases or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of the Company or any of
its subsidiaries and mandatory redemptions or sinking fund payments with respect
to any series of Preferred Stock of the Company that are subject to mandatory
redemption or sinking fund requirements, provided that the aggregate stated
value of all such series outstanding at the time of any such payment does not
exceed five percent of the aggregate of (1) the total principal amount of all
bonds or other securities representing secured indebtedness issued or assumed by
the Company and then outstanding and (2) the capital and surplus of the Company
to be stated on the books of account of the Company after giving effect to such
payment, provided, however, that any moneys deposited in any sinking fund and
not in violation of this provision may thereafter be applied to the purchase or
redemption of such Preferred Stock in accordance with the terms of such sinking
fund without regard to the restrictions contained in this provision, and (d)
payments under any guarantee by the Company with respect to any securities of a
subsidiary of the Company, provided that the proceeds from the issuance of such
securities were used to purchase Debentures of any series) if at such time (i)
there shall have occurred any event of which the Company has actual knowledge
that (a) with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (ii) the Company shall be in
default with respect to its payment of any obligations under the Guarantee or
(iii) the Company shall have given notice of its election to begin an Extension
Period as provided herein and shall not have rescinded such notice, or such
period, or any extension thereof, shall be continuing.
SECTION 5.07. For so long as any Preferred Securities remain
outstanding, the Company also covenants with each holder of Series A Debentures
issued to the Trust (i) to maintain directly or indirectly 100% ownership of the
Common Securities of the Trust; provided, however, that any permitted successor
of the Company under the Indenture may succeed to the Company's ownership of
such Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate
the Trust, except (a) in connection with a distribution of the Series A
Debentures to the holders of Preferred Securities in liquidation of the Trust or
(b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement and (iii) to use its reasonable efforts,
consistent with the terms and provisions of the Trust Agreement, to cause the
Trust to remain classified as a "grantor trust" and not to be classified as an
association taxable as a corporation for United States federal income tax
purposes.
ARTICLE SIX
Form of Series A Debenture
The Series A Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[If the Debenture is to be issued as a Global Debenture,
insert--This Debenture is a Global Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary, or to a successor Depositary or
to a nominee of such successor Depositary) may be registered except in limited
circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the issuer or its agent for registration of transfer, exchange or payment, and
any Debenture issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.]
No.___________ $__________
CUSIP No. ______________
CENTRAL POWER AND LIGHT COMPANY
-----%
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A
CENTRAL POWER AND LIGHT COMPANY, a corporation duly organized
and existing under the laws of the State of Texas (herein referred to as the
"Company", which term includes any successor corporation under the Indenture),
for value received, hereby promises to pay to _____________________ or
registered assigns, the principal sum of $____, on _______, 2037, or on such
earlier date as the Company may elect subject to the terms of Section 2.01 of
the First Supplemental Indenture and to pay interest on such principal sum from
and including _______, 199_ or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or duly
provided for, payable quarterly in arrears on March 31, June 30, September 30
and December 31 of each year, commencing on _______, 1997, at the rate of _____%
per annum, until the principal hereof shall have become due and payable, and on
any overdue principal and premium, if any, and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months and, for any period shorter than a full calendar month, on the
basis of the actual number of days elapsed in such period. In the event that any
date on which interest is payable on this Debenture is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly provided for on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this Debenture (or one or more Predecessor Debentures, as defined
in the Indenture) is registered at the close of business on the Business Day
next preceding that Interest Payment Date (each a "Record Date"); provided,
however, that if this Debenture shall not be in the form of a Global Debenture
the record date shall be the 15th day of the month in which the relevant
Interest Payment Date occurs. Any such interest installment not punctually paid
or duly provided for on any Interest Payment Date shall forthwith cease to be
payable to the registered holder on the relevant Record Date, and may be paid to
the person in whose name this Debenture (or one or more Predecessor Debentures)
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may then be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture
hereinafter referred to; provided, however, that interest shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period (as defined below), unless the Company has elected to make a
full or partial payment of interest accrued on this Debenture on that Interest
Payment Date. Any partial payment of interest accrued on this series of
Debentures on any Interest Payment Date falling within an Extension Period shall
be paid pro rata to the registered holder of this Debenture based upon the
principal amount of this Debenture in relation to the aggregate principal amount
of all Debentures of this series then outstanding. The principal of (and
premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, in any coin or currency of the United States of
America which at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered holder at such address
as shall appear in the Debenture Register or, with respect to a registered
holder of $1,000,000 or more in aggregate principal amount of Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date electing to have payments made by wire transfer
to a designated account in the United States, by wire transfer of immediately
available funds to such designated account.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee its attorney-in-fact for
any and all such purposes. Each holder hereof, by its acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
those provisions.
<PAGE>
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are contained on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Instrument to
be executed.
CENTRAL POWER AND LIGHT COMPANY
By
, Treasurer
Attest:
, Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK
as Trustee or as Authenticating Agent
By
Authorized Signatory
<PAGE>
(REVERSE)
_____% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A
(continued)
This Debenture is one of a duly authorized series of
debentures of the Company (herein sometimes referred to as the "Debentures"),
specified in the Indenture (as defined below), all issued or to be issued in one
or more series under and pursuant to an Indenture dated as of _____, 1997 duly
executed and delivered between the Company and THE BANK OF NEW YORK, a New York
banking corporation, as Trustee (herein referred to as the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of _____, 1997 between
the Company and the Trustee (such Indenture as so supplemented being hereinafter
referred to as the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures. By the terms of the
Indenture, the Debentures are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in the Indenture
provided. This series of Debentures is limited in aggregate principal amount as
specified in the First Supplemental Indenture.
Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem the Debentures of this series at the
option of the Company, without premium or penalty, in whole or in part at any
time and from time to time on or after _______ (an "Optional Redemption"), at a
redemption price equal to 100% of the principal amount of the Debentures of this
series to be redeemed plus any accrued and unpaid interest thereon to the date
of such redemption. If the Debentures of this series are only partially redeemed
by the Company pursuant to an Optional Redemption, the Debentures of this series
will be redeemed by lot or by any other method utilized by the Trustee, such
method to be determined solely in the discretion of the Trustee.
If a Special Event in respect of the Trust shall occur and be
continuing, the Company may, at its option, redeem this Debenture at any time
within 90 days of the occurrence of such Special Event, in whole, but not in
part, subject to the provisions of the Indenture. The redemption price for any
Debenture of this series so redeemed shall be equal to 100% of the principal
amount thereof plus accrued and unpaid interest to the date of such redemption.
In the event of redemption of this Debenture in part only, a
new Debenture or Debentures of this series for the unredeemed portion hereof
will be issued in the name of the holder hereof upon the cancellation hereof.
In case an Event of Default with respect to the Debentures of
this series shall have occurred and be continuing, the principal of all of the
Debentures of this series may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of the Debentures of this series upon compliance by
the Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
Outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to, changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debentures of any series, reduce the principal amount thereof, reduce the
rate or extend the time of payment of interest thereon or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debenture then outstanding and
affected thereby. The Indenture also contains provisions permitting the holders
of a majority in aggregate principal amount of the Debentures of all series at
the time outstanding affected thereby, on behalf of the holders of the
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any of the
Debentures of such series, which default may be waived by the unanimous consent
of the holders affected. A default may also be deemed to be waived subject to
the Company's compliance with certain provisions of the Indenture, including the
payment of matured interest and principal, other than principal on the
Debentures that has not become due by their terms, and the remedy or,
alternatively, waiver of all other defaults under the Indenture. Any such
consent or waiver by the registered holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and of any Debenture issued
in exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
For so long as any Preferred Securities remain outstanding,
if, upon an Event of Default, the Trustee fails or the holders of not less than
33% in principal amount of the outstanding Debentures of this series fail to
declare the principal of all of the Debentures of this series to be immediately
due and payable, the holders of at least 33% in aggregate liquidation preference
of the Preferred Securities then outstanding (determined in accordance with the
related Trust Agreement) shall have such right by a notice in writing to the
Company and the Trustee; and upon any such declaration such principal amount of
and the accrued interest on all of the Debentures of this series shall become
immediately due and payable (subject to Section 6.01(c) of the Indenture),
provided that the payment of principal and interest on such Debentures shall
remain subordinated to the extent provided in the Indenture.
For so long as any Preferred Securities remain outstanding,
if, upon an Event of Default, the Trustee fails to proceed to enforce any right
available to the holders of the Series A Debentures for 60 days, the holders of
at least 33% in aggregate liquidation preference of the Preferred Securities
then outstanding (determined in accordance with the Trust Agreement) shall have
the right, to the fullest extent permitted by law, to directly institute
proceedings for enforcement of such rights.
For so long as any Preferred Securities remain outstanding, to
the fullest extent permitted by law, upon the occurrence of an Event of Default
described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture, any holder of
Preferred Securities shall have the right to institute a proceeding directly
against the Company for enforcement of payment to such holder of the principal
of or interest on the Series A Debentures having a principal amount equal to the
aggregate liquidation preference of the related Preferred Securities held by
such holder after the due date specified for such payment in the Series A
Debentures.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
Subject to the provisions of the Indenture, the Company shall
have the right, at any time during the term of this series of Debentures, to
defer the payment of interest on this series of Debentures at any time and from
time to time for a period not to exceed 20 consecutive calendar quarters from
the last Interest Payment Date to which interest was paid in full (but in no
event beyond the maturity of the Series A Debentures) (each, an "Extension
Period") during which periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date, and at the end of such
Extension Period the Company shall pay all interest then accrued and unpaid
thereon. Prior to the termination of any such Extension Period, the Company may
further extend the interest payment period, provided that such Extension Period
together with all such previous and further extensions of such Extension Period
shall not exceed 20 consecutive quarters or extend beyond the maturity of the
Series A Debentures. Upon termination of any such Extension Period and upon the
payment of all accrued and unpaid interest then due, the Company may select a
new Extension Period, subject to the above requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by the registered
holder hereof on the Debenture Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, The City of New York,
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by the registered
holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[If the Debenture is to be issued as a Global Debenture,
insert--This Global Debenture is exchangeable for Debentures in certificated
form only under certain limited circumstances set forth in the Indenture.] The
Debentures of this series are issuable in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations herein and therein set forth,
Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the holder surrendering the same.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE SEVEN
Original Issue of Series A Debentures
Series A Debentures in the aggregate principal amount of
$___________ may, upon execution of this First Supplemental Indenture, or from
time to time thereafter, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
such Debentures to or upon the written order of the Company, signed by its
Chairman, President, Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE EIGHT
Miscellaneous Provisions
SECTION 8.01. Except as otherwise expressly provided in this
First Supplemental Indenture or in the form of Series A Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
the form of Series A Debenture that are defined in the Indenture shall have the
several meanings respectively assigned to them thereby.
SECTION 8.02. The Indenture, as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided.
SECTION 8.03. The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee makes no representation as to the validity
or sufficiency of this First Supplemental Indenture.
SECTION 8.04. This First Supplemental Indenture may be
executed in any number of counterparts, each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
CENTRAL POWER AND LIGHT COMPANY
By:
, Treasurer
THE BANK OF NEW YORK, as Trustee
By:
Exhibit 4(e)
CERTIFICATE OF TRUST
OF
CPL CAPITAL I
THIS CERTIFICATE OF TRUST of CPL Capital I (the "Trust"),
dated January 24, 1997, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Paragraph 3801 et seq.).
1. Name. The name of the business trust being formed
hereby is CPL Capital I.
2. Delaware Trustee. The name and business address
of the trustee of the Trust with a principal place of business in the State of
Delaware are The Bank of New York (Delaware), 23 White Clay Center, Newark,
New Castle County, Delaware 19711.
3. Counterparts. This Certificate of Trust may be
executed in one or more counterparts, all of which together constitute one and
the same instrument.
4. Effective Date. This Certificate of Trust shall
be effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK,
as Trustee
By: /s/ Remo J. Reale
Name: Remo J. Reale
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE)
as Trustee
By: /s/ Joseph G. Ernst
Name: Joseph G. Ernst
Title: Assistant Vice President
/s/ Wendy G. Hargus
Wendy G. Hargus, not in her
individual capacity but solely
as Trustee
EXHIBIT 4(f)
TRUST AGREEMENT
This TRUST AGREEMENT, dated as of January 23, 1997, is among Central
Power and Light Company, a Texas corporation, as "Depositor," The Bank of New
York, a New York banking corporation, The Bank of New York (Delaware), a
Delaware corporation, and Wendy G. Hargus, not in their individual capacities,
but solely as Trustees. The Depositor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "CPL Capital I," in
which name the Trustees, or the Depositor to the extent
provided herein, may conduct the business of the Trust, make
and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over
to the Trustees the sum of $10. The Trustees hereby
acknowledge receipt of such amount in trust from the
Depositor, which amount shall constitute the initial trust
estate.
The Trustees hereby declare that they will hold the trust
estate in trust for the Depositor. It is the intention of the
parties hereto that the Trust created hereby constitute a
business trust under Chapter 28 of Title 12 of the Delaware
Code, 12 Del. Css.3801 et seq. (the "Business Trust Act"), and
that this document constitutes the governing instrument of the
Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Delaware
Secretary of State in accordance with the provisions of the
Business Trust Act.
3. The Depositor and the Trustees will enter into an amended and
restated Trus Agreement, satisfactory to each such party and
substantially in the form to be included as an Exhibit to the
1933 Act Registration Statement (as defined below), to provide
for the contemplated operation of the Trust created hereby
and the issuance of the Preferred Securities and Common
Securities referred to therein. Prior to the execution and
delivery of such amended and restated Trust Agreement, the
Trustees shall not have any duty or obligation hereunder or
with respect to the trust estate, except as otherwise required
by applicable law or as may be necessary to obtain prior to
such execution and delivery any licenses, consents or
approvals required by applicable law or otherwise.
4. The Depositor, as the sponsor of the Trust, shall have the
exclusive right and responsibility to engage in the following
activities: (i) to file with the Securities and Exchange
Commission (the "Commission") and execute, in each case on
behalf of the Trust, (a) the Registration Statement on Form
S-3 (including the prospectus and the exhibits contained
therein) (the "1933 Act Registration Statement"), including
any pre-effective or post-effective amendments to such
<PAGE>
1933 Act Registration Statement, relating to the registration
under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and certain other securities and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration
Statement") (including any pre-effective and post-effective
amendments thereto) relating to the registration of the
Preferred Securities of the Trust under Section 12(b) of the
Securities Exchange Act of 1934, as amended; (ii) to file with
the New York Stock Exchange, any other national stock exchange
or interdealer quotation system (collectively, the "Exchange")
and execute on behalf of the Trust listing applications and
all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to
cause the Preferred Securities to be listed on the Exchange;
(iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to
register the Preferred Securities under the securities or
"Blue Sky" laws of such jurisdictions as the Depositor, on
behalf of the Trust, may deem necessary or desirable and (iv)
to execute on behalf of the Trust that certain Underwriting
Agreement relating to the Preferred Securities, among the
Trust, the Depositor and the several Underwriters named
therein, substantially in the form to be included as an
Exhibit to the 1933 Act Registration Statement. In the event
that any of the filings referred to in clauses (i), (ii) and
(iii) above is required by the rules and regulations of the
Commission, the Exchange or state securities or blue sky laws,
to be executed on behalf of the Trust by any of the Trustees,
Wendy G. Hargus, in her capacity as Trustee of the Trust, is
hereby authorized and directed to join in any such filing and
to execute on behalf of the Trust any and all of the
foregoing.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of Trustees initially shall be three and thereafte
the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the
Depositor which may increase or decrease the number of
Trustees, provided, however, that to the extent required by
the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a
natural person, an entity which has its principal place of
business in the State of Delaware and otherwise meets the
requirements of applicable Delaware law. Subject to the
foregoing, the
Depositor is entitled to appoint or remove without cause any
Trustee at any time. The Trustees may resign upon thirty days
prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and be construed in
accordance with, the laws of the State of Delaware (without
regard to conflict of laws principles).
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed as of the day and year first above written.
CENTRAL POWER AND LIGHT COMPANY,
as Depositor
By /s/ Wendy G. Hargus
Name: Wendy G. Hargus
Title: Treasurer
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee
By /s/ Remo J. Reale
Name: Remo J. Reale
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity but solely as Trustee
By /s/ Joseph G. Ernst
Name: Joseph G. Ernst
Title: Assistant Vice President
/s/ Wendy G. Hargus
Wendy G. Hargus, not in her individual
capacity but solely as Trustee
3
<PAGE>
Exhibit 4(g)
AMENDED AND RESTATED
TRUST AGREEMENT
among
CENTRAL POWER AND LIGHT COMPANY, as Depositor,
THE BANK OF NEW YORK, as Property Trustee,
THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of [ ], 1997
CPL CAPITAL [I]
TABLE OF CONTENTS
Page
ARTICLE I
Defined Terms
Section 101. Definitions............................................ 2
ARTICLE II
Establishment of the Trust
Section 201. Name...................................................... 11
Section 202. Office of the Delaware Trustee; Principal
Place of Business......................................... 11
Section 203. Initial Contribution of Trust Property;
Organizational Expenses................................... 11
Section 204. Issuance of the Preferred Securities...................... 12
Section 205. Issuance of the Common Securities; Subscription
and Purchase of Debentures................................ 12
Section 206. Declaration of Trust...................................... 12
Section 207. Authorization to Enter into Certain Transactions.......... 13
Section 208. Assets of Trust........................................... 17
Section 209. Title to Trust Property................................... 17
ARTICLE III
Payment Account
Section 301. Payment Account............................................ 17
ARTICLE IV
Distributions; Redemption
Section 401. Distributions.............................................. 17
Section 402. Redemption................................................. 18
Section 403. Subordination of Common Securities......................... 20
Section 404. Payment Procedures......................................... 21
Section 405. Tax Returns and Reports.................................... 21
Section 406. Payment of Taxes, Duties, Etc. of the Trust................ 22
ARTICLE V
Trust Securities Certificates
Section 501. Initial Ownership.......................................... 22
Section 502. The Trust Securities Certificates.......................... 22
Section 503. Execution and Delivery of Trust Securities Certificates.... 22
Section 505. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates.................................... 24
Section 506. Persons Deemed Securityholders............................. 24
Section 507. Access to List of Securityholders' Names and Addresses..... 24
Section 508. Maintenance of Office or Agency............................ 25
Section 509. Appointment of Paying Agent................................ 25
Section 510. Ownership of Common Securities by Depositor................ 26
Section 511. Book-Entry Preferred Securities Certificates; Common
Securities Certificate..................................... 26
Section 512. Notices to Clearing Agency................................. 27
Section 513. Definitive Preferred Securities Certificates............... 27
Section 514. Rights of Securityholders.................................. 28
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 601. Limitations on Voting Rights............................... 29
Section 602. Notice of Meetings......................................... 30
Section 603. Meetings of Preferred Securityholders...................... 30
Section 604. Voting Rights.............................................. 31
Section 605. Proxies, etc............................................... 31
Section 606. Securityholder Action by Written Consent................... 31
Section 607. Record Date for Voting and Other Purposes.................. 32
Section 608. Acts of Securityholders.................................... 32
Section 609. Inspection of Records...................................... 33
ARTICLE VII
Representations and Warranties
Section 701. Representations and Warranties of the Bank and the
Property Trustee........................................... 33
Section 702. Representations and Warranties of the Delaware Bank and the
Delaware Trustee........................................... 34
Section 703. Representations and Warranties of Depositor............... 35
ARTICLE VIII
The Trustees
Section 801. Certain Duties and Responsibilities........................ 36
Section 802. Certain Notices............................................ 38
Section 803. Certain Rights of Property Trustee......................... 38
Section 804. Not Responsible for Recitals or Issuance of Securities..... 40
Section 805. May Hold Securities........................................ 40
Section 806. Compensation; Indemnity; Fees.............................. 40
Section 807. Corporate Property Trustee Required; Eligibility
of Trustees................................................ 41
Section 808. Conflicting Interests...................................... 42
Section 809. Co-Trustees and Separate Trustee........................... 42
Section 810. Resignation and Removal; Appointment of Successor.......... 43
Section 811. Acceptance of Appointment by Successor..................... 45
Section 812. Merger, Conversion, Consolidation or Succession to Business 45
Section 813. Preferential Collection of Claims Against Depositor
or Trust....................................................46
Section 814. Reports by Property Trustee................................ 46
Section 815. Reports to the Property Trustee............................ 46
Section 816. Evidence of Compliance with Conditions Precedent........... 47
Section 817. Number of Trustees......................................... 47
Section 818. Delegation of Power........................................ 47
Section 819. Voting..................................................... 48
ARTICLE IX
Termination, Liquidation and Merger
Section 901. Termination Upon Expiration Date............................ 48
Section 902. Early Termination........................................... 48
Section 903. Termination................................................. 48
Section 904. Liquidation................................................. 49
Section 905. Mergers, Consolidations, Amalgamations or
Replacements of the Trust................................... 50
ARTICLE X
Miscellaneous Provisions
Section 1001. Limitation of Rights of Securityholders.................... 51
Section 1002. Amendment.................................................. 52
Section 1003. Separability............................................... 53
Section 1004. Governing Law.............................................. 53
Section 1005. Payments Due on Non-Business Day........................... 53
Section 1006. Successors................................................. 53
Section 1007. Headings................................................... 54
Section 1008. Reports, Notices and Demands............................... 54
Section 1009. Agreement Not to Petition.................................. 54
Section 1010. Trust Indenture Act; Conflict with Trust Indenture Act..... 55
Section 1011. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.................................................. 55
Section 1012. Counterparts............................................... 56
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities
CPL Capital I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
Section 310 (a)(1).........................................807
(a)(2).........................................807
(a)(3).........................................809
(a)(4)........................................ 207(a)(ii)
(b)............................................808
Section 311 (a)............................................813
(b)............................................813
Section 312 (a)............................................507
(b)............................................507
(c)............................................507
Section 313 (a)............................................814(a)
(a)(4).........................................814(b)
(b)............................................814(b)
(c)............................................1008
(d)............................................814(c)
Section 314 (a)............................................815
(b)............................................Not Applicable
(c)(1).........................................816
(c)(2).........................................816
(c)(3)........................................ Not Applicable
(d)............................................Not Applicable
(e)............................................101, 816
Section 315 (a)............................................801(a), 803(a)
(b)............................................802, 1008
(c)............................................801(a)
(d)............................................801, 803
(e)............................................Not Applicable
Section 316 (a)............................................Not Applicable
(a)(1)(A)......................................Not Applicable
(a)(1)(B)......................................Not Applicable
(a)(2).........................................Not Applicable
(b)............................................Not Applicable
(c)............................................607
Section 317 (a)(1).........................................Not Applicable
(a)(2).........................................Not Applicable
(b)............................................509
Section 318 (a)............................................1010
Note: This reconciliation and tie sheet shall not, for any purpose,
be deemed to be a part of the Trust Agreement.
AMENDED AND RESTATED TRUST AGREEMENT, dated as of , 1997,
among (i) Central Power and Light Company, a Texas corporation (including any
successors or assigns, the "Depositor"), (ii) The Bank of New York, a New York
banking corporation duly organized and existing under the laws of the State of
New York, as property trustee (the "Property Trustee" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) The Bank of New York (Delaware), a Delaware banking corporation duly
organized and existing under the laws of the State of Delaware, as Delaware
trustee (the "Delaware Trustee," and, in its separate corporate capacity and not
in its capacity as Delaware Trustee, the "Delaware Bank") (iv) Wendy G. Hargus,
an individual, and R. Russell Davis, an individual, each of whose address is c/o
Central Power and Light Company (each an "Administrative Trustee" and
collectively the "Administrative Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees referred to collectively as the
"Trustees") and (v) the several Holders, as hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Depositor, the Property Trustee, the Delaware
Trustee, and Wendy G. Hargus, as Administrative Trustee (the "Prior
Administrative Trustee") have heretofore duly declared and established a
business trust pursuant to the Delaware Business Trust Act by the entering into
of that certain Trust Agreement, dated as of , 1997 (the "Original Trust
Agreement"), and by the execution and filing by the Delaware Trustee, the
Property Trustee and the Prior Administrative Trustee with the Secretary of
State of the State of Delaware of the Certificate of Trust, filed on , 1997, the
form of which is attached as Exhibit A; and
WHEREAS, the Depositor, the Delaware Trustee, the Property Trustee and the
Prior Administrative Trustee desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities by the Trust to the Depositor,
(ii) the issuance and sale of the Preferred Securities by the Trust pursuant to
the Underwriting Agreement, (iii) the acquisition by the Trust from the
Depositor of all of the right, title and interest in the Debentures and (iv) the
appointment of an additional Administrative Trustee;
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and for
the benefit of the Securityholders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:
ARTICLE I
Defined Terms
Section 101. Definitions.
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference
to an "Article" or a "Section" refers to an Article or a Section, as
the case may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and
not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 608.
"Additional Amount" means, with respect to Trust Securities o a given
Liquidation Amount and/or a given period, the amount of additional interest
accrued on interest in arrears and paid by the Depositor on a Like Amount of
Debentures for such period.
"Additional Sums" has the meaning specified in Section 5.05 of the First
Supplemental Indenture.
"Administrative Trustee" means each of Wendy G. Hargus and R. Russell
Davis, solely in his capacity as Administrative Trustee of the Trust formed and
continued hereunder and not in his individual capacity, or such Administrative
Trustee's successor in interest in such capacity, or any successor trustee
appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises adjudging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
liquidation or reorganization of or in respect of such Person under
the United States Bankruptcy Code or any other similar applicable
Federal or State law, and the continuance of any such decree or order
unvacated and unstayed for a period of 90 days; or the commencement of
an involuntary case under the Federal Bankruptcy Code in respect of
such Person, which shall continue undismissed for a period of 90 days
or entry of an order for relief in such case; or the entry of a decree
or order of a court having jurisdiction in the premises for the
appointment on the ground of insolvency or bankruptcy of a receiver,
custodian, liquidator, trustee or assignee in bankruptcy or insolvency
of such Person or of its property, or for the winding up or
liquidation of its affairs, and such decree or order shall have
remained in force unvacated and unstayed for a period of 90 days; or
(b) the institution by such Person of proceedings to be
adjudicated a voluntary bankrupt, or the consent by such Person to the
filing of a bankruptcy proceeding against it, or the filing by such
Person of a petition or answer or consent seeking liquidation or
reorganization under the Federal Bankruptcy Code or other similar
applicable Federal or State law, or the consent by such Person to the
filing of any such petition or to the appointment on the ground of
insolvency or bankruptcy of a receiver or custodian or liquidator or
trustee or assignee in bankruptcy or insolvency of such Person or of
its property, or shall make a general assignment for the benefit of
creditors.
"Bankruptcy Laws" has the meaning specified in Section 1009.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the appropriate Trustee.
"Book Entry Preferred Securities Certificates" means certificates
representing Preferred Securities issued in global, fully registered form to the
Clearing Agency as described in Section 511.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the Trust, the
Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Trust Securities Certificates,
substantially in the form attached as Exhibit B, as the same may be amended and
supplemented from time to time.
"Certificate of Trust" means the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act. The Depository Trust Company will
be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the principal corporate trust office of the
Property Trustee or Debenture Trustee, as the case may be, at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Amended and Restated Trust
Agreement is located at 101 Barclay Street, 21W, New York, New York 10286.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Tax Event" means a "Tax Event" as defined in the Indenture.
"Debenture Trustee" means The Bank of New York, a New York banking
corporation organized under the laws of the State of New York and any successor
thereto, as trustee under the Indenture.
"Debentures" means the $[ ] aggregate principal amount of the Depositor's [
]% Junior Subordinated Deferrable Interest Debentures, Series [A], issued
pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or both (as the
context requires) of (a) Preferred Securities Certificates issued as Book-Entry
Preferred Securities Certificates as provided in Section 511(a) and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 513.
"Delaware Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. (Section) 3801, et seq., as it may be amended from time to
time.
"Delaware Trustee" means the commercial bank or trust company identified as
the "Delaware Trustee" in the preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Trust formed and continued hereunder and not
in its individual capacity, or its successor in interest in such capacity, or
any successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 401(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 401.
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or
(c) default by the Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Trust
Agreement (other than a covenant or warranty a default in the performance
of which or the breach of which is dealt with in clause (b) or (c), above)
and continuation of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the defaulting
Trustee or Trustees by the Holders of at least 33% in aggregate liquidation
preference of the Outstanding Preferred Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to
the Property Trustee and the failure by the Depositor to appoint a
successor Property Trustee within 60 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in the form
attached as Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 901.
"Extension Period" has the meaning specified in Section 4.01
of the First Supplemental Indenture.
"First Supplemental Indenture" means the First Supplemental
Indenture dated as of [ ], 1997 between the Depositor and the Debenture
Trustee, as Trustee.
"Global Debenture" has the meaning specified in the Indenture.
"Guarantee" means the Guarantee Agreement executed and
delivered by the Depositor and The Bank of New York, as trustee,
contemporaneously with the execution and delivery of this Trust Agreement,
for the benefit of the holders of the Preferred Securities, as amended from
time to time.
"Indenture" means the Indenture, dated as of [ ], 1997, as
supplemented by the First Supplemental Indenture, between the Depositor and
the Debenture Trustee, as trustee, as amended or supplemented from time to
time.
"Investment Company Event" means the receipt by the Trust of
an Opinion of Counsel, rendered by a law firm having a recognized national
tax and securities law practice, to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act Law"),
the Trust is or will be considered an "investment company" that is required
to be registered under the 1940 Act, which Change in 1940 Act Law becomes
effective on or after the date of original issuance of the Preferred
Securities under this Trust Agreement.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment,
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Debentures to be contemporaneously redeemed in
accordance with the Indenture and the proceeds of which will be used to pay
the Redemption Price of such Trust Securities and (b) with respect to a
distribution of Debentures to Holders of Trust Securities in connection
with a termination or liquidation of the Trust, Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of
the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust
Security.
"Liquidation Date" means the date on which Debentures are to
be distributed to Holders of Trust Securities in connection with a
termination and liquidation of the Trust pursuant to Section 904(a).
"Liquidation Distribution" has the meaning specified in
Section 904(d).
"1940 Act" means the Investment Company Act of 1940, as
amended.
"Officer's Certificate" means a certificate signed by the
President, a General Manager, the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant
Secretary, of the Depositor, and delivered to the appropriate Trustee. The
officer signing an Officer's Certificate given pursuant to Section 816
shall be the principal executive, financial or accounting officer of the
Depositor. Any Officer's Certificate delivered with respect to compliance
with a condition or covenant provided for in this Trust Agreement shall
include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by the officer in rendering the
Officer's Certificate;
(c) a statement that the officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of the
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Trust, the Property Trustee, the Delaware Trustee or the
Depositor, but not an employee of any thereof, and who shall be reasonably
acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities theretofore
executed and delivered under this Trust Agreement, except:
(a) Preferred Securities theretofore canceled by the
Property Trustee or delivered to the Property Trustee for
cancellation;
(b) Preferred Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the
Property Trustee or any Paying Agent for the Holders of such Preferred
Securities; provided that, if such Preferred Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange
for or in lieu of which other Preferred Securities have been executed and
delivered pursuant to Sections 504, 505, 511 and 513;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be so owned shall
be so disregarded and (b) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Depositor, one or more of
the Trustees and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a
Book Entry Preferred Securities Certificate as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 509 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with the Bank in its
trust department for the benefit of the Securityholders in which all amounts
paid in respect of the Debentures will be held and from which the Property
Trustee shall make payments to the Securityholders in accordance with Sections
401 and 402.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $25 and having the
rights provided therefor in this Trust Agreement, including the right to receiv
Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate
evidencing that a Person is a Holder of Preferred Securities, substantially in
the form attached as Exhibit E.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as herei
provided.
"Redemption Date" means, with respect to any Trust Security to
be redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any Trust Security,
the Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.
"Relevant Trustee" shall have the meaning specified in
Section 810.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 504.
"Securityholder" or "Holder" means a Person in whose name a
Trust Security or Trust Securities is registered in the Securities Register; any
such Person is a beneficial owner within the meaning of the Delaware Business
Trust Act. If such Person is the Clearing Agency or its nominee, this shall not
prevent the Owners from having an undivided beneficial interest in the assets of
the Trust.
"Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States, or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities under this Trust Agreement, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days after the date of such Opinion
of Counsel, subject to United States federal income tax with respect to income
received or accrued on the Debentures, (ii) interest payable by the Depositor on
the Debentures is not, or within 90 days after the date of such Opinion of
Counsel, will not be, deductible by the Depositor, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days after the date of such Opinion of Counsel, subject to more than a
de minimis amount of other taxes, duties, assessments or other governmental
charges.
"Trust" means the Delaware business trust created and
continued hereby and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in accordance
with the applicable provisions hereof, including all exhibits hereto, including,
for all purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be
a part of and govern this Trust Agreement and any such modification, amendment
or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) the rights of
the Property Trustee under the Guarantee, (c) any cash on deposit in, or owing
to, the Payment Account and (d) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed to
be held by the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Underwriting Agreement,
dated as of [ ], 1997, among the Trust, the Depositor and the Underwriters named
therein.
ARTICLE II
Establishment of the Trust
Section 201. Name.
The Trust created and continued hereby shall be known as "CPL
Capital I," as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders of Trust Securities and the
other Trustees, in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and sue and be sued.
Section 202 Office of the Delaware Trustee; Principal Place of Business
The address of the Delaware Trustee in the State of Delaware
is c/o The Bank of New York (Delaware), 23 White Clay Center, Newark, Delaware
19711, Attention: Corporate Trust Administration, or such other address in the
State of Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is c/o Central Power and Light Company, 539 North Carancahua Street, Corpus
Christi, Texas 78401-2802.
Section 203 Initial Contribution of Trust Property;
Organizational Expenses
The Trustees acknowledge receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 204 Issuance of the Preferred Securities
On [ ], 1997 the Depositor, on behalf of the Trust and
pursuant to the Original Trust Agreement, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 502 and deliver in accordance with the
Underwriting Agreement Preferred Securities Certificates, registered in the name
of the nominee of the initial Clearing Agency, in an aggregate amount of [ ]
Preferred Securities having an aggregate Liquidation Amount of $[ ], against
receipt of the aggregate purchase price of such Preferred Securities of $[ ],
which amount such Administrative Trustee shall promptly deliver to the Property
Trustee.
Section 205 Issuance of the Common Securities; Subscription
and Purchase of Debentures.
Contemporaneously with the execution and delivery of this
Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 502 and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of [ ] Common Securities having an aggregate Liquidation Amount
of $[ ] against payment by the Depositor of such amount. Contemporaneously
therewith, an Administrative Trustee, on behalf of the Trust, shall subscribe to
and purchase from the Depositor Debentures, registered in the name of the
Property Trustee on behalf of the Trust and having an aggregate principal amount
equal to $[ ], and, in satisfaction of the purchase price for such Debentures,
the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the
sum of $[ ].
Section 206. Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Debentures, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Delaware Business Trust Act.
Section 207 Authorization to Enter into Certain Transactions
(a) The Trustees shall conduct the affairs of the Trust in
accordance with the terms of this Trust Agreement. Subject to the limitations
set forth in paragraph (b) of this Section and Article VIII, and in accordance
with the following provisions (i) and (ii), the Administrative Trustees shall
have the authority to enter into all transactions and agreements determined by
the Administrative Trustees to be appropriate in exercising the authority,
express or implied, otherwise granted to the Administrative Trustees under this
Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, each Administrative
Trustee, acting singly or jointly, shall have the power and
authority to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust
Securities;
(B) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the
Trust, the Expense Agreement and the Certificate
Depository Agreement and such other agreements or
documents as may be necessary or desirable in
connection with the purposes and function of the
Trust;
(C) assisting in the registration of the
Preferred Securities under the Securities Act of
1933, as amended, and under state securities or
blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust
Indenture Act;
(D) assisting in the listing of the
Preferred Securities upon such securities exchange
or exchanges as shall be determined by the
Depositor and the registration of the Preferred
Securities under the Securities Exchange Act of
1934, as amended, and the preparation and filing
of all periodic and other reports and other
documents pursuant to the foregoing;
(E) the sending of notices (other than
notices of default) and other information
regarding the Trust Securities and the Debentures
to the Securityholders in accordance with this
Trust Agreement;
(F) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in
accordance with this Trust Agreement;
(G) to the extent provided in this Trus
Agreement, the winding up of the affairs of and
liquidation of the Trust and the preparation,
execution and filing of the certificate of
cancellation with the Secretary of State of the
State of Delaware;
(H) to take all action that may be necessary
or appropriate for the preservation and the
continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory
business trust under the laws of the State of D
elaware and of each other jurisdiction in which
such existence is necessary to protect the limited
liability of the Holders of the Preferred
Securities or to enable the Trust to effect the
purposes for which the Trust was created; and
(I) the taking of any action incidental to
the foregoing as the Administrative Trustees may
from time to time determine is necessary or
advisable to give effect to the terms of this
Trust Agreement for the benefit of the
Securityholders (without consideration of the
effect of any such action on any particular
Securityholder).
(ii) As among the Trustees, the Property Trustee
shall have the power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(A) the establishment of the Payment
Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal
and any other payments made in respect of the
Debentures in the Payment Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities
in accordance with the terms of this Trust
Agreement;
(E) the exercise of all of the rights,
powers and privileges of a holder of the
Debentures;
(F) the sending of notices of default and
other information regarding the Trust Securities
and the Debentures to the Securityholders in
accordance with this Trust Agreement;
(G) the distribution of the Trust Property
in accordance with the terms of this Trust
Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust;
(I) after an Event of Default, the taking of
any action incidental to the foregoing as the
Property Trustee may from time to time determine
is necessary or advisable to give effect to the
terms of this Trust Agreement and protect and
conserve the Trust Property for the benefit of the
Securityholders (without consideration of the
effect of any such action on any particular
Securityholder);
(J) registering transfers of the Trust
Securities in accordance with this Trust
Agreement; and
(K) except as otherwise provided in this
Section 207(a)(ii), the Property Trustee shall
have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set
forth in Section 207(a)(i).
(b) So long as this Trust Agreement remains in
effect, the Trust (or the Trustees acting on behalf of the
Trust) shall not undertake any business, activities or
transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees shall not
(i) acquire any investments or engage in any activities not
authorized by this Trust Agreement, (ii) sell, assign,
transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided
herein, (iii) take any action that would cause the Trust to
fail or cease to qualify as a "grantor trust" for United
States federal income tax purposes, (iv) incur any
indebtedness for borrowed money or issue any other debt or
(v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The
Administrative Trustees shall defend all claims and demands
of all Persons at any time claiming any Lien on any of the
Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the
Preferred Securities, the Depositor shall have the right and
responsibility to assist the Trust with respect to, or
effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the
following prior to the date of this Trust Agreement are
hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust
with the Commission and the execution on behalf of the
Trust of a registration statement on the appropriate
form in relation to, among other securities, the
Preferred Securities and the Debentures, including any
amendments thereto;
(ii) the determination of the states in
which to take appropriate action to qualify or register
for sale all or part of the Preferred Securities, the
Debentures and the Guarantee and to do any and all such
acts, other than actions which must be taken by or on
behalf of the Trust, and advise the Trustees of actions
they must take on behalf of the Trust, and prepare for
execution and filing any documents to be executed and
filed by the Trust or on behalf of the Trust, as the
Depositor deems necessary or advisable in order to
comply with the applicable laws of any such States;
(iii) the preparation for filing by the
Trust and execution on behalf of the Trust of an
application to the New York Stock Exchange or any other
national stock exchange or other organizations for
listing upon notice of issuance of any Preferred
Securities or Debentures, if applicable, and to file or
cause an Administrative Trustee to file thereafter with
such exchange or organization such notifications and
documents as may be necessary from time to time;
(iv) the preparation for filing by the Trust
with the Commission and the execution on behalf of the
Trust of a registration statement on Form 8-A relating
to the registration of the Preferred Securities or
Debentures, if applicable, under Section 12(b) or 12(g)
of the Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of,
and the execution and delivery of, the Underwriting
Agreement providing for the sale of the Preferred
Securities; and
(vi) the taking of any other actions
necessary or desirable to carry out any of the
foregoing activities.
(d) Notwithstanding anything herein to the contrary,
the Administrative Trustees are authorized and directed to
conduct the affairs of the Trust and to operate the Trust so
that the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act, will
be classified as a "grantor trust" and not as an association
taxable as a corporation for United States federal income
tax purposes and so that the Debentures will be treated as
indebtedness of the Depositor for United States federal
income tax purposes. In this connection, subject to Section
1002, the Depositor and the Administrative Trustees are
authorized to take any action, not inconsistent with
applicable law or this Trust Agreement, that each of the
Depositor and the Administrative Trustees determines in
their discretion to be necessary or desirable for such
purposes.
Section 208. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
Section 209. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times
in the Property Trustee (in its capacity as such) and shall be held and
administered by the Property Trustee for the benefit of the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
Payment Account
Section 301. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee
shall establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to time in the Paymen
Account shall be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as herein
provided, including (and subject to) any priority of payments provided for
herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
Distributions; Redemption
Section 401. Distributions.
(a) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Trust available for
the payment of Distributions. Distributions shall accumulate from [ ], 1997,
and, except during any Extension Period with respect to the Debentures, shall be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing on [ ], 1997. If any date on which a Distribution is
otherwise payable on the Trust Securities is not a Business Day, then the
payment of such Distribution shall be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) with the same force and effect as if made on such date (each date on
which distributions are payable in accordanc with this Section 401(a) a
"Distribution Date").
(b) The Trust Securities represent undivided beneficial
interests in the Trust Property, and, as a practical matter, the Distributions
on the Trust Securities shall be payable at a rate of [ ]% per annum of the
Liquidation Amount of the Trust Securities. The amount of Distributions payable
for any full period shall be computed on the basis of a 360-day year of twelve
30-day months. The amount of Distributions for any partial period shall be
computed on the basis of the number of days elapsed in a 360-day year of twelve
30-day months. During any Extension Period with respect to the Debentures,
Distributions on the Preferred Securities will be deferred for a period equal to
the Extension Period. The amount of Distributions payable for any period shall
include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the
Property Trustee solely from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand and
immediately available in the Payment Account for the payment of such
Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities and, if the Preferred Securities
are in book-entry form and registered to the Clearing Agency or its nominee,
will be paid by the Clearing Agency or its nominee to the Owners thereof, on the
relevant record date, which shall be one Business Day prior to such Distribution
Date; provided, however, that in the event that the Preferred Securities do not
remain in book-entry-only form, the relevant record date shall be the date 15
days prior to the relevant Distribution Date.
Section 402. Redemption.
(a) On each Debenture Redemption Date and on the stated
maturity of the Debentures, the Trust will be required to redeem a Like Amount
of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date to each Holder of Trust Securities to
be redeemed, at such Holder's address appearing in the Security Register. The
Trustee shall have no responsibility for the accuracy of any CUSIP number
contained in such notice. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust
Securities are to be redeemed, the identification and the total Liquidation
Amount of the particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption
Price will become due and payable upon each such Trust Security to be redeemed
and that distributions thereon will cease to accumulate on and after said date.
(c) The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption of Debentures. Redemptions of the Trust Securities
shall be made and the Redemption Price shall be payable on each Redemption Date
only to the extent that the Trust has immediately available funds then on hand
and available in the Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption
in respect of any Preferred Securities, then, by 12:00 noon, New York City
time, on the Redemption Date, subject to Section 402(c), the Property Trustee
will, so long as the Preferred Securities are in book-entry-only form, deposit
with the Clearing Agency for the Preferred Securities funds sufficient to pay
the applicable Redemption Price and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the holders thereof.
If the Preferred Securities are no longer in book-entry-only form, the Property
Trustee, subject to Section 402(c), will deposit with the Paying Agent funds
sufficient to pay the applicable Redemption Price and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their Preferred Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Register for the
Trust Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of Securityholders
holding Trust Securities so called for redemption will cease, except the right
of such Securityholders to receive the Redemption Price and any Distribution
payable on or prior to the Redemption Date, but without interest, and such
Securities will cease to be Outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case, with the same force and effect as if made on such date. In the event
that payment of the Redemption Price in respect of any Trust Securities called
for redemption is improperly withheld or refused and not paid either by the
Trust or by the Depositor pursuant to the Guarantee, Distributions on such Trust
Securities will continue to accrue, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities to
the date such Redemption Price is actually paid, in which case th actual payment
date will be the date fixed for redemption for purposes of calculating the
Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities
shall be made to the recordholders thereof as they appear on the Securities
Register for the Trust Securities on the relevant record date, which shall be
one Business Day prior to the relevant Redemption Date; provided, however, that
in the event that the Preferred Securities do not remain in book-entry-only
form, the relevant record date shall be the date fifteen days prior to the
relevant Redemption Date.
(f) Subject to Section 403(a), if less than all the
Outstanding Trust Securities are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of Trust Securities to be redeemed shall be
allocated on a pro rata basis (based on Liquidation Amounts) among the Common
Securities and the Preferred Securities. The particular Preferred Securities to
be redeemed shall be selected on a pro rata basis not more than 60 days prior to
the Redemption Date by the Property Trustee from the Outstanding Preferred
Securities not previously called for redemption, by such method (including,
without limitation, by lot) as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or an integral multiple of $25 in excess thereof) of the
Liquidation Amount of Preferred Securities of a denomination larger than $25.
The Property Trustee shall promptly notify the Security Registrar in writing of
the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Preferred Securities which has been or is to be redeemed.
Section 403. Subordination of Common Securities.ation of Common Securities.
(a) Payment of Distributions (including Additional Sums, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 402(f), pro rata among the Common
Securities and the Preferred Securities based on the Liquidation Amount of the
Trust Securities; provided, however, that if on any Distribution Date or
Redemption Date any Event of Default resulting from a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Sums, if applicable) on, or Redemption Price of, any Common Security,
and no other payment on account of the redemption, liquidation or other
acquisition of Common Securities, shall be made unless payment in full in cash
of all accumulated and unpaid Distributions (including Additional Sums, if
applicable) on all Outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all Outstanding Preferred
Securities then called for redemption, shall have been made or provided for, and
all funds immediately available to the Property Trustee shall first be applied
to the payment in full in cash of all Distributions (including Additional Sums,
if applicable) on, or the Redemption Price of, Preferred Securities then due and
payable.
(b) In the case of the occurrence of any Event of Default
resulting from a Debenture Event of Default, the Holder of Common Securities
will be deemed to have waived any right to act with respect to any such Event of
Default under this Trust Agreement until the effect of all such Events of
Default with respect to the Preferred Securities shall have been cured, waived
or otherwise eliminated. Until any such Event of Default under this Trust
Agreement with respect to the Preferred Securities shall have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the Holders of the Preferred Securities and not the Holder of the Common
Securities, and only the Holders of the Preferred Securities will have the right
to direct the Property Trustee to act on their behalf.
Section 404. Payment Procedures.
Payments of Distributions (including Additional Sums, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which shall credit the relevant Persons' accounts at such Clearing Agency
on the applicable distribution dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Common Securityholder.
Section 405. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States federal, state and local tax
and information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
furnished to such Securityholder or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor with a copy
of all such returns and reports promptly after such filing or furnishing. The
Property Trustee shall comply with United States federal withholding and backup
withholding tax laws and information reporting requirements with respect to any
payments to Securityholders under the Trust Securities.
Section 406 Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums, the
Property Trustee at the direction of an Administrative Trustee or Depositor
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United States
or any other taxing authority.
ARTICLE V
Trust Securities Certificates
Section 501. Initial Ownership.
Upon the creation of the Trust and the contribution by the
Depositor pursuant to Section 203 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are outstanding,
the Depositor shall be the sole beneficial owner of the Trust.
Section 502 The Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in
minimum denominations of $25 Liquidation Amount and integral multiples of $25 in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $25 Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of the Trust by manual
signature of at least one Administrative Trustee. Trust Securities Certificates
bearing the manual signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 504, 511
and 513.
Section 503 Execution and Delivery of Trust Securities Certificates
On the Closing Date, the Administrative Trustees shall cause
Trust Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 204 and 205, to be executed on behalf of the Trust by at least one of
the Administrative Trustees and delivered to or upon the written order of the
Depositor, signed by its President, General Manager, the Treasurer or any
Assistant Treasurer without further corporate action by the Depositor, in
authorized denominations.
Section 504. Registration of Transfer and Exchange of Preferred Securities
Certificates.
The Depositor shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 508, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Preferred Securities Certificates (herein referred to as the "Securities
Register") in which the registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and Common
Securities Certificates (subject to Section 510 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Property Trustee shall
be the initial Securities Registrar.
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
508, the Administrative Trustees or any one of them shall execute and deliver,
in the name of the designated transferee or transferees, one or more new
Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such Administrative
Trustee or Trustees. The Securities Registrar shall not be required to register
the transfer of any Preferred Securities that have been called for redemption.
At the option of a Holder, Preferred Securities Certificates may be exchanged
for other Preferred Securities Certificates in authorized denominations of the
same class and of a like aggregate Liquidation Amount upon surrender of the
Preferred Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 508.
Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Property Trustee and
the Securities Registrar duly executed by the Holder or his attorney duly
authorized in writing. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Property Trustee in accordance with its customary practice. The Trust
shall not be required to (i) issue, register the transfer of, or exchange any
Preferred Securities during a period beginning at the opening of business 15
calendar days before the date of mailing of a notice of redemption of any
Preferred Securities called for redemption and ending at the close of business
on the day of such mailing or (ii) register the transfer of or exchange any
Preferred Securities so selected for redemption, in whole or in part, except the
unredeemed portion of any such Preferred Securities being redeemed in part.
No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the Securities
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Preferred Securities Certificates.
Section 505 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates
If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and make available for delivery, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
Section 506 Persons Deemed Securityholders.
The Trustees, the Paying Agent and the Securities Registrar
shall treat the Person in whose name any Trust Securities Certificate shall be
registered in the Securities Register as the owner of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and neither the Trustees nor the Securities Registrar shal
be bound by any notice to the contrary. Nothing in this provision shall be
construed to prevent the Owners from having an undivided beneficial interest in
the assets of the Trust.
Section 507. Access to List of Securityholders' Names and Addresses
At any time when the Property Trustee is not also acting as
the Securities Registrar, the Administrative Trustees or the Depositor shall
furnish or cause to be furnished (a) to the Property Trustee, semi-annually on
or before January 15 and July 15 in each year, a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Securityholders as of the most recent Record Date and (b) to the Property
Trustee, promptly after receipt by any Administrative Trustee or the Depositor
of a request therefor from the Property Trustee in order to enable the Property
Trustee to discharge its obligations under this Trust Agreement, in each case to
the extent such information is in the possession or control of the
Administrative Trustees or the Depositor and is not identical to a previously
supplied list or has not otherwise been received by the Property Trustee in its
capacity as Securities Registrar. The rights of Securityholders to communicate
with other Securityholders with respect to their rights under this Trust
Agreement or under the Trust Securities, and the corresponding rights of the
Trustee shall be as provided in the Trust Indenture Act. Each Holder, by
receiving and holding a Trust Securities Certificate, and each owner shall be
deemed to have agreed not to hold the Depositor, the Property Trustee or the
Administrative Trustees accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
Section 508. Maintenance of Office or Agency.
The Administrative Trustees shall maintain in The City of New
York, an office or offices or agency or agencies where Preferred Securities
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Trustees in respect of the Trust
Securities Certificates may be served. The Administrative Trustees initially
designate the principal corporate trust office of the Property Trustee, 101
Barclay Street, New York, NY 10286, as the principal corporate trust office for
such purposes. The Administrative Trustees shall give prompt written notice to
the Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.
Section 509. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Securityholders
from the Payment Account and if the Preferred Securities are held in book-entry
form and registered to the Clearing Agency or its nominee, the Clearing Agency
or its nominee will in turn make Distributions to the Owners thereof, and the
Paying Agent shall report the amounts of such distributions to the Property
Trustee and the Administrative Trustees. Any Paying Agent shall have the
revocable power to withdraw funds from the Payment Account for the purpose of
making the Distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying Agent
shall initially be the Property Trustee, and any co-paying agent chosen by the
Property Trustee, and acceptable to the Administrative Trustees and the
Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Depositor. In the event that the Property Trustee shall
no longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees to execute and deliver to the Trustees
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 801, 803 and 806 shall apply to
the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
Section 510. Ownership of Common Securities by Depositor
On the Closing Date, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the fullest extent
permitted by law, any attempted transfer of the Common Securities (other than a
transfer in connection with a merger or consolidation of the Depositor into
another corporation or transfer of assets substantially as an entirety pursuant
to Section 10.01 of the Indenture) shall be void. The Administrative Trustees
shall cause each Common Securities Certificate issued to the Depositor to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 511. Book-Entry Preferred Securities Certificates; Common
Securities Certificate
(a) The Preferred Securities Certificates, upon original
issuance, will be issued in the form of a typewritten Preferred Securities
Certificate or Certificates representing Book-Entry Preferred Securities
Certificates, to be delivered to or held on behalf of The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of, the Trust. Such
Book-Entry Preferred Securities Certificate or Certificates shall initially be
registered on the Securities Register in the name of Cede & Co., the nominee of
the initial Clearing Agency, and no beneficial owner will receive a Definitive
Preferred Securities Certificate representing such beneficial owner's interest
in such Preferred Securities, except as provided in Section 513. Unless and
until Definitive Preferred Securities Certificates have been issued to
beneficial owners pursuant to Section 513:
(i) the provisions of this Section 511(a) shall
be in full force and effect;
(ii) the Securities Registrar, the Paying Agent and
the Trustees shall be entitled to deal with the Clearing
Agency for all purposes of this Trust Agreement relating t
the Book Entry Preferred Securities Certificates (including
the payment of the Liquidation Amount of and Distributions
on the Book-Entry Preferred Securities) as the sole Holder
of Book-Entry Preferred Securities and shall have no
obligations to deal with the Owners thereof;
(iii) to the extent that the provisions of this
Section 511 conflict with any other provisions of this Trust
Agreement, the provisions of this Section 511 shall
control; and
(iv) the rights of the Owners of the Book-Entry
Preferred Securities Certificates shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Owners and
the Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Certificate Depository Agreement, unless and
until Definitive Preferred Securities Certificates are
issued pursuant to Section 513, the initial Clearing Agency
will make book-entry transfers among the Clearing Agency
Participants and receive and transmit payments on the
Preferred Securities to such Clearing Agency Participants.
Any Clearing Agency designated pursuant hereto will not be
deemed an agent of the Trustees for any purpose.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate.
Section 512. Notices to Clearing Agency.
To the extent that a notice or other communication to the
Owners is required under this Trust Agreement, unless and until Definitive
Preferred Securities Certificates shall have been issued to Owners pursuant to
Section 513, the Trustees shall give all such notices and communications
specified herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
Section 513. Definitive Preferred Securities Certificates.e Preferred
Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Preferred Securities Certificates, and the
Depositor is unable to locate a qualified successor, (b) the Depositor at its
option advises the Trustees in writing that it elects to terminate the
book-entry system through the Clearing Agency, or (c) after the occurrence of a
Debenture Event of Default, Owners of Preferred Securities Certificates
representing beneficial interests aggregating at least a majority of the
Liquidation Amount advise the Property Trustee in writing that the continuation
of a book-entry system through the Clearing Agency is no longer in the best
interests of the Owners of Preferred Securities Certificates, then the Property
Trustee shall notify the Clearing Agency, and the Clearing Agency shall notify
all Owners of Preferred Securities Certificates, of the occurrence of any such
event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Property Trustee of the typewritten Preferred
Securities Certificate or Certificates representing the Book-Entry Preferred
Securities Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in accordance with the instructions
of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Preferred Securities Certificates, the Trustees shall
recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
Section 514. Rights of Securityholders.
(a) The legal title to the Trust Property is vested
exclusively in the Property Trustee (in its capacity as such) in accordance with
Section 209, and the Securityholders and/or Owners shall not have any right or
title therein other than the rights conferred by their Trust Securities and they
shall have no right to call for any partition or division of property, profits
or rights of the Trust except as described below. The Trust Securities shall be
personal property giving only the rights specifically set forth therein and in
this Trust Agreement. The Trust Securities shall have no preemptive or similar
rights. When issued and delivered to Holders of the Preferred Securities against
payment of the purchase price therefor, the Preferred Securities will be fully
paid and nonassessable interests in the Trust. The Holders of the Preferred
Securities, in their capacities as such, shall 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.
(b) (i) For so long as any Preferred Securities remain
Outstanding, if, upon a Debenture Event of Default, the Debenture Trustee fails
or the holders of not less than 33% in principal amount of the outstanding
Debentures fail to declare the principal of all of the Debentures to be
immediately due and payable, the Holders of at least 33% in Liquidation Amount
of the Preferred Securities then Outstanding shall have such right by a notice
in writing to the Depositor and the Debenture Trustee; and upon any such
declaration such principal amount of and the accrued interest on all of the
Debentures shall become immediately due and payable, provided that the payment
of principal and interest on such Debentures shall remain subordinated to the
extent provided in the Indenture.
(ii) The provisions of subsection (b)(i), however,
are subject to the condition that if, at any time after such
a declaration of acceleration with respect to the Debentures
has been made, and before a judgment or decree for payment
of the money due has been obtained by the Debenture Trustee
as provided in the Indenture, the Depositor shall pay or
shall deposit with the Debenture Trustee a sum sufficient to
pay all amounts required to be paid pursuant to Section 6.01
(c) of the Indenture with respect to a rescission and
annulment of such a declaration and any and all Events of
Default with respect to the Debentures, other than
nonpayment of principal on Debentures which shall have not
have become due by their terms, shall have been remedied or
waived as provided in Section 6.06 of the Indenture, then
the Holders of a majority in Liquidation Amount of the
Preferred Securities, by written notice to the Depositor and
the Debenture Trustee, may rescind and annul such
declaration and its consequences, but no such rescission and
annulment shall extend to or shall affect any subsequent
default, or shall impair any right consequent thereon.
(c) For so long as any Preferred Securities remain
Outstanding, if, upon a Debenture Event of Default, the Debenture Trustee fails
to proceed to enforce any right available to the Holders of the Debentures for
60 days, the Holders of at least 33% in Liquidation Amount of the Preferred
Securities then Outstanding shall, to the fullest extent permitted by law, have
the right to directly institute proceedings for enforcement of such rights.
(d) For so long as any Preferred Securities remain
Outstanding, to the fullest extent permitted by law, upon the occurrence of a
Debenture Event of Default specified in Section 6.01(a)(1) or 6.01(a)(2) of the
Indenture, any Holder of Preferred Securities shall have the right to institute
a proceeding directly against the Depositor for enforcement of payment to such
Holder of the principal of or interest on Debentures having a principal amount
equal to the Liquidation Amount of the Preferred Securities of such Holder after
the due date specified for such payment in the Debentures. Except as set forth
in Section 514(b), (c) and (d), the Holders of Preferred Securities shall have
no right to exercise directly any right or remedy available to the holders of,
or in respect of, the Debentures.
(e) The Depositor will be subrogated to the rights of th
Holder of the Preferred Securities to the extent of any payment made by the
Depositor to any such Holder of Preferred Securities pursuant to Section 514(c)
or (d) hereof.
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 601. Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 514, 810
and 1002 and in the Indenture and as otherwise required by law, no Holder o
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Debenture Trustee with respect to
such Debentures, (ii) waive any past default which is waivable under Article Six
of the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of each
Holder of Outstanding Debentures affected thereby, no such consent shall be
given by the Property Trustee without the prior written consent of each holder
of Preferred Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of the Outstanding Preferred
Securities, except by a subsequent vote of the Holders of the Outstanding
Preferred Securities. The Property Trustee shall notify each Holder of the
Outstanding Preferred Securities of any notice of default received from the
Debenture Trustee with respect to the Debentures. In addition to obtaining the
foregoing approvals of the Holders of the Preferred Securities, prior to taking
any of the foregoing actions, the Trustees shall, at the expense of the
Depositor, obtain an Opinion of Counsel experienced in such matters to the
effect that the Trust will continue to be classified as a "grantor trust" and
not as an association taxable as a corporation for United States federal income
tax purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides
for, or the Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Preferred Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Preferred Securities as a class will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a majority in
Liquidation Amount of the Outstanding Preferred Securities. No amendment to this
Trust Agreement may be made if, as a result of such amendment, the Trust would
cease to be classified as a "grantor trust" or would be classified as an
association taxable as a corporation for United States federal income tax
purposes.
Section 602. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders,
stating the time, place and purpose of the meeting, shall be given by the
Property Trustee pursuant to Section 1008 to each Preferred Securityholder of
record, at his registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.
Section 603. Meetings of Preferred Securityholders
No annual meeting of Securityholders is required to be held.
The Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
33% of the Preferred Securities (based upon their aggregate Liquidation Amount)
and the Administrative Trustees or the Property Trustee may, at any time in
their discretion, call a meeting of Preferred Securityholders to vote on any
matters as to which the Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their aggregate Liquidation Amount), present in
person or by proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by
the Preferred Securityholders of record present, in person or by proxy, holding
more than a majority of the Preferred Securities (based upon their aggregate
Liquidation Amount) held by the Preferred Securityholders of record present,
either in person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
Section 604. Voting Rights.
Securityholders shall be entitled to one vote for each $25 of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
Section 605. Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled
to vote thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Administrative
Trustees, or with such other officer or agent of the Trust as the Administrative
Trustees may direct, for verification prior to the time at which such vote shall
be taken. When Trust Securities are held jointly by several persons, any one of
them may vote at any meeting in person or by proxy in respect of such Trust
Securities, but if more than one of them shall be present at such meeting in
person or by proxy, and such joint owners or their proxies so present disagree
as to any vote to be cast, such vote shall not be received in respect of such
Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and, the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.
Section 606. Securityholder Action by Written Consent
Any action which may be taken by Securityholders at a meeting
may be taken without a meeting if Securityholders holding more than a majority
of all Outstanding Trust Securities (based upon their aggregate Liquidation
Amount) entitled to vote in respect of such action (or such larger proportion
thereof as shall be required by any express provision of this Trust Agreement)
shall consent to the action in writing (based upon their aggregate Liquidation
Amount).
Section 607. Record Date for Voting and Other Purposes
For the purposes of determining the Securityholders who are
entitled to notice of and to vote at any meeting or by written consent, or to
participate in any Distribution on the Trust Securities in respect of which a
record date is not otherwise provided for in this Trust Agreement, or for the
purpose of any other action, the Administrative Trustees may from time to time
fix a date, not more than 90 days prior to the date of any meeting of
Securityholders or the payment of Distribution or other action, as the case may
be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
Section 608. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 801) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
Whether a Person is a Holder of Preferred Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee (as defined
in the Guarantee), the Trust or any Person.
Section 609. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII
Representations and Warranties
Section 701. Representations and Warranties of the Bank and the
Property Trustee.
The Bank and the Property Trustee, each severally on behalf of and as to
itself, as of the date hereof, and each Successor Property Trustee at the time
of the Successor Property Trustee's acceptance of its appointment as Property
Trustee hereunder (the term "Bank" being used to refer to such Successor
Property Trustee in its separate corporate capacity) hereby represents and
warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Bank is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New York;
(b) the Bank has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and constitutes the valid and legally
binding agreement of the Property Trustee enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(d) the execution, delivery and performance by the Property
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate or other action on the part of the Property Trustee and does not
require any approval of stockholders of the Bank and such execution, delivery
and performance will not (i) violate the Bank's charter or by-laws, (ii) violate
any provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of, any Lien on any
properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or instrument
to which the Property Trustee or the Bank is a party or by which it is bound, or
(iii) violate any law, governmental rule or regulation of the United States or
the State of New York , as the case may be, governing the banking or trust
powers of the Bank or the Property Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Bank;
(e) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein or therein requires the
consent or approval of, the giving of notice to, the registration with or the
taking of any other action with respect to any governmental authority or agency
under any existing federal law governing the banking or trust powers of the Bank
or the Property Trustee, as the case may be, under the laws of the United States
or the State of New York; and
(f) there are no proceedings pending or, to the best of the
Property Trustee's knowledge, threatened against or affecting the Bank or the
Property Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power and
authority of the Property Trustee to enter into or perform its obligations as
one of the Trustees under this Trust Agreement.
Section 702. Representations and Warranties of the Delaware Bank
and the Delaware Trustee.
The Delaware Bank and the Delaware Trustee, each severally on behalf of and
as to itself, as of the date hereof, and each Successor Delaware Trustee at the
time of the Successor Delaware Trustee's acceptance of appointment as Delaware
Trustee hereunder (the term "Delaware Bank" being used to refer to such
Successor Delaware Trustee in its separate corporate capacity), hereby
represents and warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware;
(b) the Delaware Bank has full corporate power, authority and
legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed
and delivered by the Delaware Trustee and constitutes the valid and legally
binding agreement of the Delaware Trustee enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(d) the execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate or other action on the part of the Delaware Trustee and does not
require any approval of stockholders of the Delaware Bank and such execution,
delivery and performance will not (i) violate the Delaware Bank's charter or
by-laws, (ii) violate any provision of, or constitute, with or without notice or
lapse of time, a default under, or result in the creation or imposition of, any
Lien on any properties included in the Trust Property pursuant to the provisions
of, any indenture, mortgage, credit agreement, license or other agreement or
instrument to which the Delaware Bank or the Delaware Trustee is a party or by
which it is bound, or (iii) violate any law, governmental rule or regulation of
the United States or the State of Delaware, as the case may be, governing the
banking or trust powers of the Delaware Bank or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Delaware Bank or the Delaware Trustee;
(e) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware Trustee contemplated herein or therein requires the
consent or approval of, the giving of notice to, the registration with or the
taking of any other action with respect to any governmental authority or agency
under any existing federal law governing the banking or trust powers of the
Delaware Bank or the Delaware Trustee, as the case may be, under the laws of the
United States or the State of Delaware; and
(f) there are no proceedings pending or, to the best of
the Delaware Trustee's knowledge, threatened against or affecting the Delaware
Bank or the Delaware Trustee in any court or before any governmental authority,
agency or arbitration board or tribunal which, individually or in the aggregate,
would materially and adversely affect the Trust or would question the right,
power and authority of the Delaware Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Section 703. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit
of the Securityholders that:
(a) the Trust Securities Certificates issued on the Closing
Date on behalf of the Trust have been duly authorized and will have been, duly
and validly executed, issued and delivered by the Administrative Trustees
pursuant to the terms and provisions of, and in accordance with the requirements
of, this Trust Agreement and the Securityholders will be, as of such date,
entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental
charges payable by the Trust (or the Trustees on behalf of the Trust) under the
laws of the State of Delaware or any political subdivision thereof in
connection with the execution, delivery and performance by the Bank, the
Property Trustee or the Delaware Trustee, as the case may be, of this Trust
Agreement.
ARTICLE VIII
The Trustees
Section 801. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be
as provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
To the extent that, at law or in equity, an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Administrative Trustee's good faith
reliance on the provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they restrict the duties and liabilities of the
Administrative Trustees otherwise existing at law or in equity, are agreed by
the Depositor and the Securityholders to replace such other duties and
liabilities of the Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms hereof.
Each Securityholder, by its acceptance of a Trust Security, agrees that it will
look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable in respec
of any Trust Security or for any other liability in respect of any Trust
Security. This Section 801(b) does not limit the liability of the Trustees
expressly set forth elsewhere in this Trust Agreement or, in the case of the
Property Trustee, in the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any
error of judgment made in good faith by an authorized
officer of the Property Trustee, unless it shall be proved
that the Property Trustee was negligent in ascertaining the
pertinent facts;
(ii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders
of not less than a majority in Liquidation Amount of the
Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of
the Debentures and the Payment Account shall be to deal with
such Property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to
the protections and limitations on liability afforded to the
Property Trustee under this Trust Agreement and the Trust
Indenture Act;
(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree with the Depositor and money held by the
Property Trustee need not be segregated from other funds
held by it except in relation to the Payment Account
maintained by the Property Trustee pursuant to Section 301
and except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or
the Depositor with their respective duties under this Trust
Agreement, nor shall the Property Trustee be liable for the
negligence, default or misconduct of the Administrative
Trustees or the Depositor.
Section 802. Certain Notices.
(a) Within 15 Business Days after the occurrence of any Event
of Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 1008, notice of
such Event of Default to the Securityholders, the Administrative Trustees and
the Depositor, unless such Event of Default shall have been cured or waived. For
purposes of this Section the term "Event of Default" means any event that is, or
after notice or lapse of time or both would become, an Event of Default.
(b) The Administrative Trustees shall transmit, to the
Securityholders in the manner and to the extent provided in Section 1008, notice
of the Depositor's election to begin or further extend an Extension Period on
the Debentures (unless such election shall have been revoked) within the time
specified for transmitting such notice to the holders of the Debentures pursuant
to the Indenture.
Section 803. Certain Rights of Property Trustee. Certain Rights of
Property Trustee.
Subject to the provisions of Section 801:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution, Opinion of
Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties.
(b) if (i) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses of action
or (ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with other provisions contained
herein or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to which the
Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the
Administrative Trustees contemplated by this Trust Agreement shall be
sufficiently evidenced by an Officer's Certificate;
(d) whenever in the administration of this Trust Agreement,
the Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly delivered by
the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any filing
under tax or securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel of its
choice (which counsel may be counsel to the Depositor or any of its Affiliates)
and the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon and in accordance with such advice, such
counsel may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees; the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust Agreement
from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any of the Securityholders pursuant to this Trust
Agreement, unless such Securityholders shall have offered to the Property
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper
or document, unless requested in writing to do so by one or more
Securityholders, but the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, provided that the Property Trustee shall be
responsible for its own negligence or recklessness with respect to selection of
any agent or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the Property
Trustee (i) may request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 804. Not Responsible for Recitals or
Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
Section 805. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 808 and 813 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
Section 806. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to such Trustee's negligence, bad faith or
willful misconduct (or, in the case of the Administrative Trustees,
any such expense, disbursement or advance as may be attributable to
his or her gross negligence, bad faith or willful misconduct); and
(c) to indemnify each of the Trustees or any predecessor
Trustee for, and to hold the Trustees harmless against, any loss,
damage, claims, liability, penalty or expense incurred without
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Trust Agreement,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
No Trustee may claim any lien or charge on any Trust Property
as a result of any amount due pursuant to this Section 806.
Section 807. Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder
with respect to the Trust Securities. The Property Trustee shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each Administrative
Trustee shall be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with
respect to the Trust Securities. The Delaware Trustee shall either be (i) a
natural person who is at least 21 years of age and a resident of the State of
Delaware or (ii) a legal entity with its principal place of business in the
State of Delaware and that otherwise meets the requirements of applicable
Delaware law that shall act through one or more persons authorized to bind such
entity.
Section 808. Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
Section 809. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any par
of the Trust Property may at the time be located, the Depositor shall have power
to appoint, and upon the written request of the Property Trustee, the Depositor
shall for such purpose join with the Property Trustee in the execution, delivery
and performance of all instruments and agreements necessary or proper to
appoint, one or more Persons approved by the Property Trustee either to act as
co-trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to the extent required by law to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Depositor does not join
in such appointment within 15 days after the receipt by it of a request so to
do, or in case a Debenture Event of Default has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment. Any co-trustee
or separate trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity.
Should any written instrument from the Depositor be required
by any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged, and
delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:
(a) The Trust Securities shall be executed and delivered and
all rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees specified
hereunder, shall be exercised, solely by such Trustees and not by such
co-trustee or separate trustee.
(b) The rights, powers, duties and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or imposed
upon and exercised or performed by the Property Trustee or by the
Property Trustee and such co-trustee or separate trustee jointly, as
shall be provided in the instrument appointing such co-trustee or
separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the
Property Trustee shall be incompetent or unqualified to perform such
act, in which event such rights, powers, duties and obligations shall
be exercised and performed by such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor,
may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, in case a Debenture Event
of Default has occurred and is continuing, the Property Trustee shall
have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the
Depositor. Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the execution,
delivery and performance of all instruments and agreements necessary
or proper to effectuate such resignation or
removal. A successor to any co-trustee or separate trustee so resigned
or removed may be appointed in the manner provided in this Section
809.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee or any other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of
any act of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
Section 810. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 811.
Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time with respect to the Trust Securities by giving written notice
thereof to the Securityholders. If the instrument of acceptance by the successor
Trustee required by Section 811 shall not have been delivered to the Relevant
Trustee within 30 days after the giving of such notice of resignation, the
Relevant Trustee may petition, at the expense of the Depositor, any court of
competent jurisdiction for the appointment of a successor Relevant Trustee with
respect to the Trust Securities.
Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Common Securityholder. If a
Debenture Event of Default shall have occurred and be continuing, the Property
Trustee or the Delaware Trustee, or both of them, may be removed at such time by
Act of the Holders of a majority in Liquidation Amount of the Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any cause,
at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees with respect to the Trust Securities and the Trust, and the successor
Trustee shall comply with the applicable requirements of Section 811. If the
Property Trustee or the Delaware Trustee shall resign, be removed or become
incapable of continuing to act as the Property Trustee or the Delaware Trustee,
as the case may be, at a time when a Debenture Event of Default shall have
occurred and is continuing, the Preferred Securityholders, by Act of the
Securityholders of a majority in Liquidation Amount of the Preferred Securities
then Outstanding delivered to the retiring Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees with respect to the Trust
Securities and the Trust, and such successor Trustee shall comply with the
applicable requirements of Section 811. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative Trustee, at a
time when a Debenture Event of Default shall have occurred and be continuing,
the Common Securityholder, by Act of the Common Securityholder delivered to an
Administrative Trustee, shall promptly appoint a successor Administrative
Trustee or Administrative Trustees with respect to the Trust Securities and the
Trust, and such successor Administrative Trustee or Administrative Trustees
shall comply with the applicable requirements of Section 811. If no successor
Relevant Trustee with respect to the Trust Securities shall have been so
appointed by the Common Securityholder or the Preferred Securityholders and
accepted appointment in the manner required by Section 811, any Securityholder
who has been a Securityholder of Trust Securities for at least six months may,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Relevant Trustee with
respect to the Trust Securities.
The Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all Securityholders
in the manner provided in Section 1008 and shall give notice to the Depositor.
Each notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of remaining Administrative Trustees if
there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees set forth in Section 807).
Section 811. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee with
respect to the Trust Securities and the Trust, the retiring Relevant Trustee and
each successor Relevant Trustee with respect to the Trust Securities shall
execute and deliver an amendment hereto wherein each successor Relevant Trustee
shall accept such appointment and which (a) shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and to vest in, each
successor Relevant Trustee all the rights, powers, trusts and duties of the
retiring Relevant Trustee with respect to the Trust Securities and the Trust and
(b) shall add to or change any of the provisions of this Trust Agreement as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Relevant Trustee, it being understood that nothing
herein or in such amendment shall constitute such Relevant Trustees co-trustees
of the same trust and that each such Relevant Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Relevant Trustee and upon the execution and
delivery of such amendment the resignation or removal of the retiring Relevant
Trustee shall become effective to the extent provided therein and each such
successor Relevant Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee with respect to the Trust Securities and the Trust; but, on
request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the immediately preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at the
time of such acceptance such successor Relevant Trustee shall be qualified and
eligible under this Article.
Section 812. Merger, Conversion, Consolidation or
Succession to Business.
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Relevant Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
Section 813. Preferential Collection of Claims Against
Depositor or Trust.
If and when the Property Trustee or the Delaware Trustee shall be or become
a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).
Section 814. Reports by Property Trustee.
(a) Not later than [ ] of each year commencing with [ ] 1998
the Property Trustee shall transmit to all Securityholders in accordance with
Section 1008, and to the Depositor, a brief report dated as of such [ ] with
respect to:
(i) its eligibility under Section 807 or, in lieu
thereof, if to the best of its knowledge it has continued to be
eligible under said Section, a written statement to such effect; and
(ii) any change in the property and funds in its
possession as Property Trustee since the date of its last report and
any action taken by the Property Trustee in the performance of its
duties hereunder which it has not previously reported and which in its
opinion materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and its actions
under this Trust Agreement as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each national
securities exchange or other organization upon which the Trust Securities are
listed, with the Commission and with the Depositor.
Section 815. Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
Section 816. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314 (c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officer's Certificate.
Section 817. Number of Trustees.
(a) The number of Trustees shall be four, provided that
the Holder of all of the Common Securities by written instrument may increase
or decrease the number of Administrative Trustees. The Property Trustee and the
Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to Section 817(a), or
if the number of Trustees is increased pursuant to Section 817(a), a vacancy
shall occur. The vacancy shall be filled with a Trustee appointed in accordance
with Section 810.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 810, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
Section 818. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 207(a); and
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to the Depositor the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
Section 819. Voting.
Except as otherwise provided in this Trust Agreement, the
consent or approval of the Administrative Trustees shall require consent or
approval by not less than a majority of the Administrative Trustees.
ARTICLE IX
Termination, Liquidation and Merger
Section 901. Termination Upon Expiration Date.
Unless earlier terminated, the Trust shall automatically
terminate on [ ], 2042 (the "Expiration Date") subject to distribution of the
Trust Property in accordance with Section 904.
Section 902. Early Termination.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of,
or the dissolution or liquidation of, the Depositor;
(b) delivery of written direction to the Property Trustee by
the Depositor at any time (which direction is wholly optional and
within the discretion of the Depositor) to terminate the Trust and
distribute the Debentures to Securityholders in exchange for the
Preferred Securities in accordance with Section 904;
(c) the redemption of all of the Preferred Securities in
connection with the redemption of all of the Debentures; and
(d) an order for dissolution of the Trust shall have been
entered by a court of competent jurisdiction.
Section 903. Termination.
The respective obligations and responsibilities of the
Trustees and the Trust created and continued hereby shall terminate upon the
latest to occur of the following: (a) the distribution by the Property Trustee
to Securityholders upon the liquidation of the Trust pursuant to Section 904, or
upon the redemption of all of the Trust Securities pursuant to Section 402, of
all amounts required to be distributed hereunder upon the final payment of the
Trust Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders.
Section 904. Liquidation.
(a) If an Early Termination Event specified in clause (a),
(b), or (d) of Section 902 occurs or upon the Expiration Date, the Trust shall
be liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to each Securityholder or if the Preferred
Securities are held in book-entry form, to each Owner through the Clearing
Agency or its nominee, a Like Amount of Debentures, subject to Section 904(d).
Notice of liquidation shall be given by the Property Trustee by first-class
mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to
the Liquidation Date to each Holder of Trust Securities at such Holder's address
appearing in the Securities Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date,
the Trust Securities will no longer be deemed to be
Outstanding and any Trust Securities Certificates not
surrendered for exchange will be deemed to represent a Like
Amount of Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
certificates for Debentures, or if Section 904(d) applies
receive a Liquidation Distribution, as the Administrative
Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 902(c) or 904(d) applies, in order to
effect the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 902(c) or 904(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates (or, at the election of the Depositor a Global
Debenture, subject to the provisions of the Indenture) representing a Like
Amount of Debentures will be issued to holders of Trust Securities Certificates
upon surrender of such certificates to the Administrative Trustees or their
agent for exchange, (iii) the Depositor shall use its reasonable efforts to have
the Debentures listed on the New York Stock Exchange or on such other securities
exchange or other organization as the Preferred Securities are then listed or
traded, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to holders of Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of
this Section 904, whether because of an order for dissolution entered by a court
of competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders or if the
Preferred Securities are held in book-entry form, Owners through the Clearing
Agency or its nominee, will be entitled to receive out of the assets of the
Trust available for distribution to Securityholders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the Liquidation Amount per Trust Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, winding-up or termination, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). The holder of the Common Securities will be entitled
to receive Liquidation Distributions upon any such dissolution, winding-up or
termination pro rata (determined as aforesaid) with Holders of Preferred
Securities, except that, if a Debenture Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities.
Section 905. Mergers, Consolidations, Amalgamations or
Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 905. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the holders of the Preferred
Securities, the Trust may merge with or into, consolidate, amalgamate, be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to a trust organized as such under the laws of any state;
provided, that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities) so long
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing substantially the same powers and duties as the Property
Trustee as the holder of the Debentures, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed or traded upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Depositor has received an Opinion of Counsel to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an "investment company" under the 1940
Act and (viii) the Depositor owns all of the Common Securities of such successor
entity and guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to any other Person or
permit any other Person to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or the successor entity to be classified as other than a
"grantor trust" for United States federal income tax purposes.
ARTICLE X
Miscellaneous Provisions
Section 1001. Limitation of Rights of Securityholders.
The death or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
Section 1002. Amendment.
(a) This Trust Agreement may be amended from time to time by
the Administrative Trustees and the Depositor, without the consent of any
Securityholders, (i) as provided in Section 811 with respect to acceptance of
appointment by a successor Trustee, (ii) to cure any ambiguity, correct or
supplement any provision herein which may be inconsistent with any other
provision herein, or to make any other provisions with respect to matters or
questions arising under this Trust Agreement, that shall not be inconsistent
with the other provisions of this Trust Agreement, or (iii) to modify, eliminate
or add to any provisions of this Trust Agreement to such extent as shall be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes as a "grantor trust" at all times that any Trust Securities
are outstanding or to ensure that the Trust will not be required to register as
an "investment company" under the 1940 Act; provided, however, that in the case
of clause (ii), such action shall not adversely affect in any material respect
the interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 601(c) or Section 1002 (c)
hereof, any provision of this Trust Agreement may be amended by the
Administrative Trustees and the Depositor (i) with the consent of Trust
Securityholders representing not less than a majority (based upon Liquidation
Amounts) of the Trust Securities then Outstanding and (ii) upon receipt by the
Trustees of an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a "grantor trust" for United States
federal income tax purposes or the Trust's exemption from status of an
"investment company" under the 1940 Act.
(c) In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 603 or 606 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 603 or 606 hereof), this
paragraph (c) of this Section 1002 may not be amended.
(d) Notwithstanding any other provisions of this Trust
Agreement, no Trustee shall enter into or consent to any amendment to this Trust
Agreement which would cause the Trust to fail or cease to qualify for the
exemption from status of an "investment company" under the 1940 Act or to fail
or cease to be classified as a "grantor trust" for United States federal income
tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is
made, the Administrative Trustees shall promptly provide to the Depositor a copy
of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee
shall be required to enter into any amendment to this Trust Agreement which
affects its own rights, duties or immunities under this Trust Agreement. The
Property Trustee shall be entitled to receive an Opinion of Counsel and an
Officer's Certificate stating that any amendment to this Trust Agreement is in
compliance with this Trust Agreement.
Section 1003. Separability.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 1004. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF
THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST
AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).
Section 1005. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day which is a Business Day (except as otherwise
provided in Sections 401(a) and 402(d)), with the same force and effect as
though made on the date fixed for such payment, and no distribution shall
accumulate thereon for the period after such date.
Section 1006. Successors.
This Trust Agreement shall be binding upon and shall inure to
the benefit of any successor to the Depositor, the Trust or the Relevant
Trustee, including any successor by operation of law. Except in connection with
a consolidation, merger or sale involving the Depositor that is permitted under
Article Ten of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
Section 1007. Headings.
The Article and Section headings are for convenience only and
shall not affect the construction of this Trust Agreement.
Section 1008. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (a) in the case of a
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Central Power and
Light Company, c/o Central and South West Corporation, 1616 Woodall Rodgers
Freeway, Dallas, Texas 75202, Attention: Director, Finance, facsimile no: (214)
777-1223. Any notice to Preferred Securityholders shall also be given to such
owners as have, within two years preceding the giving of such notice, filed
their names and addresses with the Property Trustee for that purpose. Such
notice, demand or other communication to or upon a Securityholder shall be
deemed to have been sufficiently given or made, for all purposes, upon hand
delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as follows:
(a) with respect to the Property Trustee to The Bank of New York, 101 Barclay
Street, New York, New York 10286, Attention: Corporate Trust Trustee
Administration; (b) with respect to the Delaware Trustee, to 23 White Clay
Center, Newark, New Castle County, Delaware 19711, Attention: Corporate Trust
Trustee Administration; and (c) with respect to the Administrative Trustees, to
them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of CPL Capital I." Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Trust or the Property Trustee.
Section 1009. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 1009, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor (which expense shall be paid prior to the filing), it shall
file an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by the Depositor against the Trust or the commencement
of such action and raise the defense that the Depositor has agreed in writing
not to take such action and should be stopped and precluded therefrom. The
provisions of this Section 1009 shall survive the termination of this Trust
Agreement.
Section 1010. Trust Indenture Act; Conflict with
Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Trust Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which
is a trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts
with another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control. If any provision of this Trust Agreement modifies or
excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Trust Agreement
as so modified or to be excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 1011. Acceptance of Terms of Trust Agreement,
Guarantee and Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
Section 1012. Counterparts.
This Trust Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all counterparts shall together constitute but one and the same instrument.
CENTRAL POWER AND LIGHT COMPANY
By:_________________________________________
Name: [ ]
Title: Treasurer
THE BANK OF NEW YORK
as Property Trustee
By:_________________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
as Delaware Trustee
By:_________________________________________
Name:
Title:
as Administrative Trustee
as Administrative Trustee
Exhibit A
CERTIFICATE OF TRUST
OF
CPL CAPITAL I
THIS CERTIFICATE OF TRUST of CPL Capital I (the "Trust"), dated ________
__, 1997, is being duly executed and filed by the undersigned, as trustees, to
form a business trust under the Delaware Business Trust Act (12 Del. C.
Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is CPL Capital
I.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are The Bank
of New York (Delaware), 23 White Clay Center, Newark, New Castle County,
Delaware 19711.
3. Counterparts. This Certificate of Trust may be executed in one or more
counterparts, all of which together constitute one and the same instrument.
4. Effective Date. This Certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have
executed this Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK,
as Trustee
By _____________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
as Trustee
By
Name:
Title:
Wendy G. Hargus, not in her individual
capacity, but solely as Administrative Trustee
Exhibit B
________, 1997
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York
10041-0099.
Attention:[ ]
General Counsel's Office
Re: CPL Capital I Cumulative
Quarterly Income Preferred Securities, Series A
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to the
issuance and deposit with The Depository Trust Company ("DEPOSITORY TRUST
COMPANY") of CPL Capital I [ ]% Cumulative Quarterly Income Preferred
Securities, Series A (the "Preferred Securities"), of CPL Capital I, a Delaware
business trust (the "Issuer"), created pursuant to a Trust Agreement between
Central Power and Light Company, a Texas corporation ("CPL"), The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee
and the Administrative Trustees named therein. The payment of distributions on
the Preferred Securities and payments due upon liquidation of Issuer or
redemption of the Preferred Securities, to the extent the Issuer has funds
available for the payment thereof, are guaranteed by CPL to the extent set forth
in a Guarantee Agreement dated [ ], 1997 by CPL with respect to the Preferred
Securities. CPL and the Issuer propose to sell the Preferred Securities to
certain Underwriters (the "Underwriters") pursuant to an Underwriting Agreement
dated [ ], 1997 by and among the Underwriters, the Issuer and CPL, and the
Underwriters wish to take delivery of the Preferred Securities through
DEPOSITORY TRUST COMPANY. The Bank of New York acting as transfer agent and
registrar with respect to the Preferred Securities (the "Transfer Agent and
Registrar").
To induce DEPOSITORY TRUST COMPANY to accept the Preferred Securities as
eligible for deposit at DEPOSITORY TRUST COMPANY, and to act in accordance with
DEPOSITORY TRUST COMPANY's rules with respect to the Preferred Securities, the
Issuer, the Transfer Agent and Registrar and DEPOSITORY TRUST COMPANY agree
among each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to the
Underwriters, which is expected to occur on or about [ ], 1997, there shall be
deposited with DEPOSITORY TRUST COMPANY one or more global certificates
(individually and collectively, the "Global Certificate") registered in the name
of DEPOSITORY TRUST COMPANY's Preferred Securities nominee, Cede & Co.,
representing an aggregate of [ ] Preferred Securities and bearing the following
legend:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DEPOSITORY TRUST
COMPANY"), to Issuer or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of Cede &
Co. or in such other name as is requested by an authorized representative
of DEPOSITORY TRUST COMPANY (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
2. The Amended and Restated Trust Agreement of the Issuer provides for the
voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DEPOSITORY TRUST COMPANY notice of such
record date not less than 15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DEPOSITORY TRUST COMPANY a notice of
such event at least 5 business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of rights
with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DEPOSITORY TRUST COMPANY a notice
specifying: (a) the amount of and conditions, if any, applicable to the payment
of any such distribution or any such offering or issuance of rights; (b) any
applicable expiration or deadline date, or any date by which any action on the
part of the holders of Preferred Securities is required; and (c) the date any
required notice is to be mailed by or on behalf of the Issuer to holders of
Preferred Securities or published by or on behalf of the Issuer (whether by mail
or publication, the "Publication Date"). Such notice shall be sent to DEPOSITORY
TRUST COMPANY by a secure means (e.g., legible telecopy, registered or certified
mail, overnight delivery) in a timely manner designed to assure that such notice
is in DEPOSITORY TRUST COMPANY's possession no later than the close of business
on the business day before the Publication Date. The Issuer or the Transfer
Agent and Registrar will forward such notice either in a separate secure
transmission for each CUSIP number or in a secure transmission of multiple CUSIP
numbers (if applicable) that includes a manifest or list of each CUSIP number
submitted in that transmission. (The party sending such notice shall have a
method to verify subsequently the use of such means and the timeliness of such
notice.) The Publication Date shall be not less than 30 calendar days nor more
than 60 calendar days prior to the payment of any such distribution or any such
offering or issuance of rights with respect to the Preferred Securities. After
establishing the amount of payment to be made on the Preferred Securities, the
Issuer or the Transfer Agent and Registrar will notify DEPOSITORY TRUST
COMPANY's Dividend Department of such payment 5 business days prior to payment
date. The notices provided for in this paragraph shall be sent as described in
Section 9.
5. In the event of a redemption by the Issuer of the Preferred Securities,
notice specifying the terms of the redemption and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to
DEPOSITORY TRUST COMPANY not less than 30 calendar days prior to such event by a
secure means in the manner set forth in paragraph 4. Such redemption notice
shall be sent to DEPOSITORY TRUST COMPANY's Call Notification Department at
(516) 227-4164 or (516) 227-4190, and receipt of such notice shall be confirmed
by telephoning (516) 227-4070. Notice by mail or by any other means shall be
sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to
DEPOSITORY TRUST COMPANY by a secure means and in a timely manner as described
in paragraph 4. Notices to DEPOSITORY TRUST COMPANY pursuant to this paragraph
and notices of other corporate actions (including mandatory tenders, exchanges
and capital changes), shall be sent, unless notification to another department
is expressly provided for herein, by telecopy to DEPOSITORY TRUST COMPANY's
Reorganization Department at (212) 709-1093 or (212) 709-1094 and receipt of
such notice shall be confirmed by telephoning (212) 709-6884, or by mail or any
other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DEPOSITORY TRUST COMPANY shall
contain the CUSIP number or numbers of the Preferred Securities and the
accompanying designation of the Preferred Securities, which, as of the date of
this letter, is "CPL Capital I [ ]% Cumulative Quarterly Income Preferred
Securities, Series A."
8. The Issuer or the Transfer Agent and Registrar shall provide automated
notification of CUSIP-level detail for Distribution payments to DEPOSITORY TRUST
COMPANY no later than noon (Eastern Time) on the payment date.
9. Distribution payments shall be received by Cede & Co. as nominee of
DEPOSITORY TRUST COMPANY, or its registered assigns, in same-day funds or the
equivalent no later than 2:30 p.m. (Eastern Time) on each payment date. Absent
any other arrangements between the Issuer and DEPOSITORY TRUST COMPANY, such
funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000128
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
The Issuer or the Transfer Agent and Registrar shall provide Distribution
payment information to a standard announcement service subscribed to by
DEPOSITORY TRUST COMPANY. In the unlikely event that no such service exists, the
Issuer agrees that it or the Transfer Agent and Registrar shall provide this
information directly to DEPOSITORY TRUST COMPANY in advance of the Distribution
payment date as soon as the information is available. This information should be
conveyed directly to DEPOSITORY TRUST COMPANY electronically. If electronic
transmission is not available, such information should be sent by telecopy to
DEPOSITORY TRUST COMPANY's Dividend Department at (212) 709-1723 or (212)
709-1686, and receipt of such notices shall be confirmed by telephoning (212)
709-1270. Notices to DEPOSITORY TRUST COMPANY pursuant to the above by mail or
by any other means shall be sent to:
Manager: Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
10. DEPOSITORY TRUST COMPANY shall receive maturity and redemption payments
and CUSIP-level detail on the payable date in same day funds by 2:30 p.m.
(Eastern Time). Absent any other arrangements between the Transfer Agent and
Registrar and DEPOSITORY TRUST COMPANY, such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000128
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DEPOSITORY TRUST COMPANY's SDFS Paying Agent Operating Procedures, a copy of
which has previously been furnished to the Transfer Agent and Registrar.
11. DEPOSITORY TRUST COMPANY shall receive all reorganization payments and
CUSIP-level detail resulting from corporation actions (such as tender offers or
mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between the Transfer Agent and Registrar
and DEPOSITORY TRUST COMPANY, such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000128
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DEPOSITORY TRUST COMPANY may by prior written notice direct the Issuer
and the Transfer Agent and Registrar to use any other telecopy number or address
of DEPOSITORY TRUST COMPANY as the number or address to which notices or
payments may be sent.
13. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by the Global
Certificate, DEPOSITORY TRUST COMPANY, in its discretion: (a) may request the
Issuer or the Transfer Agent and Registrar to issue and countersign a new Global
Certificate; or (b) may make an appropriate notation on the Global Certificate
indicating the date and amount of such reduction.
14. DEPOSITORY TRUST COMPANY may discontinue its services as a securities
depositary with respect to the Preferred Securities at any time by giving at
least 90 days' prior written notice to the Issuer and the Transfer Agent and
Registrar (at which time DEPOSITORY TRUST COMPANY will confirm with the Issuer
or the Transfer Agent and Registrar the aggregate number of Preferred Securities
deposited with it) and discharging its responsibilities with respect thereto
under applicable law. Under such circumstances, the Issuer may determine to make
alternative arrangements for book-entry settlement for the Preferred Securities,
make available one or more separate global certificates evidencing Preferred
Securities to any Participant having Preferred Securities credited to its
DEPOSITORY TRUST COMPANY account, or issue definitive Preferred Securities to
the beneficial holders thereof, and in any such case, DEPOSITORY TRUST COMPANY
agrees to cooperate fully with the Issuer and the Transfer Agent and Registrar
and to return the Global Certificate, duly endorsed for transfer as directed by
the Issuer or the Transfer Agent and Registrar, together with any other
documents of transfer reasonably requested by the Issuer or the Transfer Agent
and Registrar.
15. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DEPOSITORY TRUST
COMPANY of the availability of certificates. In such event, the Issuer or the
Transfer Agent and Registrar shall issue, transfer and exchange certificates in
appropriate amounts, as required by DEPOSITORY TRUST COMPANY and others, and
DEPOSITORY TRUST COMPANY agrees to cooperate fully with the Issuer and the
Transfer Agent and Registrar and to return the Global Certificate, duly endorsed
for transfer as directed by the Issuer or the Transfer Agent and Registrar,
together with any other documents of transfer reasonably requested by the Issuer
or the Transfer Agent and Registrar.
16. The Issuer: (a) understands that DEPOSITORY TRUST COMPANY has no
obligation to, and will not, communicate to its Participants or to any person
having an interest in the Preferred Securities any information contained in the
Preferred Security certificate(s); and (b) acknowledges that neither DEPOSITORY
TRUST COMPANY's Participants nor any person having an interest in the Preferred
Securities shall be deemed to have notice of the provisions of the Preferred
Security certificate(s) by virtue of submission of such certificate(s) to
DEPOSITORY TRUST COMPANY.
17. This letter may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of CPL Capital I.
Very truly yours,
CPL CAPITAL I
(As Issuer)
By
Name: [ ]
Title: Administrative Trustee
THE BANK OF NEW YORK,
AS PROPERTY TRUSTEE
(As Transfer Agent and Registrar)
By:
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By
Authorized Officer
Exhibit C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-1
Certificate Evidencing Common Securities
of
CPL Capital I
[ ]% Common Securities
(liquidation amount $25 per Common Security)
CPL Capital I, a statutory business trust created under the laws of the
State of Delaware (the "Trust") hereby certifies that Central Power and Light
Company (the "Holder") is the registered owner of
______________________________________ (_______________) common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
and designated the [ ]% Common Securities (liquidation amount $25 per Common
Security) (the "Common Securities"). In accordance with Section 510 of the Trust
Agreement (as defined below) the Common Securities are not transferable and any
attempted transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of [ ], 1997, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of the Common Securities as
set forth therein. The Trust will furnish a copy of the Trust Agreement to the
Holder without charge upon written request to the Trust at its principal place
of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ________ day of ______, _____.
CPL CAPITAL I
By:
Name:
Administrative Trustee
Exhibit D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of [ ], 1997, between Central Power and Light Company, a
Texas corporation ("CPL"), and CPL Capital I, a Delaware business trust (the
"Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to, and receive Debentures (as defined in the Trust Agreement)
from, CPL and to issue and sell [ ]% Cumulative Quarterly Income Preferred
Securities, Series A (the "Preferred Securities") with such powers, preferences
and special rights and restrictions as are set forth in the Amended and Restated
Trust Agreement of the Trust dated as of [ ], 1997 as the same may be amended
from time to time (the "Trust Agreement");
WHEREAS, CPL will directly or indirectly own all of the Common Securities
of Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase CPL hereby agrees shall benefit CPL and
which purchase CPL acknowledges will be made in reliance upon the execution and
delivery of this Agreement, CPL, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.1. Guarantee by CPL.
Subject to the terms and conditions hereof, CPL, including in its capacity
as holder of the Common Securities, hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as
due, of any and all Obligations (as hereinafter defined) to such Beneficiaries.
As used herein, "Obligations" means any costs, expenses or liabilities of the
Trust, other than obligations of the Trust to pay to holders of any Preferred
Securities or other similar interests in the Trust the amounts due such holders
pursuant to the terms of the Preferred Securities or such other similar
interests, as the case may be. This Agreement is intended to be for the benefit
of, and to be enforceable by, all such Beneficiaries, whether or not such
Beneficiaries have received notice hereof.
Section 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force and effect upon
the later of (a) the date on which full payment has been made of all amounts
payable to all holders of all the Preferred Securities (whether upon redemption,
liquidation, exchange or otherwise) and (b) the date on which there are no
Beneficiaries remaining; provided, however, that this Agreement shall continue
to be effective or shall be reinstated, as the case may be, if at any time any
holder of Preferred Securities or any Beneficiary must restore payment of any
sums paid under the Preferred Securities, under any Obligation, under the
Guarantee Agreement dated the date hereof by CPL and The Bank of New York as
guarantee trustee or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.3. Waiver of Notice.
CPL hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and CPL hereby waives presentment,
demand for payment, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 1.4. No Impairment.
The obligations, covenants, agreements and duties of CPL under this
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of the
Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, CPL with respect to the happening of any of the foregoing.
Section 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against CPL and CPL
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against CPL.
ARTICLE II
Section 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of CPL and shall
inure to the benefit of the Beneficiaries.
Section 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities of any
series are outstanding, this Agreement shall not be modified or amended in any
manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
Section 2.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or by registered
or certified mail, addressed as follows (and if so given, shall be deemed given
when mailed or upon receipt of an answer-back, if sent by telex):
CPL Capital I
c/o The Bank of New York
101 Barclay Street
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Central Power and Light Company
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
Section 2.4 This agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of New York (without
regard to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above
written.
CENTRAL POWER AND LIGHT COMPANY
By:
Name: [ ]
Title: Treasurer
CPL CAPITAL I
By:
Name: [ ]
Title: Administrative Trustee
Exhibit E
IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository. This
Preferred Security is exchangeable for Preferred Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Trust Agreement (as defined below) and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York) to CPL Capital I or
its agent for registration of transfer, exchange or payment, and any Preferred
Security issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
P-
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
CPL Capital I
[ ]% Cumulative Quarterly Income Preferred Securities,
Series A
(liquidation preference $25 per Preferred Security)
CPL Capital I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that _____________ (the
"Holder") is the registered owner of ________ (______) preferred securities of
the Trust representing an undivided beneficial interest in the assets of the
Trust and designated CPL Capital I [ ]% Cumulative Quarterly Income Preferred
Securities, Series A (liquidation preference $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 504 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of [ ], 1997, as the same may be amended
from time to time (the "Trust Agreement"), including the designation of the
terms of Preferred Securities as set forth therein. The Holder is entitled to
the benefits of the Guarantee Agreement entered into by Central Power and Light
Company, a Texas corporation, and The Bank of New York, as guarantee trustee,
dated as of [ ], 1997 (the "Guarantee"), to the extent provided therein. The
Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this__________ day of ___________, _____.
CPL CAPITAL I
By:
Name:
Title: Administrative Trustee
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
agent to transfer this Preferred Securities Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)
Signature(s) Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCK BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
SEC RULE 17Ad-15.
Exhibit 4(i)
GUARANTEE AGREEMENT
Between
Central Power and Light Company
(as Guarantor)
and
The Bank of New York
(as Guarantee Trustee)
dated as of
, 1997
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 101. Definitions................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. Trust Indenture Act; Application...........................5
SECTION 202. List of Holders............................................5
SECTION 203. Reports by the Guarantee Trustee...........................5
SECTION 204. Periodic Reports to Guarantee Trustee......................5
SECTION 205. Evidence of Compliance with Conditions Precedent...........6
SECTION 206. Events of Default; Waiver..................................6
SECTION 207. Event of Default; Notice...................................6
SECTION 208. Conflicting Interests......................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. Powers and Duties of the Guarantee Trustee.................7
SECTION 302. Certain Rights of Guarantee Trustee........................8
SECTION 303. Indemnity.................................................10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. Guarantee Trustee; Eligibility............................10
SECTION 402. Appointment, Removal and Resignation of the
Guarantee Trustee.........................................11
ARTICLE V
GUARANTEE
SECTION 501. Guarantee................................................11
SECTION 502. Waiver of Notice and Demand..............................12
SECTION 503. Obligations Not Affected.................................12
SECTION 504. Rights of Holders........................................13
SECTION 505. Guarantee of Payment.....................................13
SECTION 506. Subrogation..............................................13
SECTION 507. Independent Obligations..................................13
Page
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. Subordination...............................................14
SECTION 602. Pari Passu Guarantees.......................................14
ARTICLE VII
TERMINATION
SECTION 701. Termination.................................................14
ARTICLE VIII
MISCELLANEOUS
SECTION 801. Successors and Assigns......................................14
SECTION 802. Amendments..................................................15
SECTION 803. Notices.....................................................15
SECTION 804. Benefit.....................................................16
SECTION 805. Interpretation..............................................16
SECTION 806. Governing Law...............................................17
ii
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
310(a).......................................................... 401(a)
310(b).......................................................... 401(c), 208
310(c).......................................................... Inapplicable
311(a).......................................................... 202(b)
311(b).......................................................... 202(b)
311(c).......................................................... Inapplicable
312(a).......................................................... 202(a)
312(b).......................................................... 202(b)
313............................................................. 203
314(a).......................................................... 204
314(b).......................................................... Inapplicable
314(c).......................................................... 205
314(d).......................................................... Inapplicable
314(e).......................................................... 101, 205, 302
314(f).......................................................... 201, 302
315(a).......................................................... 301(d)
315(b).......................................................... 207
315(c).......................................................... 301
315(d).......................................................... 301(d)
316(a).......................................................... 101, 206, 504
316(b).......................................................... 503
316(c).......................................................... 802
317(a).......................................................... Inapplicable
317(b).......................................................... Inapplicable
318(a).......................................................... 201(b)
318(b).......................................................... 201
318(c).......................................................... 201(b)
- --------
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
iii
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of , 1997, is executed and delivered by
Central Power and Light Company, a Texas corporation (the "Guarantor"), and The
Bank of New York, a New York banking corporation organized under the laws of the
State of New York, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of CPL Capital [ ], a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of , 1997 among the Issuer Trustees named therein, the
Guarantor, as Depositor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing
__________ of its ___% Cumulative Quarterly Income Preferred Securities, Series
A (liquidation preference $25 per preferred security) (the "Preferred
Securities") representing preferred undivided beneficial interests in the assets
of the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with The Bank of New York, as Property Trustee under the Trust Agreement, as
trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
ARTICLE I
DEFINITIONS
SECTION 101. Definitions.
As used in this Guarantee Agreement, the terms set forth below
shall, unless the context otherwise requires, have the following meanings.
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
<PAGE>
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person, provided, however, that an Affiliate
of the Guarantor shall not be deemed to include the Issuer. For the purposes of
this definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Debt" means, with respect to any Person, whether recourse is
to all or a portion of the assets of such Person and whether or not contingent,
(i) every obligation of such Person for money borrowed; (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement; provided,
however, that, except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received notice of default and shall not have
cured such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Issuer: (i) any accumulated
and unpaid Distributions (as defined in the Trust Agreement) required to be paid
on the Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor at
the date of redemption, and (iii) upon a voluntary or involuntary termination,
winding-up or liquidation of the Issuer, unless Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the liquidation preference of
$25 per Preferred Security plus accumulated and unpaid Distributions on the
Preferred Securities to the date of payment to the extent the Issuer shall have
funds on hand available to make
2
<PAGE>
such payment at such time and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor, the Guarantee Trustee or any Affiliate of the
Guarantor or the Guarantee Trustee.
"Indenture" means the Indenture dated as of , 1997 relating to
Junior Subordinated Debentures of the Guarantor, as supplemented and amended
between the Guarantor and The Bank of New York, as trustee.
"List of Holders" has the meaning specified in Section 202(a).
"Majority in liquidation preference of the Preferred
Securities" means, except as provided by the Trust Indenture Act, a vote by the
Holder(s), voting separately as a class, of more than 50% of the liquidation
preference of all then outstanding Preferred Securities issued by the Issuer.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chairman, President, General Manager, the Treasurer,
an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary
of such Person, and delivered to the Guarantee Trustee. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by the officer in rendering the
Officer's Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer,
such condition or covenant has been complied with.
3
<PAGE>
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any Senior Vice President, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant
Treasurer, any Trust Officer or Assistant Trust Officer or any other officer of
the Corporate Trust Department of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Senior Indebtedness" means the principal of, and premium, if
any, and interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of this Guarantee or thereafter
incurred, created or assumed: (a) all indebtedness of the Guarantor evidenced by
notes, debentures, bonds or other securities sold by the Guarantor for money,
(b) all indebtedness of others of the kinds described in the preceding clause
(a) assumed by or guaranteed in any manner by the Guarantor or in effect
guaranteed by the Guarantor through an agreement to purchase, contingent or
otherwise, (c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) and (b) and (d) any
payment of money relating to any lease which is capitalized on the balance sheet
or consolidated balance sheet, as the case may be, of the Guarantor, in
accordance with generally accepted accounting principles as in effect from time
to time, unless, in the case of any particular indebtedness, renewal, extension,
refunding or lease payment, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension, refunding or lease payment is not superior in
right of payment to or is pari passu with this Guarantee. Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions set forth in Article VI of this
Guarantee irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
401.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
4
<PAGE>
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this
Guarantee Agreement and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
SECTION 202. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before January 15
and July 15 of each year, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (b) at
such other times as the Guarantee Trustee may request in
writing, within 30 days after the receipt by the Guarantor of
any such request, a List of Holders as of a date not more than
15 days prior to the time such list is furnished, in each
case to the extent such information is in the possession or
control of the Guarantor and is not identical to a previously
supplied list of Holders or has not otherwise been received
by the Guarantee Trustee in its capacity as such. The
Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 203. Reports by the Guarantee Trustee.
Not later than __________ of each year, commencing __________,
1998, the Guarantee Trustee shall provide to the Holders such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 204. Periodic Reports to Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the
Securities and Exchange Commission and the Holders such documents, reports and
information, if any, as
5
<PAGE>
required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 205. Evidence of Compliance with Conditions
Precedent.
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with such conditions precedent, if any, provided for in
this Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officer's Certificate.
SECTION 206. Events of Default: Waiver.
The Holders of a Majority in liquidation preference of the
Preferred Securities may, by vote, on behalf of the Holders, waive any past
Event of Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Guarantee Agreement, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 207. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders, notices of all Events
of Default known to the Guarantee Trustee, unless such
defaults have been cured before the giving of such notice,
provided, that, except in the case of a default in the
payment of a Guarantee Payment, the Guarantee Trustee shall
be protected in withholding such notice if and so long as the
Board of Directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the
Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have
received written notice, or a Responsible Officer charged with
the administration of the Trust Agreement shall have obtained
written notice, of such Event of Default.
SECTION 208. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
6
<PAGE>
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee
Trustee shall not transfer this Guarantee Agreement to any
Person except a Holder exercising his or her rights pursuant
to Section 504(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its
appointment to act as Successor Guarantee Trustee. The right,
title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of
such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for
the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that
may have occurred, shall undertake to perform only such duties
as are specifically set forth in this Guarantee Agreement, and
no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived
pursuant to Section 206), the Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for failure to
act or willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
7
<PAGE>
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee Agreement;
but in the case of any such certificates or opinions that by any
provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in liquidation
preference of the Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not reasonably assured to
it.
SECTION 302. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 301:
(i) The Guarantee Trustee may rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document reasonably believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be sufficiently evidenced by an
Officer's Certificate unless otherwise prescribed herein.
8
<PAGE>
(iii) Whenever, in the administration of this
Guarantee Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely upon
an Officer's Certificate which, upon receipt of such request from the Guarantee
Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal
counsel of its choice, and the written advice or opinion of such legal counsel
with respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion. Such
legal counsel may be legal counsel to the Guarantor or any of its Affiliates and
may be one of its employees. The Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in the position of the Guarantee
Trustee, against the costs, expenses (including attorneys' fees and expenses)
and liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee; provided that nothing contained in this Section 302(a)(v)
shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in it by
this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this
Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking
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such other action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 303. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for,
and to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Guarantee Trustee, arising out of or
in connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000, and shall be a corporation meeting the requirements of
Section 310 (a) of the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority, then, for the purposes of this
Section and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 401(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 402(c).
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(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 402. Appointment, Removal and Resignation of the
Guarantee Trustee.
(a) Subject to Section 402(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 402 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 501. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer), as and when due, regardless of
any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
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SECTION 502. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 503. Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment period
on the Debentures as so provided in the Indenture), Redemption Price,
Liquidation Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in,
the Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 503 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
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There shall be no obligation of the Holders to give notice to,
or obtain the consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 504. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation preference of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other Person.
SECTION 505. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and
not of collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer) or upon distribution of Debentures to Holders as
provided in the Trust Agreement.
SECTION 506. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Issuer in respect of any amounts paid to the Holders by
the Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 501; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 507. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 503 hereof.
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ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. Subordination.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Indebtedness of the Guarantor.
SECTION 602. Pari Passu Guarantees.
This Guarantee Agreement shall rank pari passu with any
similar Guarantee Agreements issued by the Guarantor on behalf of the holders of
Preferred Securities issued by CPL Capital [ ].
ARTICLE VII
TERMINATION
SECTION 701. Termination.
This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debentures to the Holders in exchange for
all of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 801. Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Ten of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.
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SECTION 802. Amendments.
Except with respect to any changes which do not adversely
affect the rights of the Holders in any material respect (in which case no
consent of the Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Holders of not less than a Majority in
liquidation preference of the Preferred Securities. The provisions of Article VI
of the Trust Agreement concerning meetings of the Holders shall apply to the
giving of such approval.
SECTION 803. Notices.
Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set
forth below or such other address as the Guarantor may give notice of to the
Holders:
Central Power and Light Company
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
(b) if given to the Issuer, in care of the Guarante
Trustee, at the Issuer's (and the Guarantee Trustee's) address set forth below
or such other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:
CPL Capital [ ]
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
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with a copy to:
The Bank of New York
101 Barclay Street
21 West
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(c) if given to any Holder, at the address set forth
on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 804. Benefit.
This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Preferred Securities.
SECTION 805. Interpretation.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 101;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
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(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 806. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
CENTRAL POWER AND LIGHT COMPANY
By:
Name:
Title: Treasurer
THE BANK OF NEW YORK, as Guarantee Trustee
By:
Name:
Title:
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Exhibit 5(a)
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
February 5, 1997
Central Power and Light Company
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
CPL Capital I
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
CPL Capital II
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Re: Registration Statement on Form S-3 of Central
Power and Light Company
Ladies and Gentlemen:
We are acting as special counsel to Central Power and Light
Company, a Texas corporation (the "Company"), in connection with
the proposed issuance and sale by the Company from time to time
of up to $150 million aggregate principal amount of the Company's
Junior Subordinated Debentures (the "Debentures"), to be issued in
one or more series pursuant to an indenture between the Company
and The Bank of New York, as Trustee (the "Indenture"), and the
proposed public offering by CPL Capital I and CPL Capital II,
each a business trust created under the laws of the State of
Delaware (collectively, the "Issuer Trusts"), from time to time
in one or more series, of an amount not to exceed $150 million of
preferred securities, representing preferred undivided beneficial
interests in the assets of such Issuer Trusts (the "Preferred
Securities"), all as contemplated by the Registration Statement
on Form S-3 (the "Registration Statement") to be filed by the
Company and the Issuer Trusts with the Securities and Exchange
Commission (the "Commission") for the registration of the
Debentures and Preferred Securities under the Securities Act of
1933, as amended (the "Act") and their sale pursuant to one or
- 2 -
more underwriting agreements filed as an exhibit to the Registration
Statement (each, an "Underwriting Agreement"). Capitalized terms used herein and
not otherwise defined have the meanings ascribed to them in the Registration
Statement.
As described in the Registration Statement, the Company may issue the
Debentures to (a) the public or institutional investors or (b) the Issuer Trusts
in connection with the issuance of Preferred Securities. If Preferred Securities
are issued by the Issuer Trusts, the proceeds therefrom, together with the
capital contribution of the Company, as owner of the common securities of each
Issuer Trust, will be used to purchase Debentures. The Company will guarantee
pursuant to a Guarantee Agreement between the Company and the Bank of New York
as trustee, the payment by each Issuer Trust of distributions that are required
to be made from time to time with respect to the Preferred Securities and of
amounts due upon liquidation of each Issuer Trust or the redemption of the
Preferred Securities (the "Guarantee," or when referred to collectively, the
"Guarantees"), all to the extent such Issuer Trust has funds available therefor
as set forth in the Guarantees. The Preferred Securities are to be issued by
each Issuer Trust pursuant to a Trust Agreement, each as amended and restated.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of the Company and the
Issuer Trusts, certificates of public officials, certificates of
officers and representatives of the Company and the Issuer Trusts
and other documents, as we have deemed it necessary to require as
a basis for the opinions hereinafter expressed. In our
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 certifications by officers of the
Company and other appropriate persons and statements contained in
the Registration Statement.
Based on the foregoing, and having regard to legal
considerations we deem relevant, we are of the opinion that when
the Indenture has been duly authorized, executed and delivered by
the Company and duly executed and delivered by The Bank of New
York, as Trustee, when the supplemental indenture with respect to
a series of Debentures has been duly authorized, executed and
delivered, when the Guarantee Agreement relating to the Guarantee
with respect to a series of Preferred Securities has been duly
authorized, executed and delivered, when the Amended and Restated
Trust Agreement of the Issuer Trust issuing the Preferred
Securities has been duly authorized, executed and delivered, and
when the Debentures and Preferred Securities of such series have
been duly authorized, executed, and, in the case of the
Debentures, authenticated, and issued in accordance with the
terms of the Indenture and the applicable supplemental indenture
- 3 -
and delivered against payment therefor in accordance with the
terms of the applicable Underwriting Agreement, the Debentures of
such series and the Guarantee relating to such series of Preferred
Securities of such Issuer Trust, will constitute legal, valid and
binding obligations of the Company, entitled to the benefits of,
and subject to the provisions of, the Indenture and the
applicable supplemental indenture, and the Guarantee Agreement,
except (i) as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws of general
applicability affecting the enforcement of creditors' rights and
(ii) that such enforceability may be limited by the application
of general principals of equity (regardless of whether considered
in a proceeding in equity or at law), including without
limitation (x) the possible unavailability of specific
performance, injunctive relief or any other equitable remedies
and (y) concepts of materiality, reasonableness, good faith and
fair dealing.
We do not express any opinion as to matters governed by
any laws other than the Federal laws of the United States and the
laws of the State of New York, and we are expressing no opinion
as to the effects of the laws of any other jurisdiction.
We hereby consent to the use of this opinion as
Exhibit 5(a) to the Registration Statement and further consent to
the use of our name in the Registration Statement, and any
amendment thereto, and in the preliminary Prospectus and the
preliminary Prospectus Supplement constituting a part thereof.
Very truly yours,
/s/ MILBANK, TWEED, HADLEY & McCLOY
RBW/DBB/JMH
Exhibit 5(b)
RICHARDS, LAYTON & FINGER
February 5, 1997
CPL Capital I
c/o Central Power and Light Company
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Re: CPL Capital I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Central Power
and Light Company, a Texas corporation (the "Company"), and CPL Capital I, a
Delaware business trust (the "Trust" ), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth,
our examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated January 24,
1997 as filed with the office of the Secretary of State of the State of Delaware
(the "Secretary of State") on January 24, 1997;
(b) The Trust Agreement of the Trust, dated as of January 23,
1997 between the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a prospectus and prospectus supplement with respect to
the Trust (collectively, the "Prospectus"), relating to the Preferred Securities
of the Trust representing preferred undivided beneficial interests in the assets
of the Trust (each, a "Security" and collectively, the "Securities"), filed by
the Company and the Trust with the Securities and Exchange Commission on or
about February 5, 1997;
(d) A form of Amended and Restated Trust Agreement for the
Trust, to be entered into between the Company, the trustees of the Trust named
therein, and the holders, from time to time, of the undivided beneficial
interests in the assets of the Trust (including Exhibits C and E thereto) (the
"Trust Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated
February 4, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate of Trust are in full force and effect and have not
been amended, (ii) except to the extent provided in paragraph 1 below, the due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Security is to be issued by the Trust (collectively, the "Security Holders")
of a certificate for such Security in the form prescribed by the Trust Agreement
and the payment for such Security, in accordance with the Trust Agreement and
the Registration Statement, and (vii) that the Securities are issued and sold to
the Security Holders in accordance with the Trust Agreement and the Registration
Statement. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act.
2. The Securities of the Trust will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Security Holders, as beneficial owners of the Trust,
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. We note that the Security Holders may
be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus and "Legal Opinions" in the Prospectus. In giving the foregoing
consents, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
for any purpose.
Very truly yours,
/s/ RICHARDS, LAYTON & FINGER
CDK/JLJ
Exhibit 5(c)
RICHARDS, LAYTON & FINGER
February 5, 1997
CPL Capital II
c/o Central Power and Light Company
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Re: CPL Capital II
Ladies and Gentlemen:
We have acted as special Delaware counsel for Central Power
and Light Company, a Texas corporation (the "Company"), and CPL Capital II, a
Delaware business trust (the "Trust" ), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth,
our examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated January 24,
1997 as filed with the office of the Secretary of State of the State of Delaware
(the "Secretary of State") on January 24, 1997;
(b) The Trust Agreement of the Trust, dated as of January 23,
1997 between the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a prospectus and prospectus supplement with respect to
the Trust (collectively, the "Prospectus"), relating to the Preferred Securities
of the Trust representing preferred undivided beneficial interests in the assets
of the Trust (each, a "Security" and collectively, the "Securities"), filed by
the Company and the Trust with the Securities and Exchange Commission on or
about February 5, 1997;
(d) A form of Amended and Restated Trust Agreement for the
Trust, to be entered into between the Company, the trustees of the Trust named
therein, and the holders, from time to time, of the undivided beneficial
interests in the assets of the Trust (including Exhibits C and E thereto) (the
"Trust Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated
February 4, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate of Trust are in full force and effect and have not
been amended, (ii) except to the extent provided in paragraph 1 below, the due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Security is to be issued by the Trust (collectively, the "Security Holders")
of a certificate for such Security in the form prescribed by the Trust Agreement
and the payment for such Security, in accordance with the Trust Agreement and
the Registration Statement, and (vii) that the Securities are issued and sold to
the Security Holders in accordance with the Trust Agreement and the Registration
Statement. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act.
2. The Securities of the Trust will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Security Holders, as beneficial owners of the Trust,
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. We note that the Security Holders may
be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus and "Legal Opinions" in the Prospectus. In giving the foregoing
consents, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
CDK/JLJ
Exhibit 5(d)
(214) 220-7700
(214) 220-7716
February 5, 1997
Central Power and Light Company
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
CPL Capital I
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas Texas 75202
CPL Capital II
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas Texas 75202
Re: Registration Statement on Form S-3 of
Central Power and Light Company
Ladies and Gentlemen:
We are acting as special Texas counsel to Central Power and Light
Company, a Texas corporation (the "Company"), in connection with the proposed
issuance and sale by the Company from time to time of up to $150 million
aggregate principal amount of the Company's Junior Subordinated Debentures (the
"Debentures") to be issued in one or more series pursuant to an indenture
between the Company and The Bank of New York, as Trustee (the "Indenture"), and
the proposed public offering by CPL Capital-I and CPL Capital-II, each a
business trust created under the laws of the State of Delaware (collectively,
the "Issuer Trusts"), from time to time in one or more series, not to exceed
$150 million of their preferred securities, representing preferred undivided
beneficial interests in the assets of such Issuer Trusts (the "Preferred
Securities"), all as contemplated by the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by the Company and the Issuer Trusts with
the Securities and Exchange Commission (the "Commission") for the registration
of the Debentures and Preferred Securities under the Securities Act of 1933, as
amended (the "Act"), and their sale pursuant to one or more underwriting
agreements filed as an exhibit to the Registration Statement (each, an
"Underwriting Agreement").
As described in the Registration Statement, the Company may issue the
Debentures to (a) the public or institutional investors or (b) the Issuer Trusts
in connection with the issuance of Preferred Securities. If Preferred Securities
are issued by the Issuer Trusts, the proceeds therefrom, together with the
capital contribution of the Company, as owner of the common securities of each
Issuer Trust, will be used to purchase Debentures. The Company will guarantee
pursuant to a Guarantee Agreement the payment by each Issuer Trust of
distributions with respect to the Preferred Securities and of amounts due upon
liquidation of each Issuer Trust or redemption of the Preferred Securities
(collectively, the "Guarantees"), all to the extent such Issuer Trust has funds
available therefor as set forth in the Guarantees. The Preferred Securities are
to be issued by each Issuer Trust pursuant to a Trust Agreement, each as amended
and restated. We have examined originals, or copies certified to our
satisfaction, or such corporate records of the Company and the Issuer Trusts,
certificates of public officials, certificates of officers and representatives
of the Company and the Issuer Trusts and other documents as we have deemed
necessary as a basis for the opinions hereinafter expressed. In our 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 certifications by officers of the Company and other
appropriate persons and statements contained in the Registration Statement.
Based on the foregoing, and having regard to legal considerations we deem
relevant, we are of the opinion that:
1. All requisite action necessary for the due execution and delivery
of the Guarantees will have been taken when the Board of Directors of the
Company, the Pricing Committee thereof or an officer duly authorized thereby,
shall have taken such action as may be necessary to fix and determine the terms
of the Guarantees and the Guarantees shall have been duly executed and
delivered.
2. All requisite action necessary for the due execution and delivery
of the Debentures will have been taken when the Board of Directors of the
Company, the Pricing Committee thereof or an officer duly authorized thereby,
shall have taken such action as may be necessary to fix and determine the terms
of the Debentures, the Indenture shall have been executed and delivered, and the
Debentures shall have been issued and delivered in exchange for the proceeds
from the Preferred Securities and the capital contribution of the company.
The opinions expressed above are limited to the laws of the State of
Texas.
We hereby consent to the use of this opinion as Exhibit 5(b) to the
Registration Statement. In giving such consent, we do not thereby admit that we
are within the category of persons whose consent is required pursuant to
Section 7 of the Act or the rules and regulations of the Securities and Exchange
Commission.
Very truly yours,
/s/ Vinson & Elkins L.L.P.
Exhibit 8
Christy & Viener
Rockefeller Center
620 Fifth Avenue
New York, New York 10020
February 5, 1997
Central Power and Light Company
CPL Capital I
539 North Carancahua Street
Corpus Christi, Texas 78401-2802
Ladies and Gentlemen:
We have acted as special tax counsel to you in connection with the
proposed offering by CPL Capital I, a Delaware statutory business trust (the
"Trust"), of its Cumulative Quarterly Income Preferred Securities, Series A (the
"Series A Preferred Securities"), as described in the Registration Statement on
Form S-3 (the "Registration Statement"), which is being filed by Central Power
and Light Company, a Texas corporation (the "Company"), the Trust, and CPL
Capital II, a Delaware statutory business trust, with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended. The
Registration Statement includes the Prospectus and the Prospectus Supplement
(collectively, the "Prospectuses") relating to such offering.
In rendering the opinion expressed below, we have examined the
Prospectuses and such other documents as we have deemed relevant and necessary,
including, without limitation, the Trust Agreement dated as of January 23, 1997,
the Form of the Amended and Restated Trust Agreement, the Form of the Indenture,
the Form of the First Supplemental Indenture, and the Form of the Guarantee
Agreement attached as Exhibits to the Registration Statement. Such opinion is
conditioned, among other things, upon the accuracy and completeness of the
facts, information, and representations contained in the Prospectuses as of the
date hereof and the continuing accuracy and completeness thereof as of the date
of the issuance of the Series A Preferred Securities. We have not undertaken any
independent investigation of any factual matters set forth in the Prospectuses
or such other documents. We have assumed that the transactions contemplated by
the Prospectuses and such other documents will occur as provided therein and
that there will be no material change to the Prospectuses or any of such other
documents between the date hereof and the date of the issuance of the Series A
Preferred Securities.
Based upon and subject to the foregoing, we are of the opinion that
the discussion set forth in the Prospectus Supplement under the caption "CERTAIN
FEDERAL INCOME TAX CONSIDERATIONS" is a fair and accurate summary of the matters
addressed therein, based upon current law and the assumptions stated or referred
to therein.
We assume no obligation to update or supplement this letter to reflect
any facts or circumstances which may hereafter come to our attention with
respect to the opinion expressed above, including any changes in applicable law
which may hereafter occur.
We hereby consent to the filing of this letter as an Exhibit to the
Registration Statement and to the references to our firm under the captions
"CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" and "LEGAL OPINIONS" in the
Prospectus Supplement.
Very truly yours,
/s/ Christy & Viener
Exhibit 12(b)
Central Power and Light Company
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividend Requirements
(Unaudited)
<TABLE>
12 Months
Ended Year Ended December 31,
------------------------------------------------------------------
Sept. 30, 1996 1995 1994 1993 1992 1991
------------------------------------------------------------------------------------
(thousands, except for ratios)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Operating Income $291,977 $282,184 $256,251 $190,079 $266,665 $249,573
Adjustments:
Federal income taxes 68,612 51,755 51,329 (18,954) 34,726 42,869
Provision for deferred income taxes 27,182 (30,025) 26,659 90,520 48,610 36,821
Deferred investment tax credits (5,789) (5,789) (5,789) (5,806) (5,837) (5,831)
Other income and deductions (8,767) 14,880 1,272 1,663 890 2,522
Allowance for borrowed and equity
funds used during construction 1,943 4,514 3,689 2,618 1,171 2,124
Mirror CWIP amortization 10,250 41,000 68,000 75,702 82,527 96,671
------------------------------------------------------------------------------------
Earnings $385,408 $358,519 $401,411 $335,822 $428,752 $424,749
====================================================================================
Fixed Charges:
Interest on long-term debt $110,100 $116,205 $111,408 $112,939 $125,476 $124,987
Interest on short-term debt and other 19,071 19,926 12,365 11,993 7,266 8,697
Preferred stock dividend requirements 21,199 15,586 18,655 20,537 21,769 26,592
------------------------------------------------------------------------------------
$150,370 $151,717 $142,428 $145,469 $154,511 $160,276
====================================================================================
Ratio of earnings to combined fixed
charges and preferred stock dividend
requirements
2.56 2.36 2.82 2.31 2.77 2.65
</TABLE>
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of
Central Power and Light Company on Form S-3 of our report dated
February 28, 1996 incorporated by reference in the Annual Report
on Form 10-K of Central Power and Light Company for the year
ended December 31, 1995, and to the reference to us under the
headings "Selected Financial Information" and "Experts" in the
Prospectus, included in or made a part of this Registration
Statement.
/s/ Arthur Andersen LLP
February 4, 1997
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
Exhibit 25(a)
===========================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
CENTRAL POWER AND LIGHT COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0550600
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
539 North Carancahua Street
Corpus Christi, Texas 78401-2802
(Address of principal executive offices) (Zip code)
______________________
Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
========================================================================
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to com- mence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of
New York, and State of New York, on the 22nd day of January, 1997.
THE BANK OF NEW YORK
By:/s/WALTER N. GITLIN
Name: Walter N. Gitlin
Title: Vice President
Exhibit 25(b)
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
===========================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)|__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
CENTRAL POWER AND LIGHT COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0550600
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
539 North Carancahua Street
Corpus Christi, Texas 78401-2802
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Preferred Securities of
CPL Capital I
(Title of the indenture securities)
===========================================================
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of
New York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of
New York, and State of New York, on the 22nd day of January, 1997.
THE BANK OF NEW YORK
By: /s/Vivian Georges
Name: Vivian Georges
Title: Assistant Vice President
Exhibit 25(c)
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
===========================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
CPL CAPITAL I
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
539 North Carancahua Street
Corpus Christi, Texas 78401-2802
(Address of principal executive offices) (Zip code)
______________________
Preferred Securities
(Title of the indenture securities)
=============================================================
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24
of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to com- mence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 22nd day of January, 1997.
THE BANK OF NEW YORK
By: /s/Vivian Georges
Name: Vivian Georges
Title: Assistant Vice President
Exhibit 25(d)
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
===========================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
CENTRAL POWER AND LIGHT COMPANY
(Exact name of obligor as specified in its charter)
Texas 74-0550600
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
539 North Carancahua Street
Corpus Christi, Texas 78401-2802
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Preferred Securities of
CPL Capital II
(Title of the indenture securities)
=============================================================
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule
24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to com- mence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 22nd day of January, 1997.
THE BANK OF NEW YORK
By: /s/Vivian Georges
Name: Vivian Georges
Title: Assistant Vice President
Exhibit 25(e)
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
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FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
CPL CAPITAL II
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
539 North Carancahua Street
Corpus Christi, Texas 78401-2802
(Address of principal executive offices) (Zip code)
______________________
Preferred Securities
(Title of the indenture securities)
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1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
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Name Address
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Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor. If the obligor is an affiliate of the trustee,
describe each such affiliation.
None. (See Note on page 3.)
16. List of Exhibits. Exhibits identified in parentheses below, on file with
the Commission, are incorporated herein by reference as an exhibit hereto,
pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act")
and Rule 24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to com- mence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d)
OF REGULATION S-T
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 22nd day of January, 1997.
THE BANK OF NEW YORK
By: /s/Vivian Georges
Name: Vivian Georges
Title: Assistant Vice President
