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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: July 15, 1997
Commission file number 1-1097
OKLAHOMA GAS AND ELECTRIC COMPANY
(exact name of registrant as specified in its charter)
Oklahoma 73-0382390
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 North Robinson
P.O. Box 321
Oklahoma City, Oklahoma 73101-0321
(Address of principal executive offices)
(Zip Code)
(405) 553-3000
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On July 15, 1997, Oklahoma Gas and Electric Company, an Oklahoma corporation
(the "Company") entered into an Underwriting Agreement and filed on July 16,
1997, with the Securities and Exchange Commission a prospectus supplement
relating to $125,000,000 in aggregate principal amount of its 6.65% Senior
Notes, Series due July 15, 2027. On July 15, 1997, the Company also entered
into another Underwriting Agreement and filed with the Securities and Exchange
Commission a prospectus supplement relating to $125,000,000 in aggregate
principal amount of its 6.50% Senior Notes, Series due July 15, 2017.
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS
Exhibits
1.01 Underwriting Agreement, dated July 15, 1997, between Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc., Lehman
Brothers Inc. and Morgan Stanley & Co. Incorporated relating to
$125,000,000 of 6.65% Senior Notes, Series due July 15, 2027.
1.02 Underwriting Agreement, dated July 15, 1997, between the Company and
Lehman Brothers Inc., Bear, Stearns & Co. Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated
relating to $125,000,000 of 6.50% Senior Notes, Series due July 15,
2017.
4.01 Supplemental Indenture No. 2, dated as of July 1, 1997 , between the
Company and NationsBank, N.A., creating $125,000,000 principal amount
of 6.65% Senior Notes, Series due July 15, 2027 and $125,000,000
principal amount of 6.50% Senior Notes, Series due July 15, 2017
(collectively, the "Senior Notes").
4.02 Supplemental Trust Indenture dated as of July 1, 1997, between the
Company and NationsBank, N.A., creating $125,000,000 principal amount
of First Mortgage Bonds, Senior Note Series C and $125,000,000
principal amount of First Mortgage Bonds, Senior Note Series D
(collectively, the "Senior Note First Mortgage Bonds").
5.01 Opinion of counsel as to legality of the Senior Notes and the Senior
Note First Mortgage Bonds.
12.01 Calculation of ratio of earnings to fixed charges.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OKLAHOMA GAS AND ELECTRIC COMPANY
(Registrant)
By: /s/ James R. Hatfield
---------------------------------------
James R. Hatfield,
Vice President and Treasurer
(On behalf of the registrant and in his capacity
as Vice President and Treasurer)
July 15, 1997
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OKLAHOMA GAS AND ELECTRIC COMPANY
(an Oklahoma corporation)
$125,000,000 Senior Notes, Series due July 15, 2027
PURCHASE AGREEMENT
Dated: July 15, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. Representations and Warranties. . . . . . . . . . . . . . . . . 3
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY . . . . . . . . . 3
(i) Compliance with Registration Requirements . . . . . . . 3
(ii) Incorporated Documents. . . . . . . . . . . . . . . . . 4
(iii) Independent Accountants . . . . . . . . . . . . . . . . 4
(iv) Financial Statements. . . . . . . . . . . . . . . . . . 5
(v) No Material Adverse Change. . . . . . . . . . . . . . . 5
(vi) Good Standing of the Company. . . . . . . . . . . . . . 5
(vii) No Subsidiaries . . . . . . . . . . . . . . . . . . . . 5
(viii) Capitalization . . . . . . . . . . . . . . . . . . . . 5
(ix) Authorization of Agreement. . . . . . . . . . . . . . . 6
(x) Authorization of the Indenture and the First Mortgage
Indenture . . . . . . . . . . . . . . . . . . . . . . . 6
(xi) Authorization of the Senior Notes . . . . . . . . . . . 6
(xii) Authorization of the Bonds. . . . . . . . . . . . . . . 6
(xiii) Description of the Senior Notes, the Bonds, the
Indenture and the First Mortgage Indenture. . . . . . . 6
(xiv) Absence of Defaults and Conflicts . . . . . . . . . . . 6
(xv) Absence of Proceedings. . . . . . . . . . . . . . . . . 7
(xvi) Accuracy of Exhibits. . . . . . . . . . . . . . . . . . 7
(xvii) Regulatory Approvals; Absence of Further
Requirements. . . . . . . . . . . . . . . . . . . . . . 8
(xviii) Possession of Licenses and Permits. . . . . . . . . . . 8
(xix) Title to Property . . . . . . . . . . . . . . . . . . . 8
(b) OFFICER'S CERTIFICATES. . . . . . . . . . . . . . . . . . . . . 9
SECTION 2. Sale and Delivery to Underwriters; Closing. . . . . . . . . . . 9
(a) SENIOR NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) DENOMINATIONS; REGISTRATION . . . . . . . . . . . . . . . . . . 9
(d) PAYMENT OF OKLAHOMA REAL ESTATE MORTGAGE TAX. . . . . . . . . . 9
SECTION 3. Covenants of the Company. . . . . . . . . . . . . . . . . . . . 10
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. 10
(b) FILING OF AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . 10
(c) DELIVERY OF REGISTRATION STATEMENTS . . . . . . . . . . . . . . 10
(d) DELIVERY OF PROSPECTUSES. . . . . . . . . . . . . . . . . . . . 10
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS . . . . . . . . . . . 11
(f) RULE 158. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(g) USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . 11
(h) REAL ESTATE MORTGAGE TAX. . . . . . . . . . . . . . . . . . . . 11
(i) RESTRICTION ON SALE OF SECURITIES . . . . . . . . . . . . . . . 11
SECTION 4. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . 12
(a) EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) TERMINATION OF AGREEMENT. . . . . . . . . . . . . . . . . . . . 12
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TABLE OF CONTENTS
(Continued)
PAGE
SECTION 5. Conditions of Underwriters' Obligations . . . . . . . . . . . . 12
(a) EFFECTIVENESS OF REGISTRATION STATEMENT; FILING OF PROSPECTUS . 12
(b) SECURITY FOR SENIOR NOTES . . . . . . . . . . . . . . . . . . . 13
(c) OPINIONS OF COUNSEL FOR COMPANY . . . . . . . . . . . . . . . . 13
(i) Opinion of Oklahoma Counsel . . . . . . . . . . . . . . . 13
(ii) Opinion of Arkansas Counsel . . . . . . . . . . . . . . . 16
(iii) Opinion of Gardner, Carton & Douglas. . . . . . . . . . . 18
(d) OPINION OF COUNSEL FOR UNDERWRITERS . . . . . . . . . . . . . . 19
(e) OFFICERS' CERTIFICATE . . . . . . . . . . . . . . . . . . . . . 19
(f) ACCOUNTANT'S COMFORT LETTER . . . . . . . . . . . . . . . . . . 19
(g) BRING-DOWN COMFORT LETTER . . . . . . . . . . . . . . . . . . . 19
(h) MAINTENANCE OF RATING . . . . . . . . . . . . . . . . . . . . . 19
(i) ADDITIONAL DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . 20
(j) TERMINATION OF AGREEMENT. . . . . . . . . . . . . . . . . . . . 20
SECTION 6. Conditions of Company's Obligations . . . . . . . . . . . . . . 20
SECTION 7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) INDEMNIFICATION OF UNDERWRITERS . . . . . . . . . . . . . . . . 21
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. . . . . . . 21
(c) ACTIONS AGAINST PARTIES; NOTIFICATION . . . . . . . . . . . . . 22
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. . . . . . . 22
SECTION 8. Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 9. Representations, Warranties and Agreements to Survive Delivery. 24
SECTION 10.Termination of Agreement. . . . . . . . . . . . . . . . . . . . 24
(a) TERMINATION; GENERAL. . . . . . . . . . . . . . . . . . . . . . 24
(b) LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.Default by One or More of the Underwriters. . . . . . . . . . . 25
SECTION 12.Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 13.Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 14.Governing Law and Time. . . . . . . . . . . . . . . . . . . . . 26
SECTION 15.Effect of Headings. . . . . . . . . . . . . . . . . . . . . . . 26
SCHEDULES
Schedule A -- List of Underwriters . . . . . . . . . . . . . . . . . .Sch. A-1
Schedule B -- Pricing Information. . . . . . . . . . . . . . . . . . .Sch. B-1
Schedule C -- Information Provided by Underwriters . . . . . . . . . .Sch. C-1
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OKLAHOMA GAS AND ELECTRIC COMPANY
(AN OKLAHOMA CORPORATION)
$125,000,000
SENIOR NOTES, SERIES DUE JULY 15, 2027
PURCHASE AGREEMENT
July 15, 1997
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
as Representatives of the several Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center, 9th Floor
250 Vesey Street, North Tower
New York, New York 10281-1309
Ladies and Gentlemen:
Oklahoma Gas and Electric Company, an Oklahoma corporation (the "Company"),
confirms its agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term includes any underwriter
substituted as hereinafter provided in Section 11 hereof), for whom Merrill
Lynch, Bear, Stearns & Co. Inc., Lehman Brothers Inc. and Morgan Stanley & Co.
Incorporated are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective principal amounts set forth in said Schedule A of $125,000,000
aggregate principal amount of the Company's Senior Notes, Series due July 15,
2027 (the "Senior Notes"). The Senior Notes are to be issued pursuant to the
Indenture dated as of October 1, 1995 between the Company and NationsBank, N.A.,
as trustee (the "Trustee"), as heretofore amended and supplemented and as
amended and supplemented by Supplemental Indenture No. 2, dated as of July 1,
1997, creating the series in which the Senior Notes are to be issued. The term
"Indenture," as used herein, means such
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Indenture, dated as of October 1, 1995, as so amended and supplemented and
includes the Company Order (as defined in the Indenture), if any,
establishing the form and terms of the Senior Notes pursuant to the Indenture.
Until such time as all of the first mortgage bonds of the Company (the
"First Mortgage Bonds") issued prior to the date of the Indenture have been
retired through payment or redemption, the Senior Notes will be secured as to
payment of principal and interest by one or more series of First Mortgage Bonds
issued, pledged and delivered by the Company to the Trustee. Prior to the
issuance of the Senior Notes, the Company will deliver to the Trustee, as
security for the payment of principal and interest on the Senior Notes, a series
of First Mortgage Bonds (the "Bonds") in the same aggregate principal amount and
with the same stated rate or rates of interest (or interest calculated in the
same manner), payment dates, maturity dates, repayment provisions and redemption
provisions as the Senior Notes. The Bonds will be issued by the Company under
its Trust Indenture dated February 1, 1945, between the Company and NationsBank,
N.A., as successor trustee (the "First Mortgage Trustee"), as heretofore amended
and supplemented and as to be further amended and supplemented by the
Supplemental Trust Indenture dated July 1, 1997 creating the Bonds. The term
"First Mortgage Indenture," as used herein, means such Trust Indenture, dated
February 1, 1945, as so amended and supplemented.
Concurrently with the offering of the Senior Notes, the Company proposes to
issue and sell $125,000,000 of its 6.50% Senior Notes, Series due July 15, 2017
(the "Additional Senior Notes"). Prior to the issuance of the Additional Senior
Notes, the Company will deliver to the Trustee, as security for the payment of
principal and interest on the Senior Notes, a series of First Mortgage Bonds
(the "Additional Bonds") in the same aggregate principal amount and with the
same stated rate or rates of interest (or interest calculated in the same
manner), payment dates, maturity dates, repayment provisions and redemption
provisions as the Additional Senior Notes. The Additional Bonds will also be
issued by the Company under the First Mortgage Indenture. The sale of the
Senior Notes and the Additional Senior Notes are not contingent upon each other.
The Company understands that the Underwriters propose to make a public
offering of the Senior Notes as soon as the Representatives deem advisable after
this Agreement has been executed and delivered and the Indenture and the First
Mortgage Indenture have been qualified under the Trust Indenture Act of 1939, as
amended (the "1939 Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-02319) covering the
registration of the Senior Notes, the Bonds, the Additional Senior Notes and the
Additional Bonds under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus or prospectuses. Promptly after
execution and delivery of this Agreement, the Company will either (i) prepare
and file a prospectus in accordance with paragraph (b) of Rule 424
("Rule 424(b)") of the rules and regulations of the Commission under the 1933
Act (the "1933 Act Regulations") or (ii) if the Company has elected to rely upon
Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet
(a "Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
The information included in such prospectus or in such Term Sheet, as the case
may be, that was omitted from such registration statement at the time it became
effective is referred to as the "Offering Terms." Each
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prospectus used before such registration statement became effective, and any
prospectus that omitted the Offering Terms, that was used after such
effectiveness and prior to the execution and delivery of this Agreement, is
herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto, schedules thereto, if any, and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
1933 Act, at the time it became effective and including the Offering Terms,
is herein called the "Registration Statement." Any registration statement
filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred
to as the "Rule 462(b) Registration Statement," and after such filing the
term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the
form first furnished to the Underwriters for use in connection with the
offering of the Senior Notes and the Bonds is herein called the "Prospectus."
If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated July 15, 1997 together with the Term Sheet and
all references in this Agreement to the date of the Prospectus shall mean the
date of the Term Sheet. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act") which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each Underwriter as of the date hereof and as of the Closing
Time referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
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At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the
Rule 462(b) Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act
and the rules and regulations of the Commission under the 1939 Act (the
"1939 Act Regulations"), and did not and will not contain 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. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time, included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to (A)
that part of the Registration Statement which constitutes the Statements of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act (the
"Statements of Eligibility") of the Trustee and the trustee for the First
Mortgage Bonds, (B) information contained in the Registration Statement or
the Prospectus relating to The Depository Trust Company and its book-entry
system, or (C) statements in or omissions from the Registration Statement
or Prospectus made in reliance upon and in conformity with the information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or Prospectus that is
set forth on Schedule C hereto.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement and
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations or the 1934 Act
and the rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), as applicable, and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective, at the time the Prospectus was issued and at the Closing
Time, did not and will not contain 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.
(iii) INDEPENDENT ACCOUNTANTS. Arthur Andersen LLP, the
accountants who examined the financial statements and supporting schedules
included in the
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Registration Statement, are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements included in
the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved, except as otherwise stated in the notes thereto. The
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The selected financial information included in the
Prospectus presents fairly the information shown therein and has been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The Company has no
material contingent obligation which is not disclosed in the Prospectus.
(v) NO MATERIAL ADVERSE CHANGE. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, results of operations, properties, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company, other than those in the ordinary course of
business, which are material with respect to the Company, and (C) except
for regular quarterly dividends on the Common Stock, par value $2.50 per
share, of the Company in amounts consistent with past practice, and regular
quarterly dividends on the Company's Preferred Stock, there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Oklahoma and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vii) NO SUBSIDIARIES. The Company has no subsidiaries.
(viii) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as stated in the Prospectus.
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(ix) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) AUTHORIZATION OF THE INDENTURE AND THE FIRST MORTGAGE
INDENTURE. Each of the Indenture and the First Mortgage Indenture has been
duly authorized by the Company and duly qualified under the 1939 Act and,
when duly executed and delivered by the Company and the Trustee or the
First Mortgage Trustee, as applicable, will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law).
(xi) AUTHORIZATION OF THE SENIOR NOTES. The Senior Notes have
been duly authorized and, at the Closing Time, will have been duly executed
by the Company and, when authenticated, issued and delivered in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor as provided in this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits
provided by, the Indenture.
(xii) AUTHORIZATION OF THE BONDS. The Bonds have been duly
authorized and, at the Closing Time, will have been duly executed by the
Company and, when authenticated, issued and delivered in the manner
provided for in the First Mortgage Indenture, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and secured by the lien of and
entitled to the benefits provided by, the First Mortgage Indenture.
(xiii) DESCRIPTION OF THE SENIOR NOTES, THE BONDS, THE INDENTURE
AND THE FIRST MORTGAGE INDENTURE. The Senior Notes, the Bonds, the
Indenture and the First Mortgage Indenture will conform in all material
respects to the respective statements relating thereto contained in the
Prospectus and will be in substantially the respective forms filed or
incorporated by reference, as the case may be, as exhibits to the
Registration Statement.
(xiv) ABSENCE OF DEFAULTS AND CONFLICTS. The Company is not in
violation of its Restated Certificate of Incorporation or By-Laws or in
default in the
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performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound, or to which
any of its property or assets is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement, the Indenture, the First Mortgage Indenture, the Senior Notes
and the Bonds and the consummation of the transactions contemplated herein
and in the Registration Statement (including the issuance and sale of the
Senior Notes and the use of the proceeds from the sale of the Senior Notes
as described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Company with its obligations hereunder and under the
Indenture, the First Mortgage Indenture, the Senior Notes and the Bonds
have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches, defaults or liens, charges or encumbrances that would not result
in a Material Adverse Effect), nor will such action result in any violation
of the provisions of the Restated Certificate of Incorporation or By-Laws
of the Company or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of
its assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company, other than such events or
conditions that are contemplated by the terms of this Agreement, the
Indenture, the First Mortgage Indenture, the Senior Notes, Additional
Senior Notes, the Bonds and the Additional Bonds.
(xv) ABSENCE OF PROCEEDINGS. Other than as disclosed in the
Registration Statement, there is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company, which is required to
be disclosed in the Registration Statement or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect its properties or assets or
the consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder. The aggregate of
all pending legal or governmental proceedings to which the Company is a
party or of which any of its property or assets is the subject which are
not described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xvi) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the
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documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(xvii) REGULATORY APPROVALS; ABSENCE OF FURTHER REQUIREMENTS. The
Corporation Commission of the State of Oklahoma (the "Oklahoma Commission")
and the Arkansas Public Service Commission (the "Arkansas Commission") have
each duly authorized the issuance and sale of the Senior Notes and the
issuance of the Bonds on terms consistent with this Agreement. No filing
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Senior Notes hereunder and the issuance of the Bonds or the
consummation of the transactions contemplated by this Agreement or for the
due execution, delivery or performance of the Indenture or the First
Mortgage Indenture by the Company, except such as have been already
obtained, including from the Oklahoma Commission and the Arkansas
Commission.
(xviii) POSSESSION OF LICENSES AND PERMITS. The Company possesses
such permits, licenses, approvals, consents and other authorizations issued
by the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct in all material respects the business now
operated by it and as described in the Registration Statement and
Prospectus (collectively, "Governmental Licenses"); the Company is in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses
are in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse Effect; and the
Company has not received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xix) TITLE TO PROPERTY. The Company has good and sufficient
title to all real property, principal plants and all other property owned
by it and which is material to the Company's operations, in each case, free
and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are described
in the Prospectus or (b) do not, singly or in the aggregate, materially
affect the value of such property and do not interfere with the use made
and proposed to be made of such property by the Company; and all of the
leases and subleases material to the business of the Company, and under
which the Company holds properties described in the Prospectus, are in full
force and effect, and the Company does not have notice of any material
claim of any sort that has been asserted by anyone adverse to the rights of
the Company under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company to the continued
possession of the leased or subleased premises under any such lease or
sublease.
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(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING
(a) SENIOR NOTES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price set forth in Schedule B, the aggregate principal amount of Senior
Notes set forth in Schedule A opposite the name of such Underwriter, plus any
additional principal amount of Senior Notes which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 11 hereof.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Senior Notes shall be made at the offices of Gardner,
Carton & Douglas, Quaker Tower, Suite 3100, 321 North Clark Street, Chicago,
Illinois 60610-4795, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M. (Central time) on the fourth
business day after the date hereof (unless postponed in accordance with the
provisions of Section 11), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Senior Notes to be purchased by them. It is understood
that each Underwriter had authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Senior Notes which it has agreed to purchase. Merrill Lynch, individually and
not as representative of the Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Senior Notes to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) DENOMINATIONS; REGISTRATION. One certificate for the Senior Notes
shall be in the amount of $125,000,000 and registered in the name of Cede & Co.,
as nominee of the Depository Trust Company. The Company will make the Senior
Notes, which may be in temporary form, available for examination and packaging
by the Representatives in The City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
(d) PAYMENT OF OKLAHOMA REAL ESTATE MORTGAGE TAX. The Representatives
agree to deposit with the Company within two business days after the date of
this Agreement the amount set forth in Schedule B hereto as the Oklahoma Real
Estate Mortgage Tax. It is understood that such payment shall not constitute
partial or full payment for the Senior Notes, but shall be applied solely in
accordance with Section 3(h) hereof.
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SECTION 3. COVENANTS OF THE COMPANY
The Company covenants with each Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 3(b), will comply with the requirements of Rule 424
of the 1933 Act Regulations ("Rule 424") or Rule 434, as applicable, and will
notify the Representatives immediately, and confirm the notice in writing,
(i) of the effectiveness of any post-effective amendment to the Registration
Statement, or of the filing of any supplement to the Prospectus or any amended
Prospectus, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Senior Notes or the Bonds for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters reasonably objects.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, in such number as the Representatives reasonably request, and will also
deliver to the Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted
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by the 1933 Act. The Company will furnish to each Underwriter, without
charge, during the period when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations and the 1939 Act and the 1939 Act Regulations so as to permit the
completion of the distribution of the Senior Notes as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the Senior Notes,
any event occurs or condition exists as a result of which it is necessary, in
the opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it is necessary, in
the opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) RULE 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(g) USE OF PROCEEDS. The Company will use the net proceeds received by it
from the sale of the Senior Notes in the manner specified in the Prospectus
under "Use of Proceeds."
(h) REAL ESTATE MORTGAGE TAX. The Company will use the amount deposited
by the Representatives with it pursuant to the last paragraph of Section 2
hereof to the extent necessary to pay for the account of the several
Underwriters, in the same proportion as the principal amount of Senior Notes to
be purchased by each of them bears to the total principal amount of Senior
Notes, any Oklahoma Real Estate Mortgage Tax required to be paid by them on the
Senior Notes and/or the Bonds. Any amount not so applied by the Company before
the Closing Time shall be remitted in same day funds by the Company to the
Representatives for the account of the several Underwriters at the Closing Time.
(i) RESTRICTION ON SALE OF SECURITIES. During the period beginning on the
date of this Agreement and continuing until the Closing Time, which period shall
in no event exceed 15 business days, the Company will not, without the prior
written consent of Merrill Lynch, in its sole discretion, directly or
indirectly, issue, sell, offer or contract to sell, grant any option for
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the sale of, or otherwise transfer or dispose of, any debt securities of the
Company which mature more than one year after the Closing Time and which are
substantially similar to the Senior Notes.
SECTION 4. PAYMENT OF EXPENSES
(a) EXPENSES. Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, the Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters, the Indenture,
the First Mortgage Indenture and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the Senior
Notes and the Bonds, (iii) all costs, taxes (other than any Oklahoma Real Estate
Mortgage Tax) and expenses incident to the preparation, issuance and delivery of
the Senior Notes to the Underwriters and the Bonds to the Trustee, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors,
(v) the printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheets and of the Prospectus and any amendments or
supplements thereto, (vi) the fees and expenses of the Trustee and the First
Mortgage Trustee, including the fees and disbursements of counsel for the
Trustee and the First Mortgage Trustee in connection with the Indenture, the
First Mortgage Indenture, the Senior Notes and the Bonds, and (vii) any fees
payable in connection with the rating of the Senior Notes and the Bonds.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 6 or
Section 10(a)(i) hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof and in certificates of any officer of the Company delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT; FILING OF PROSPECTUS. The
Registration Statement, including any Rule 462(b) Registration Statement, has
become effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Offering Terms shall have been filed with the
Commission in accordance with Rule 424(b) or, if the Company has elected to rely
upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
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(b) SECURITY FOR SENIOR NOTES. The Company shall have issued and
delivered to the Trustee the Bonds, as security for, among other things, the
Senior Notes.
(c) OPINIONS OF COUNSEL FOR COMPANY. At Closing Time, the Representatives
shall have received the favorable opinions, dated as of Closing Time, of
Gardner, Carton & Douglas, Rainey, Ross, Rice & Binns ("Oklahoma counsel) and
Chisenhall, Nestrud & Julian, P.A. ("Arkansas counsel"), each counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth below and to such further effect as counsel
to the Underwriters may reasonably request.
(i) OPINION OF OKLAHOMA COUNSEL.
(A) the Company is a legally existing corporation and is in good
standing under the laws of the State of Oklahoma and has corporate
power, right and authority to do business and to own property in the
State of Oklahoma in the manner and as set forth in the Prospectus;
(B) the Indenture has been duly and validly executed and
delivered by the Company, which has full power and authority to enter
into and perform its obligations thereunder; and the Indenture
constitutes the binding and enforceable agreement of the Company in
accordance with its terms, except as enforcement of provisions of the
Indenture may be limited by bankruptcy or other applicable laws
affecting the enforcement of creditors' rights;
(C) the Senior Notes and the Bonds are in the form contemplated
by the Indenture and the First Mortgage Indenture, respectively, have
been duly and validly authorized by the Company, constitute valid and
binding obligations of the Company and will be entitled to the
benefits of the Indenture and the First Mortgage Indenture,
respectively;
(D) while, except as otherwise stated in said opinion, such
counsel are not passing upon and do not assume responsibility for and
shall not be deemed to have independently verified the accuracy,
completeness or fairness of the Registration Statement or the
Prospectus, nothing has come to the attention of such counsel that
would lead them to believe that the Registration Statement at the time
it became effective 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 or that the
Prospectus at the time it was filed pursuant to Rule 424 and/or
Rule 434 under the 1933 Act or at the Closing Time contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(E) the execution and delivery of this Agreement have been duly
authorized by the necessary action on the part of the Company and this
Agreement constitutes the valid and binding agreement of the Company
except to the extent that the provisions for indemnities or
contribution may be held to be unenforceable as against public policy;
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(F) except in localities where the Company has no franchises,
which are relatively few and not of large population, or where the
failure to have such franchises will not have a material adverse
effect on the business or operations of the Company, the Company has
sufficient authority under statutory provisions or by grant of
franchises or permits by municipalities or counties to conduct its
business in Oklahoma as presently conducted and as described in the
Prospectus;
(G) such counsel does not know of any legal or governmental
proceedings required to be described in the Prospectus which are not
described as required, nor of any contracts or documents of a
character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement
which are not described and filed as required;
(H) the Indenture, the Senior Notes, the First Mortgage
Indenture, the First Mortgage Bonds and the Bonds conform in all
material respects to the statements concerning them in the Prospectus;
(I) all statements contained in the Registration Statement and
Prospectus purporting to set forth the advice or the opinion of such
counsel or to be based upon the opinion of such counsel correctly set
forth the opinion of such counsel on such respective matters;
(J) the execution and delivery of this Agreement and the
issuance of the Senior Notes and the Bonds, and compliance with the
provisions thereof, under the circumstances contemplated hereby and
thereby, do not and will not violate the Restated Certificate of
Incorporation or By-Laws of the Company, or in any material respect
conflict with or constitute on the part of the Company a breach of or
default under any indenture, lease, mortgage, deed of trust, note,
agreement or other instrument known to such counsel to which the
Company is a party or any law, regulation, consent decree or
administrative, arbitration or court order known to such counsel to
which the Company is subject;
(K) the Oklahoma Commission has duly issued its order
authorizing the issuance by the Company of the Senior Notes and the
Bonds on terms consistent with this Agreement and, to the best of such
counsel's knowledge, such order is still in force and effect; the
issuance and sale of the Senior Notes to the Underwriters and the
issuance of the Bonds to the Trustee are in conformity with the terms
of such order; and no further approval, authorization, consent,
certificate or order of any Oklahoma commission or regulatory
authority is necessary with respect to the due authorization,
execution and delivery of this Agreement, the due execution, delivery
or performance of the Indenture and the First Mortgage Indenture by
the Company or for the offering, issuance, sale or delivery of the
Senior Notes to the Underwriters and the issuance or delivery of the
Bonds by the Company to the Trustee as contemplated in this Agreement;
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(L) to the best of such counsel's knowledge, the Company does
not have any subsidiaries;
(M) the First Mortgage Indenture has been duly and validly
executed and delivered by the Company, which has full power and
authority to enter into and perform its obligations thereunder; and
the First Mortgage Indenture constitutes the binding and enforceable
agreement of the Company in accordance with its terms, except as
enforcement of provisions of the First Mortgage Indenture may be
limited by bankruptcy or other applicable laws affecting the
enforcement of creditors' rights and except as provisions of the
United States Bankruptcy Code may affect the validity of the lien
thereof with respect to property acquired or proceeds realized by the
Company within the 90-day period immediately preceding, or property
acquired or proceeds realized by the Company after, the commencement
of bankruptcy proceedings with respect to the Company;
(N) the Bonds have been duly and validly authorized by the
Company, and constitute valid and binding obligations of the Company
and, with like exception as noted in the foregoing subdivision (M),
are entitled to the lien of and benefits provided by the First
Mortgage Indenture;
(O) The First Mortgage Indenture is in proper form, conforming
to the laws of the State of Oklahoma, to give and create the lien
which it purports to create and has been and at the Closing Time is
duly and properly recorded or filed in all places in Oklahoma
necessary to effectuate the lien of the First Mortgage Indenture; and
(P) The Bonds are equally and ratably secured with all other
First Mortgage Bonds outstanding under the First Mortgage Indenture by
the First Mortgage Indenture subject to the provisions of the First
Mortgage Indenture relating to any sinking fund or a similar fund for
the benefit of the first mortgage bonds of any particular series. The
First Mortgage Indenture constitutes a first mortgage lien, subject
only to permissible encumbrances, as defined in the First Mortgage
Indenture, on all of the property, real, personal, and mixed (except
as hereinafter noted), in Oklahoma now owned by the Company. The First
Mortgage Indenture also constitutes a first mortgage lien, subject to
permissible encumbrances as defined in the First Mortgage Indenture,
on all property, real, personal, and mixed (except as hereinafter
noted), hereafter acquired by the Company in Oklahoma in conformity
with the terms of the First Mortgage Indenture, except as the United
States Bankruptcy Code may affect the validity of the lien of the
First Mortgage Indenture on property acquired or proceeds realized by
the Company within the 90-day period immediately preceding, or
property acquired or proceeds realized by the Company after, the
commencement of a case under such Code, except as to the prior lien of
the First Mortgage Trustee under the First Mortgage Indenture in
certain events specified therein and except as otherwise provided in
the First Mortgage Indenture in case of consolidation or merger.
There are excepted from the lien of the First Mortgage
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Indenture, as more fully set forth in the granting clauses thereof,
(1) all shares of stock, bonds, notes, evidences of indebtedness
and other securities other than such as may be or are required to be
deposited from time to time with the First Mortgage Trustee,
(2) cash other than such as may be or are required to be deposited
from time to time with the First Mortgage Trustee, (3) contracts,
claims, bills and accounts receivable, and choses in action
other than such as may be or are required to be from time to time
assigned to the First Mortgage Trustee, (4) motor vehicles,
(5) any oil, gas and other minerals under or on lands owned by
the Company, (6) goods, wares and merchandise, equipment and
supplies acquired for the purpose of sale or resale in the usual
course of business or for the purpose of consumption in the
operation, construction or repair of any of the properties of the
Company, and (7) certain properties specifically described in Schedule
B to the First Mortgage Indenture not used or useful in the business
of the Company. The Company, except as to permissible encumbrances,
as defined in the First Mortgage Indenture, has good and valid title
to the real and fixed properties in Oklahoma and franchises from
Oklahoma or federal authorities now owned by it (however, such opinion
need not cover titles to rights-of-way or easements for transmission
or distribution lines).
(ii) OPINION OF ARKANSAS COUNSEL.
(A) the Company is duly qualified as a foreign corporation and
is in good standing under the laws of the State of Arkansas and has
corporate power, right and authority to do business and to own
property in the State of Arkansas in the manner and as set forth in
the Prospectus;
(B) the First Mortgage Indenture is in proper form, conforming
to the laws of the State of Arkansas, to give and create the lien
which it purports to create and has been and at the Closing Time is
duly and properly recorded or filed in all places in Arkansas
necessary to effectuate the lien of the First Mortgage Indenture;
(C) the First Mortgage Indenture constitutes a first mortgage
lien, subject only to permissible encumbrances, as defined in the
First Mortgage Indenture, on all of the property, real, personal, and
mixed (except as hereinafter noted), in Arkansas now owned by the
Company. The First Mortgage Indenture also constitutes a first
mortgage lien, subject to permissible encumbrances as defined in the
First Mortgage Indenture, on all property, real, personal, and mixed
(except as hereinafter noted) hereafter acquired by the Company in
Arkansas in conformity with the terms of the First Mortgage Indenture,
except as the United States Bankruptcy Code may affect the validity of
the lien of the First Mortgage Indenture on property acquired or
proceeds realized by the Company within the 90-day period immediately
preceding, or property acquired or proceeds realized by the Company
after, the commencement of a case under such Code, except as to the
prior lien of the First Mortgage Trustee under the First Mortgage
Indenture in certain events specified therein and except as otherwise
provided in the First Mortgage Indenture in case of consolidation or
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merger. There are excepted from the lien of the First Mortgage
Indenture, as more fully set forth in the granting clauses thereof,
(1) all shares of stock, bonds, notes, evidences of indebtedness and
other securities other than such as may be or are required to be
deposited from time to time with the First Mortgage Trustee, (2) cash
other than such as may be or are required to be deposited from time to
time with the First Mortgage Trustee, (3) contracts, claims, bills and
accounts receivable, and choses in action other than such as may be or
are required to be from time to time assigned to the First Mortgage
Trustee, (4) motor vehicles, (5) any oil, gas and other minerals under
or on lands owned by the Company, (6) goods, wares and merchandise,
equipment and supplies acquired for the purpose of sale or resale in
the usual course of business or for the purpose of consumption in the
operation, construction or repair of any of the properties of the
Company, and (7) certain properties specifically described in Schedule
B to the First Mortgage Indenture not used or useful in the business
of the Company. The Company, except as to permissible encumbrances,
as defined in the First Mortgage Indenture, has good and valid title
to the real and fixed properties in Arkansas and franchises from
Arkansas authorities now owned by it (however, such opinion need not
cover titles to rights-of-way or easements for transmission or
distribution lines);
(D) except in localities where the Company has no franchises,
which are relatively few and not of large population, or where the
failure to have such franchises will not have a material adverse
effect on the business or operations of the Company, the Company has
sufficient authority under statutory provisions or by grant of
franchises or permits by municipalities or counties to conduct its
business in Arkansas as presently conducted and as described in the
Prospectus;
(E) all statements contained in the Registration Statement and
Prospectus purporting to set forth the advice or the opinion of such
counsel or to be based upon the opinion of such counsel correctly set
forth the opinion of such counsel on such respective matters;
(F) the Arkansas Commission has duly issued its order
authorizing the issuance and sale by the Company of the Senior Notes
and the issuance of the Bonds on terms consistent with this Agreement
and such order is still in force and effect; the issuance and sale of
the Senior Notes to the Underwriters and the issuance of the Bonds to
the Trustee is in conformity with the terms of such order; and no
further approval, authorization, consent, certificate or order of the
Arkansas Commission or any other governmental or regulatory authority
is necessary with respect to the due authorization, execution and
delivery of this Agreement, the due execution, delivery or performance
of the Indenture and the First Mortgage Indenture by the Company or
for the offering, issuance, sale and delivery of the Senior Notes and
the issuance or delivery of the Bonds by the Company to the Trustee as
contemplated in this Agreement; and
(G) such counsel is not handling any litigation relating to the
Company except as set forth in a schedule attached to such opinion.
17
<PAGE>
(iii) OPINION OF GARDNER, CARTON & DOUGLAS.
(A) such opinion shall cover the matters set forth in
subdivisions (A), (B), (C), (D), (E), (G), (H), (J), (L), (M) and (N)
of paragraph (c)(i) of this Section 5;
(B) the Registration Statement, including any Rule 462(b)
Registration Statement, has become effective under the 1933 Act, the
Prospectus Supplement has been filed pursuant to Rule 424(b) and/or
Rule 434 under the 1933 Act, and, to the best knowledge of said
counsel, no proceedings for a stop order in respect thereof are
pending or threatened under Section 8(d) or 8(e) of the 1933 Act;
(C) the Registration Statement, including any Rule 462(b)
Registration Statement, the Offering Terms and the Prospectus (except
as to the financial statements and financial or statistical data
contained therein, with respect to which said counsel need express no
opinion) comply as to form, in all material respects, with the
requirements of the 1933 Act, the 1934 Act and the 1939 Act and the
rules and regulations of the Commission under such Acts; and the
documents incorporated or deemed to be incorporated by reference in
the Registration Statement and the Prospectus (except as to the
financial statements and financial or statistical data contained
therein, with respect to which said counsel need express no opinion)
as of their respective dates of filing with the Commission complied as
to form in all material respects with the 1934 Act and the 1934 Act
Regulations;
(D) the Indenture and the First Mortgage Indenture have each
been qualified under the 1939 Act as and to the extent required by the
provisions of the 1939 Act; and
(E) all approvals, authorizations, consents, certificates or
orders of any state or federal commission or regulatory authority that
are necessary with respect to the issuance and sale of the Senior
Notes and the issuance of the Bonds by the Company as contemplated in
this Agreement have been obtained.
Such opinion may be subject to the reservation that, in giving
such opinion, said counsel has relied on the opinion of Oklahoma
counsel as to all matters of Oklahoma law and on the opinion of
Arkansas counsel as to all matters of Arkansas law (including without
limiting the foregoing all opinions as to titles of the Company to its
properties, the lien of the First Mortgage Indenture thereon, the
validity and sufficiency of franchises and permits, and the validity
and sufficiency of the orders described in subdivision (K) of
subsection (c)(i) of this Section 5 and subdivision (F) of subsection
(c)(i) of this Section 5), provided that such opinion shall state that
said counsel believes that the Underwriters and they are justified in
relying on the opinions of Oklahoma counsel and of Arkansas counsel.
18
<PAGE>
(d) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Jones, Day, Reavis & Pogue, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to such matters related to the issuance and sale of the Senior
Notes as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of Illinois and the federal law of the United States, upon the
opinions of Oklahoma counsel, Arkansas counsel or other counsel satisfactory to
the Representatives.
(e) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, results of operations, properties, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business, and the Representatives shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of Closing Time,
to the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in this Agreement are true and correct with the
same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and
(iv) 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 or, to their knowledge, are contemplated by the Commission.
(f) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Representatives shall have received from Arthur Andersen LLP a
letter, dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(g) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives shall
have received from Arthur Andersen LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (f) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(h) MAINTENANCE OF RATING. At Closing Time, the Senior Notes shall be
rated at least A1 by Moody's Investor's Service Inc. and AA- by Standard &
Poor's Ratings Service, Inc. Since the date of this Agreement, there shall not
have occurred a downgrading in the rating assigned to any of the Company's
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
1933 Act, and no such organization shall have publicly announced that it has
under surveillance or review its rating of the Senior Notes, the First Mortgage
Bonds or any of the Company's other securities.
19
<PAGE>
(i) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may require
for the purpose of enabling them to pass upon the issuance and sale of the
Senior Notes and issuance and delivery of the Bonds as herein contemplated, or
in order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale of the
Senior Notes and issuance and delivery of the Bonds as herein contemplated shall
be satisfactory in form and substance to the Representatives and counsel for the
Underwriters.
(j) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 7, 8 and 9 shall survive any such termination and remain
in full force and effect.
In giving the opinions contemplated by paragraphs (c) and (d) of this
Section 5, counsel may rely upon certificates of state officials as to the
Company's good standing and upon certificates of officers of the Company as to
matters of fact relevant to such opinions. In giving such opinions, counsel may
assume (i) that the Senior Notes and the Bonds have been executed on behalf of
the Company by the manual or facsimile signatures of the President or a Vice
President and the Secretary or an Assistant Secretary of the Company and have
been manually authenticated by an authorized official of the Trustee and First
Mortgage Trustee, respectively, (ii) that the signatures on all documents
examined by them are genuine, and (iii) that the written information supplied by
the Representatives and the other Underwriters expressly for use in the
Registration Statement or the Prospectus is adequate.
SECTION 6. CONDITIONS OF COMPANY'S OBLIGATIONS
The obligation of the Company to deliver the Senior Notes and the First
Mortgage Bonds upon payment therefor shall be subject to the following
conditions:
At the Closing Time, (a) the orders of the Oklahoma Commission and the
Arkansas Commission referred to in paragraph (xvii) of Section 1(a) hereof shall
be in full force and effect substantially in the form in which originally
entered and (b) no stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for that purpose shall then be
pending before, or threatened by, the Commission.
In case any of the conditions specified above in this Section 6 shall not
have been fulfilled, this Agreement may be terminated by the Company by
delivering written notice of termination to the Representatives. Any such
termination shall be without liability of any party to any other party except to
the extent provided in Section 4 hereof.
20
<PAGE>
SECTION 7. INDEMNIFICATION
(a) INDEMNIFICATION OF UNDERWRITERS. 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 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Offering Terms, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to
Section 7(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill Lynch),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with the written information furnished to the Company by
any Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Offering Terms, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), which information is set forth on Schedule C hereto. The foregoing
indemnity agreement is in addition to any liability which the Company may
otherwise have to any Underwriter or to any controlling person of that
Underwriter.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each Underwriter,
severally and not jointly, agrees to indemnify and hold harmless the Company,
its directors, each of its officers who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act
21
<PAGE>
against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), including the Offering Terms, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with the written information furnished to the Company by such
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), which information is set
forth on Schedule C hereto. The foregoing indemnity is in addition to any
liability which any Underwriter may otherwise have to the Company or any such
director, officer or controlling person.
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; PROVIDED,
HOWEVER, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or
Section 8 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability (including
any obligation to pay any amounts in settlements) arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
22
<PAGE>
SECTION 8. CONTRIBUTION
If the indemnification provided for in Section 7 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Senior Notes pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Senior
Notes pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Senior Notes
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the Senior Notes as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Senior Notes underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
23
<PAGE>
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the principal amount of Senior Notes set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company or any of its subsidiaries
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Senior Notes to the Underwriters.
SECTION 10. TERMINATION OF AGREEMENT
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
loss sustained by the Company by strike, fire, flood, accident or other calamity
of such character as to interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have
been insured, or any material adverse change in the condition, financial or
otherwise, or in the earnings, results of operations, properties, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representatives, impracticable to
market the Senior Notes or to enforce contracts for the sale of the Senior
Notes, or (iii) if trading in any securities of the Company has been suspended
or materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal, New York or Oklahoma authorities.
24
<PAGE>
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7, 8 and 9 shall survive such termination and remain in full force and
effect.
SECTION 11. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS
If one or more of the Underwriters fails at Closing Time to purchase the
Senior Notes which it or they are obligated to purchase under this Agreement
(the "Defaulted Senior Notes"), the Representatives will have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriter or underwriters, to purchase all, but not
less than all, of the Defaulted Senior Notes in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representatives do
not complete such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Senior Notes does not exceed 10% of
the aggregate principal amount of the Senior Notes to be purchased
hereunder, each of the non-defaulting Underwriters will be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear
to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Senior Notes exceeds 10% of the
aggregate principal amount of the Senior Notes to be purchased hereunder,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section will relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Company will have the right to
postpone Closing Time for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 11.
SECTION 12. NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives at Merrill Lynch & Co., World Financial Center, 9th Floor, 250
Vesey Street, North Tower, New York, New York 10281-1309, attention of Capital
Markets; Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167,
attention of Capital Markets; Lehman Brothers Inc., 3 World Financial Center,
16th Floor, New York, New York 10285-0900, attention of Capital Markets; and
Morgan Stanley Dean Witter, 1585 Broadway, New York, New York 10036, attention
of Capital Markets; each with a copy to Jones, Day, Reavis & Pogue, 77 West
Wacker, Chicago, Illinois 60601, Attention: Robert A. Yolles, Esq. Notices to
the Company shall be directed to it at Oklahoma Gas and Electric Company,
101 North Robinson, Oklahoma City, Oklahoma,
25
<PAGE>
Attention: President, with a copy to Gardner, Carton & Douglas, Quaker
Tower, Suite 3100, 321 North Clark Street, Chicago, Illinois 60610,
Attention: Peter D. Clarke, Esq.
SECTION 13. PARTIES
This Agreement shall each inure to the benefit of and be binding upon the
Underwriters and the Company and their respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Senior Notes from any Underwriter shall be deemed
to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF OKLAHOMA. Except as otherwise set forth herein, specified
times of day refer to New York City time.
SECTION 15. EFFECT OF HEADINGS
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
[Remainder of page intentionally left blank]
26
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
OKLAHOMA GAS AND ELECTRIC COMPANY
By /s/A.M. Strecker
------------------------------------
Title: Senior Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
BY: MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By /s/John Thorndike
--------------------------------------------------
Title: Managing Director-IBK Global Power Group
<PAGE>
SCHEDULE A
Principal
Amount of
Name of Underwriter Senior Notes
--------------------------------------------------------------- ------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated . . . . . . $ 31,250,000
Bear, Stearns & Co. Inc. . . . . . . . . . . . . . . . . . . . 31,250,000
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . . . 31,250,000
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . . 31,250,000
------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $125,000,000
------------
Sch. A-1
<PAGE>
SCHEDULE B
OKLAHOMA GAS AND ELECTRIC COMPANY
$125,000,000 Senior Notes, Series due July 15, 2027
1. The initial public offering price of the Senior Notes is 100% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Senior Notes
is 99.254% of the principal amount thereof.
3. The interest rate on the Senior Notes is 6.65% per annum.
4. The Company, at its option, may redeem on any date on or after August
15, 2007 all or, from time to time, any part of the Senior Notes at a redemption
price equal to the greater of (i) 100% of the principal amount of such Senior
Notes and (ii) the sum of the present values of the remaining scheduled payments
of principal and interest thereon from and after the date of redemption
discounted to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate (as defined in the
Indenture), plus in each case accrued and unpaid interest thereon to the date of
redemption.
5. The holder of each Senior Note may elect to have such Senior Note, or
any portion thereof which is a multiple of $1,000, repaid on July 15, 2007 at
100% of its principal amount plus accrued and unpaid interest to July 15, 2007.
6. The Oklahoma Real Estate Mortgage Tax is 0.096%.
Sch. B-1
<PAGE>
SCHEDULE C
The information set forth below constitutes the only information furnished
to the Company by any Underwriter expressly for use in the Registration
Statement (or any amendment thereto) or preliminary prospectus or the Prospectus
(or any amendment or supplement thereto):
The names of the Underwriters on the cover page and page S-7 of the
Prospectus Supplement dated July 15, 1997 (the "Prospectus Supplement"), the
information in the first paragraph on page S-2 of the Prospectus Supplement and
the information in the second paragraph, in the second sentence of the fourth
paragraph and in the fifth, sixth and seventh paragraphs on page S-7 of the
Prospectus Supplement.
Sch. C-1
<PAGE>
OKLAHOMA GAS AND ELECTRIC COMPANY
(an Oklahoma corporation)
$125,000,000 Senior Notes, Series due July 15, 2017
PURCHASE AGREEMENT
Dated: July 15, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. Representations and Warranties . . . . . . . . . . . . . . . . 3
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. . . . . . . . . 3
(i) Compliance with Registration Requirements. . . . . . . 3
(ii) Incorporated Documents . . . . . . . . . . . . . . . . 4
(iii) Independent Accountants. . . . . . . . . . . . . . . . 4
(iv) Financial Statements . . . . . . . . . . . . . . . . . 5
(v) No Material Adverse Change . . . . . . . . . . . . . . 5
(vi) Good Standing of the Company . . . . . . . . . . . . . 5
(vii) No Subsidiaries. . . . . . . . . . . . . . . . . . . . 5
(viii) Capitalization . . . . . . . . . . . . . . . . . . . . 5
(ix) Authorization of Agreement . . . . . . . . . . . . . . 6
(x) Authorization of the Indenture and the First Mortgage
Indenture. . . . . . . . . . . . . . . . . . . . . . . 6
(xi) Authorization of the Senior Notes. . . . . . . . . . . 6
(xii) Authorization of the Bonds . . . . . . . . . . . . . . 6
(xiii) Description of the Senior Notes, the Bonds, the
Indenture and the First Mortgage Indenture . . . . . . 6
(xiv) Absence of Defaults and Conflicts. . . . . . . . . . . 6
(xv) Absence of Proceedings . . . . . . . . . . . . . . . . 7
(xvi) Accuracy of Exhibits . . . . . . . . . . . . . . . . . 7
(xvii) Regulatory Approvals; Absence of Further Requirements. 8
(xviii) Possession of Licenses and Permits . . . . . . . . . . 8
(xix) Title to Property. . . . . . . . . . . . . . . . . . . 8
(b) OFFICER'S CERTIFICATES . . . . . . . . . . . . . . . . . . . . 9
SECTION 2. Sale and Delivery to Underwriters; Closing . . . . . . . . . . 9
(a) SENIOR NOTES . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) DENOMINATIONS; REGISTRATION. . . . . . . . . . . . . . . . . . 9
(d) PAYMENT OF OKLAHOMA REAL ESTATE MORTGAGE TAX . . . . . . . . . 9
SECTION 3. Covenants of the Company . . . . . . . . . . . . . . . . . . . 10
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS 10
(b) FILING OF AMENDMENTS . . . . . . . . . . . . . . . . . . . . . 10
(c) DELIVERY OF REGISTRATION STATEMENTS. . . . . . . . . . . . . . 10
(d) DELIVERY OF PROSPECTUSES . . . . . . . . . . . . . . . . . . . 10
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. . . . . . . . . . . 11
(f) RULE 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(g) USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 11
(h) REAL ESTATE MORTGAGE TAX . . . . . . . . . . . . . . . . . . . 11
(i) RESTRICTION ON SALE OF SECURITIES. . . . . . . . . . . . . . . 11
SECTION 4. Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . 12
(a) EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . 12
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SECTION 5. Conditions of Underwriters' Obligations. . . . . . . . . . . . 12
(a) EFFECTIVENESS OF REGISTRATION STATEMENT; FILING OF PROSPECTUS. 12
(b) SECURITY FOR SENIOR NOTES. . . . . . . . . . . . . . . . . . . 13
(c) OPINIONS OF COUNSEL FOR COMPANY. . . . . . . . . . . . . . . . 13
(i) Opinion of Oklahoma Counsel. . . . . . . . . . . . . . 13
(ii) Opinion of Arkansas Counsel. . . . . . . . . . . . . . 16
(iii) Opinion of Gardner, Carton & Douglas . . . . . . . . . 18
(d) OPINION OF COUNSEL FOR UNDERWRITERS. . . . . . . . . . . . . . 19
(e) OFFICERS' CERTIFICATE. . . . . . . . . . . . . . . . . . . . . 19
(f) ACCOUNTANT'S COMFORT LETTER. . . . . . . . . . . . . . . . . . 19
(g) BRING-DOWN COMFORT LETTER. . . . . . . . . . . . . . . . . . . 19
(h) MAINTENANCE OF RATING. . . . . . . . . . . . . . . . . . . . . 19
(i) ADDITIONAL DOCUMENTS . . . . . . . . . . . . . . . . . . . . . 20
(j) TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . 20
SECTION 6. Conditions of Company's Obligations. . . . . . . . . . . . . . 20
SECTION 7. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 21
(a) INDEMNIFICATION OF UNDERWRITERS. . . . . . . . . . . . . . . . 21
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS . . . . . . 21
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. . . . . . . . . . . . . 22
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE . . . . . . 22
SECTION 8. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 9. Representations, Warranties and Agreements to Survive Delivery 24
SECTION 10. Termination of Agreement . . . . . . . . . . . . . . . . . . . 24
(a) TERMINATION; GENERAL . . . . . . . . . . . . . . . . . . . . . 24
(b) LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11. Default by One or More of the Underwriters . . . . . . . . . . 25
SECTION 12. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 13. Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 14. Governing Law and Time . . . . . . . . . . . . . . . . . . . . 26
SECTION 15. Effect of Headings . . . . . . . . . . . . . . . . . . . . . . 26
SCHEDULES
Schedule A -- List of Underwriters . . . . . . . . . . . . . . . . . .Sch. A-1
Schedule B -- Pricing Information. . . . . . . . . . . . . . . . . . .Sch. B-1
Schedule C -- Information Provided by Underwriters . . . . . . . . . .Sch. C-1
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OKLAHOMA GAS AND ELECTRIC COMPANY
(AN OKLAHOMA CORPORATION)
$125,000,000
SENIOR NOTES, SERIES DUE JULY 15, 2017
PURCHASE AGREEMENT
July 15, 1997
Lehman Brothers Inc.
Bear, Stearns & Co. Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
as Representatives of the several Underwriters
c/o Lehman Brothers Inc.
3 World Financial Center, 16th Floor
New York, New York 10285-0900
Ladies and Gentlemen:
Oklahoma Gas and Electric Company, an Oklahoma corporation (the "Company"),
confirms its agreement with Lehman Brothers Inc. ("Lehman Brothers") and each of
the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term includes any underwriter substituted as hereinafter
provided in Section 11 hereof), for whom Lehman Brothers, Bear, Stearns & Co.
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley &
Co. Incorporated are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective principal amounts set forth in said Schedule A of $125,000,000
aggregate principal amount of the Company's Senior Notes, Series due July 15,
2017 (the "Senior Notes"). The Senior Notes are to be issued pursuant to the
Indenture dated as of October 1, 1995 between the Company and NationsBank, N.A.,
as trustee (the "Trustee"), as heretofore amended and supplemented and as
amended and supplemented by Supplemental Indenture No. 2, dated as of July 1,
1997, creating the series in which the Senior Notes are to be issued. The term
"Indenture," as used herein, means such Indenture, dated as of October 1, 1995,
<PAGE>
as so amended and supplemented and includes the Company Order (as defined in the
Indenture), if any, establishing the form and terms of the Senior Notes pursuant
to the Indenture.
Until such time as all of the first mortgage bonds of the Company (the
"First Mortgage Bonds") issued prior to the date of the Indenture have been
retired through payment or redemption, the Senior Notes will be secured as to
payment of principal and interest by one or more series of First Mortgage Bonds
issued, pledged and delivered by the Company to the Trustee. Prior to the
issuance of the Senior Notes, the Company will deliver to the Trustee, as
security for the payment of principal and interest on the Senior Notes, a series
of First Mortgage Bonds (the "Bonds") in the same aggregate principal amount and
with the same stated rate or rates of interest (or interest calculated in the
same manner), payment dates, maturity dates, repayment provisions and redemption
provisions as the Senior Notes. The Bonds will be issued by the Company under
its Trust Indenture dated February 1, 1945, between the Company and NationsBank,
N.A., as successor trustee (the "First Mortgage Trustee"), as heretofore amended
and supplemented and as to be further amended and supplemented by the
Supplemental Trust Indenture dated July 1, 1997 creating the Bonds. The term
"First Mortgage Indenture," as used herein, means such Trust Indenture, dated
February 1, 1945, as so amended and supplemented.
Concurrently with the offering of the Senior Notes, the Company proposes to
issue and sell $125,000,000 of its 6.65% Senior Notes, Series due July 15, 2027
(the "Additional Senior Notes"). Prior to the issuance of the Additional Senior
Notes, the Company will deliver to the Trustee, as security for the payment of
principal and interest on the Senior Notes, a series of First Mortgage Bonds
(the "Additional Bonds") in the same aggregate principal amount and with the
same stated rate or rates of interest (or interest calculated in the same
manner), payment dates, maturity dates, repayment provisions and redemption
provisions as the Additional Senior Notes. The Additional Bonds will also be
issued by the Company under the First Mortgage Indenture. The sale of the
Senior Notes and the Additional Senior Notes are not contingent upon each other.
The Company understands that the Underwriters propose to make a public
offering of the Senior Notes as soon as the Representatives deem advisable after
this Agreement has been executed and delivered and the Indenture and the First
Mortgage Indenture have been qualified under the Trust Indenture Act of 1939, as
amended (the "1939 Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-02319) covering the
registration of the Senior Notes, the Bonds, the Additional Senior Notes and the
Additional Bonds under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus or prospectuses. Promptly after
execution and delivery of this Agreement, the Company will either (i) prepare
and file a prospectus in accordance with paragraph (b) of Rule 424
("Rule 424(b)") of the rules and regulations of the Commission under the 1933
Act (the "1933 Act Regulations") or (ii) if the Company has elected to rely upon
Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet
(a "Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
The information included in such prospectus or in such Term Sheet, as the case
may be, that was omitted from such registration statement at the time it became
effective is referred to as the "Offering Terms." Each prospectus used before
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<PAGE>
such registration statement became effective, and any prospectus that omitted
the Offering Terms, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Offering Terms, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
1933 Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final prospectus, including
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the form first furnished to the Underwriters for use in
connection with the offering of the Senior Notes and the Bonds is herein called
the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer
to the preliminary prospectus dated July 15, 1997 together with the Term Sheet
and all references in this Agreement to the date of the Prospectus shall mean
the date of the Term Sheet. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act") which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each Underwriter as of the date hereof and as of the Closing
Time referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
3
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At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the
Rule 462(b) Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act
and the rules and regulations of the Commission under the 1939 Act (the
"1939 Act Regulations"), and did not and will not contain 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. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time, included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to (A)
that part of the Registration Statement which constitutes the Statements of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act (the
"Statements of Eligibility") of the Trustee and the trustee for the First
Mortgage Bonds, (B) information contained in the Registration Statement or
the Prospectus relating to The Depository Trust Company and its book-entry
system, or (C) statements in or omissions from the Registration Statement
or Prospectus made in reliance upon and in conformity with the information
furnished to the Company in writing by any Underwriter through Lehman
Brothers expressly for use in the Registration Statement or Prospectus that
is set forth on Schedule C hereto.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement and
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations or the 1934 Act
and the rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), as applicable, and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective, at the time the Prospectus was issued and at the Closing
Time, did not and will not contain 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.
(iii) INDEPENDENT ACCOUNTANTS. Arthur Andersen LLP, the
accountants who examined the financial statements and supporting schedules
4
<PAGE>
included in the Registration Statement, are independent public accountants
as required by the 1933 Act and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements included in
the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved, except as otherwise stated in the notes thereto. The
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The selected financial information included in the
Prospectus presents fairly the information shown therein and has been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The Company has no
material contingent obligation which is not disclosed in the Prospectus.
(v) NO MATERIAL ADVERSE CHANGE. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, results of operations, properties, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company, other than those in the ordinary course of
business, which are material with respect to the Company, and (C) except
for regular quarterly dividends on the Common Stock, par value $2.50 per
share, of the Company in amounts consistent with past practice, and regular
quarterly dividends on the Company's Preferred Stock, there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Oklahoma and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vii) NO SUBSIDIARIES. The Company has no subsidiaries.
(viii) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as stated in the Prospectus.
5
<PAGE>
(ix) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) AUTHORIZATION OF THE INDENTURE AND THE FIRST MORTGAGE
INDENTURE. Each of the Indenture and the First Mortgage Indenture has been
duly authorized by the Company and duly qualified under the 1939 Act and,
when duly executed and delivered by the Company and the Trustee or the
First Mortgage Trustee, as applicable, will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law).
(xi) AUTHORIZATION OF THE SENIOR NOTES. The Senior Notes have
been duly authorized and, at the Closing Time, will have been duly executed
by the Company and, when authenticated, issued and delivered in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor as provided in this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits
provided by, the Indenture.
(xii) AUTHORIZATION OF THE BONDS. The Bonds have been duly
authorized and, at the Closing Time, will have been duly executed by the
Company and, when authenticated, issued and delivered in the manner
provided for in the First Mortgage Indenture, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and secured by the lien of and
entitled to the benefits provided by, the First Mortgage Indenture.
(xiii) DESCRIPTION OF THE SENIOR NOTES, THE BONDS, THE INDENTURE
AND THE FIRST MORTGAGE INDENTURE. The Senior Notes, the Bonds, the
Indenture and the First Mortgage Indenture will conform in all material
respects to the respective statements relating thereto contained in the
Prospectus and will be in substantially the respective forms filed or
incorporated by reference, as the case may be, as exhibits to the
Registration Statement.
(xiv) ABSENCE OF DEFAULTS AND CONFLICTS. The Company is not in
violation of its Restated Certificate of Incorporation or By-Laws or in
6
<PAGE>
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which it is a party or by which it may be bound, or to which
any of its property or assets is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement, the Indenture, the First Mortgage Indenture, the Senior Notes
and the Bonds and the consummation of the transactions contemplated herein
and in the Registration Statement (including the issuance and sale of the
Senior Notes and the use of the proceeds from the sale of the Senior Notes
as described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Company with its obligations hereunder and under the
Indenture, the First Mortgage Indenture, the Senior Notes and the Bonds
have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches, defaults or liens, charges or encumbrances that would not result
in a Material Adverse Effect), nor will such action result in any violation
of the provisions of the Restated Certificate of Incorporation or By-Laws
of the Company or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of
its assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company, other than such events or
conditions that are contemplated by the terms of this Agreement, the
Indenture, the First Mortgage Indenture, the Senior Notes, Additional
Senior Notes, the Bonds and the Additional Bonds.
(xv) ABSENCE OF PROCEEDINGS. Other than as disclosed in the
Registration Statement, there is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company, which is required to
be disclosed in the Registration Statement or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect its properties or assets or
the consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder. The aggregate of
all pending legal or governmental proceedings to which the Company is a
party or of which any of its property or assets is the subject which are
not described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xvi) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
7
<PAGE>
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xvii) REGULATORY APPROVALS; ABSENCE OF FURTHER REQUIREMENTS. The
Corporation Commission of the State of Oklahoma (the "Oklahoma Commission")
and the Arkansas Public Service Commission (the "Arkansas Commission") have
each duly authorized the issuance and sale of the Senior Notes and the
issuance of the Bonds on terms consistent with this Agreement. No filing
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Senior Notes hereunder and the issuance of the Bonds or the
consummation of the transactions contemplated by this Agreement or for the
due execution, delivery or performance of the Indenture or the First
Mortgage Indenture by the Company, except such as have been already
obtained, including from the Oklahoma Commission and the Arkansas
Commission.
(xviii) POSSESSION OF LICENSES AND PERMITS. The Company possesses
such permits, licenses, approvals, consents and other authorizations issued
by the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct in all material respects the business now
operated by it and as described in the Registration Statement and
Prospectus (collectively, "Governmental Licenses"); the Company is in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses
are in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse Effect; and the
Company has not received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xix) TITLE TO PROPERTY. The Company has good and sufficient
title to all real property, principal plants and all other property owned
by it and which is material to the Company's operations, in each case, free
and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are described
in the Prospectus or (b) do not, singly or in the aggregate, materially
affect the value of such property and do not interfere with the use made
and proposed to be made of such property by the Company; and all of the
leases and subleases material to the business of the Company, and under
which the Company holds properties described in the Prospectus, are in full
force and effect, and the Company does not have notice of any material
claim of any sort that has been asserted by anyone adverse to the rights of
the Company under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company to the continued
possession of the leased or subleased premises under any such lease or
sublease.
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(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING
(a) SENIOR NOTES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price set forth in Schedule B, the aggregate principal amount of Senior
Notes set forth in Schedule A opposite the name of such Underwriter, plus any
additional principal amount of Senior Notes which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 11 hereof.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Senior Notes shall be made at the offices of Gardner,
Carton & Douglas, Quaker Tower, Suite 3100, 321 North Clark Street, Chicago,
Illinois 60610-4795, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M. (Central time) on the fourth
business day after the date hereof (unless postponed in accordance with the
provisions of Section 11), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Senior Notes to be purchased by them. It is understood
that each Underwriter had authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Senior Notes which it has agreed to purchase. Lehman Brothers, individually and
not as representative of the Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Senior Notes to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) DENOMINATIONS; REGISTRATION. One certificate for the Senior Notes
shall be in the amount of $125,000,000 and registered in the name of Cede & Co.,
as nominee of the Depository Trust Company. The Company will make the Senior
Notes, which may be in temporary form, available for examination and packaging
by the Representatives in The City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
(d) PAYMENT OF OKLAHOMA REAL ESTATE MORTGAGE TAX. The Representatives
agree to deposit with the Company within two business days after the date of
this Agreement the amount set forth in Schedule B hereto as the Oklahoma Real
Estate Mortgage Tax. It is understood that such payment shall not constitute
partial or full payment for the Senior Notes, but shall be applied solely in
accordance with Section 3(h) hereof.
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SECTION 3. COVENANTS OF THE COMPANY
The Company covenants with each Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 3(b), will comply with the requirements of Rule 424
of the 1933 Act Regulations ("Rule 424") or Rule 434, as applicable, and will
notify the Representatives immediately, and confirm the notice in writing,
(i) of the effectiveness of any post-effective amendment to the Registration
Statement, or of the filing of any supplement to the Prospectus or any amended
Prospectus, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Senior Notes or the Bonds for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters reasonably objects.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, in such number as the Representatives reasonably request, and will also
deliver to the Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
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use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations and the 1939 Act and the 1939 Act Regulations so as to permit the
completion of the distribution of the Senior Notes as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the Senior Notes,
any event occurs or condition exists as a result of which it is necessary, in
the opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it is necessary, in
the opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) RULE 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(g) USE OF PROCEEDS. The Company will use the net proceeds received by it
from the sale of the Senior Notes in the manner specified in the Prospectus
under "Use of Proceeds."
(h) REAL ESTATE MORTGAGE TAX. The Company will use the amount deposited
by the Representatives with it pursuant to the last paragraph of Section 2
hereof to the extent necessary to pay for the account of the several
Underwriters, in the same proportion as the principal amount of Senior Notes to
be purchased by each of them bears to the total principal amount of Senior
Notes, any Oklahoma Real Estate Mortgage Tax required to be paid by them on the
Senior Notes and/or the Bonds. Any amount not so applied by the Company before
the Closing Time shall be remitted in same day funds by the Company to the
Representatives for the account of the several Underwriters at the Closing Time.
(i) RESTRICTION ON SALE OF SECURITIES. During the period beginning on the
date of this Agreement and continuing until the Closing Time, which period shall
in no event exceed 15 business days, the Company will not, without the prior
written consent of Lehman Brothers, in its sole discretion, directly or
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indirectly, issue, sell, offer or contract to sell, grant any option for the
sale of, or otherwise transfer or dispose of, any debt securities of the Company
which mature more than one year after the Closing Time and which are
substantially similar to the Senior Notes.
SECTION 4. PAYMENT OF EXPENSES
(a) EXPENSES. Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, the Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters, the Indenture,
the First Mortgage Indenture and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the Senior
Notes and the Bonds, (iii) all costs, taxes (other than any Oklahoma Real Estate
Mortgage Tax) and expenses incident to the preparation, issuance and delivery of
the Senior Notes to the Underwriters and the Bonds to the Trustee, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors,
(v) the printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheets and of the Prospectus and any amendments or
supplements thereto, (vi) the fees and expenses of the Trustee and the First
Mortgage Trustee, including the fees and disbursements of counsel for the
Trustee and the First Mortgage Trustee in connection with the Indenture, the
First Mortgage Indenture, the Senior Notes and the Bonds, and (vii) any fees
payable in connection with the rating of the Senior Notes and the Bonds.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 6 or
Section 10(a)(i) hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof and in certificates of any officer of the Company delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT; FILING OF PROSPECTUS. The
Registration Statement, including any Rule 462(b) Registration Statement, has
become effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Offering Terms shall have been filed with the
Commission in accordance with Rule 424(b) or, if the Company has elected to rely
upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
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(b) SECURITY FOR SENIOR NOTES. The Company shall have issued and
delivered to the Trustee the Bonds, as security for, among other things, the
Senior Notes.
(c) OPINIONS OF COUNSEL FOR COMPANY. At Closing Time, the Representatives
shall have received the favorable opinions, dated as of Closing Time, of
Gardner, Carton & Douglas, Rainey, Ross, Rice & Binns ("Oklahoma counsel) and
Chisenhall, Nestrud & Julian, P.A. ("Arkansas counsel"), each counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth below and to such further effect as counsel
to the Underwriters may reasonably request.
(i) OPINION OF OKLAHOMA COUNSEL.
(A) the Company is a legally existing corporation and is in good
standing under the laws of the State of Oklahoma and has corporate
power, right and authority to do business and to own property in the
State of Oklahoma in the manner and as set forth in the Prospectus;
(B) the Indenture has been duly and validly executed and
delivered by the Company, which has full power and authority to enter
into and perform its obligations thereunder; and the Indenture
constitutes the binding and enforceable agreement of the Company in
accordance with its terms, except as enforcement of provisions of the
Indenture may be limited by bankruptcy or other applicable laws
affecting the enforcement of creditors' rights;
(C) the Senior Notes and the Bonds are in the form contemplated
by the Indenture and the First Mortgage Indenture, respectively, have
been duly and validly authorized by the Company, constitute valid and
binding obligations of the Company and will be entitled to the
benefits of the Indenture and the First Mortgage Indenture,
respectively;
(D) while, except as otherwise stated in said opinion, such
counsel are not passing upon and do not assume responsibility for and
shall not be deemed to have independently verified the accuracy,
completeness or fairness of the Registration Statement or the
Prospectus, nothing has come to the attention of such counsel that
would lead them to believe that the Registration Statement at the time
it became effective 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 or that the
Prospectus at the time it was filed pursuant to Rule 424 and/or
Rule 434 under the 1933 Act or at the Closing Time contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(E) the execution and delivery of this Agreement have been duly
authorized by the necessary action on the part of the Company and this
Agreement constitutes the valid and binding agreement of the Company
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except to the extent that the provisions for indemnities or
contribution may be held to be unenforceable as against public policy;
(F) except in localities where the Company has no franchises,
which are relatively few and not of large population, or where the
failure to have such franchises will not have a material adverse
effect on the business or operations of the Company, the Company has
sufficient authority under statutory provisions or by grant of
franchises or permits by municipalities or counties to conduct its
business in Oklahoma as presently conducted and as described in the
Prospectus;
(G) such counsel does not know of any legal or governmental
proceedings required to be described in the Prospectus which are not
described as required, nor of any contracts or documents of a
character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement
which are not described and filed as required;
(H) the Indenture, the Senior Notes, the First Mortgage
Indenture, the First Mortgage Bonds and the Bonds conform in all
material respects to the statements concerning them in the Prospectus;
(I) all statements contained in the Registration Statement and
Prospectus purporting to set forth the advice or the opinion of such
counsel or to be based upon the opinion of such counsel correctly set
forth the opinion of such counsel on such respective matters;
(J) the execution and delivery of this Agreement and the
issuance of the Senior Notes and the Bonds, and compliance with the
provisions thereof, under the circumstances contemplated hereby and
thereby, do not and will not violate the Restated Certificate of
Incorporation or By-Laws of the Company, or in any material respect
conflict with or constitute on the part of the Company a breach of or
default under any indenture, lease, mortgage, deed of trust, note,
agreement or other instrument known to such counsel to which the
Company is a party or any law, regulation, consent decree or
administrative, arbitration or court order known to such counsel to
which the Company is subject;
(K) the Oklahoma Commission has duly issued its order
authorizing the issuance by the Company of the Senior Notes and the
Bonds on terms consistent with this Agreement and, to the best of such
counsel's knowledge, such order is still in force and effect; the
issuance and sale of the Senior Notes to the Underwriters and the
issuance of the Bonds to the Trustee are in conformity with the terms
of such order; and no further approval, authorization, consent,
certificate or order of any Oklahoma commission or regulatory
authority is necessary with respect to the due authorization,
execution and delivery of this Agreement, the due execution, delivery
or performance of the Indenture and the First Mortgage Indenture by
the Company or for the offering, issuance, sale or delivery of the
Senior Notes to the Underwriters and the issuance or delivery of the
Bonds by the Company to the Trustee as contemplated in this Agreement;
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(L) to the best of such counsel's knowledge, the Company does
not have any subsidiaries;
(M) the First Mortgage Indenture has been duly and validly
executed and delivered by the Company, which has full power and
authority to enter into and perform its obligations thereunder; and
the First Mortgage Indenture constitutes the binding and enforceable
agreement of the Company in accordance with its terms, except as
enforcement of provisions of the First Mortgage Indenture may be
limited by bankruptcy or other applicable laws affecting the
enforcement of creditors' rights and except as provisions of the
United States Bankruptcy Code may affect the validity of the lien
thereof with respect to property acquired or proceeds realized by the
Company within the 90-day period immediately preceding, or property
acquired or proceeds realized by the Company after, the commencement
of bankruptcy proceedings with respect to the Company;
(N) the Bonds have been duly and validly authorized by the
Company, and constitute valid and binding obligations of the Company
and, with like exception as noted in the foregoing subdivision (M),
are entitled to the lien of and benefits provided by the First
Mortgage Indenture;
(O) The First Mortgage Indenture is in proper form, conforming
to the laws of the State of Oklahoma, to give and create the lien
which it purports to create and has been and at the Closing Time is
duly and properly recorded or filed in all places in Oklahoma
necessary to effectuate the lien of the First Mortgage Indenture; and
(P) The Bonds are equally and ratably secured with all other
First Mortgage Bonds outstanding under the First Mortgage Indenture by
the First Mortgage Indenture subject to the provisions of the First
Mortgage Indenture relating to any sinking fund or a similar fund for
the benefit of the first mortgage bonds of any particular series. The
First Mortgage Indenture constitutes a first mortgage lien, subject
only to permissible encumbrances, as defined in the First Mortgage
Indenture, on all of the property, real, personal, and mixed (except
as hereinafter noted), in Oklahoma now owned by the Company. The First
Mortgage Indenture also constitutes a first mortgage lien, subject to
permissible encumbrances as defined in the First Mortgage Indenture,
on all property, real, personal, and mixed (except as hereinafter
noted), hereafter acquired by the Company in Oklahoma in conformity
with the terms of the First Mortgage Indenture, except as the United
States Bankruptcy Code may affect the validity of the lien of the
First Mortgage Indenture on property acquired or proceeds realized by
the Company within the 90-day period immediately preceding, or
property acquired or proceeds realized by the Company after, the
commencement of a case under such Code, except as to the prior lien of
the First Mortgage Trustee under the First Mortgage Indenture in
certain events specified therein and except as otherwise provided in
the First Mortgage Indenture in case of consolidation or merger.
There are excepted from the lien of the First Mortgage Indenture, as
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more fully set forth in the granting clauses thereof, (1) all shares
of stock, bonds, notes, evidences of indebtedness and other securities
other than such as may be or are required to be deposited from time to
time with the First Mortgage Trustee, (2) cash other than such as may
be or are required to be deposited from time to time with the First
Mortgage Trustee, (3) contracts, claims, bills and accounts
receivable, and choses in action other than such as may be or are
required to be from time to time assigned to the First Mortgage
Trustee, (4) motor vehicles, (5) any oil, gas and other minerals under
or on lands owned by the Company, (6) goods, wares and merchandise,
equipment and supplies acquired for the purpose of sale or resale in
the usual course of business or for the purpose of consumption in the
operation, construction or repair of any of the properties of the
Company, and (7) certain properties specifically described in Schedule
B to the First Mortgage Indenture not used or useful in the business
of the Company. The Company, except as to permissible encumbrances,
as defined in the First Mortgage Indenture, has good and valid title
to the real and fixed properties in Oklahoma and franchises from
Oklahoma or federal authorities now owned by it (however, such opinion
need not cover titles to rights-of-way or easements for transmission
or distribution lines).
(ii) OPINION OF ARKANSAS COUNSEL.
(A) the Company is duly qualified as a foreign corporation and
is in good standing under the laws of the State of Arkansas and has
corporate power, right and authority to do business and to own
property in the State of Arkansas in the manner and as set forth in
the Prospectus;
(B) the First Mortgage Indenture is in proper form, conforming
to the laws of the State of Arkansas, to give and create the lien
which it purports to create and has been and at the Closing Time is
duly and properly recorded or filed in all places in Arkansas
necessary to effectuate the lien of the First Mortgage Indenture;
(C) the First Mortgage Indenture constitutes a first mortgage
lien, subject only to permissible encumbrances, as defined in the
First Mortgage Indenture, on all of the property, real, personal, and
mixed (except as hereinafter noted), in Arkansas now owned by the
Company. The First Mortgage Indenture also constitutes a first
mortgage lien, subject to permissible encumbrances as defined in the
First Mortgage Indenture, on all property, real, personal, and mixed
(except as hereinafter noted) hereafter acquired by the Company in
Arkansas in conformity with the terms of the First Mortgage Indenture,
except as the United States Bankruptcy Code may affect the validity of
the lien of the First Mortgage Indenture on property acquired or
proceeds realized by the Company within the 90-day period immediately
preceding, or property acquired or proceeds realized by the Company
after, the commencement of a case under such Code, except as to the
prior lien of the First Mortgage Trustee under the First Mortgage
Indenture in certain events specified therein and except as otherwise
provided in the First Mortgage Indenture in case of consolidation or
merger. There are excepted from the lien of the First Mortgage
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Indenture, as more fully set forth in the granting clauses thereof,
(1) all shares of stock, bonds, notes, evidences of indebtedness and
other securities other than such as may be or are required to be
deposited from time to time with the First Mortgage Trustee, (2) cash
other than such as may be or are required to be deposited from time to
time with the First Mortgage Trustee, (3) contracts, claims, bills and
accounts receivable, and choses in action other than such as may be or
are required to be from time to time assigned to the First Mortgage
Trustee, (4) motor vehicles, (5) any oil, gas and other minerals under
or on lands owned by the Company, (6) goods, wares and merchandise,
equipment and supplies acquired for the purpose of sale or resale in
the usual course of business or for the purpose of consumption in the
operation, construction or repair of any of the properties of the
Company, and (7) certain properties specifically described in Schedule
B to the First Mortgage Indenture not used or useful in the business
of the Company. The Company, except as to permissible encumbrances,
as defined in the First Mortgage Indenture, has good and valid title
to the real and fixed properties in Arkansas and franchises from
Arkansas authorities now owned by it (however, such opinion need not
cover titles to rights-of-way or easements for transmission or
distribution lines);
(D) except in localities where the Company has no franchises,
which are relatively few and not of large population, or where the
failure to have such franchises will not have a material adverse
effect on the business or operations of the Company, the Company has
sufficient authority under statutory provisions or by grant of
franchises or permits by municipalities or counties to conduct its
business in Arkansas as presently conducted and as described in the
Prospectus;
(E) all statements contained in the Registration Statement and
Prospectus purporting to set forth the advice or the opinion of such
counsel or to be based upon the opinion of such counsel correctly set
forth the opinion of such counsel on such respective matters;
(F) the Arkansas Commission has duly issued its order
authorizing the issuance and sale by the Company of the Senior Notes
and the issuance of the Bonds on terms consistent with this Agreement
and such order is still in force and effect; the issuance and sale of
the Senior Notes to the Underwriters and the issuance of the Bonds to
the Trustee is in conformity with the terms of such order; and no
further approval, authorization, consent, certificate or order of the
Arkansas Commission or any other governmental or regulatory authority
is necessary with respect to the due authorization, execution and
delivery of this Agreement, the due execution, delivery or performance
of the Indenture and the First Mortgage Indenture by the Company or
for the offering, issuance, sale and delivery of the Senior Notes and
the issuance or delivery of the Bonds by the Company to the Trustee as
contemplated in this Agreement; and
(G) such counsel is not handling any litigation relating to the
Company except as set forth in a schedule attached to such opinion.
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(iii) Opinion of Gardner, Carton & Douglas.
(A) such opinion shall cover the matters set forth in
subdivisions (A), (B), (C), (D), (E), (G), (H), (J), (L), (M) and (N)
of paragraph (c)(i) of this Section 5;
(B) the Registration Statement, including any Rule 462(b)
Registration Statement, has become effective under the 1933 Act, the
Prospectus Supplement has been filed pursuant to Rule 424(b) and/or
Rule 434 under the 1933 Act, and, to the best knowledge of said
counsel, no proceedings for a stop order in respect thereof are
pending or threatened under Section 8(d) or 8(e) of the 1933 Act;
(C) the Registration Statement, including any Rule 462(b)
Registration Statement, the Offering Terms and the Prospectus (except
as to the financial statements and financial or statistical data
contained therein, with respect to which said counsel need express no
opinion) comply as to form, in all material respects, with the
requirements of the 1933 Act, the 1934 Act and the 1939 Act and the
rules and regulations of the Commission under such Acts; and the
documents incorporated or deemed to be incorporated by reference in
the Registration Statement and the Prospectus (except as to the
financial statements and financial or statistical data contained
therein, with respect to which said counsel need express no opinion)
as of their respective dates of filing with the Commission complied as
to form in all material respects with the 1934 Act and the 1934 Act
Regulations;
(D) the Indenture and the First Mortgage Indenture have each
been qualified under the 1939 Act as and to the extent required by the
provisions of the 1939 Act; and
(E) all approvals, authorizations, consents, certificates or
orders of any state or federal commission or regulatory authority that
are necessary with respect to the issuance and sale of the Senior
Notes and the issuance of the Bonds by the Company as contemplated in
this Agreement have been obtained.
Such opinion may be subject to the reservation that, in giving
such opinion, said counsel has relied on the opinion of Oklahoma
counsel as to all matters of Oklahoma law and on the opinion of
Arkansas counsel as to all matters of Arkansas law (including without
limiting the foregoing all opinions as to titles of the Company to its
properties, the lien of the First Mortgage Indenture thereon, the
validity and sufficiency of franchises and permits, and the validity
and sufficiency of the orders described in subdivision (K) of
subsection (c)(i) of this Section 5 and subdivision (F) of subsection
(c)(i) of this Section 5), provided that such opinion shall state that
said counsel believes that the Underwriters and they are justified in
relying on the opinions of Oklahoma counsel and of Arkansas counsel.
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(d) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Jones, Day, Reavis & Pogue, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to such matters related to the issuance and sale of the Senior
Notes as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of Illinois and the federal law of the United States, upon the
opinions of Oklahoma counsel, Arkansas counsel or other counsel satisfactory to
the Representatives.
(e) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, results of operations, properties, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business, and the Representatives shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of Closing Time,
to the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in this Agreement are true and correct with the
same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and
(iv) 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 or, to their knowledge, are contemplated by the Commission.
(f) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Representatives shall have received from Arthur Andersen LLP a
letter, dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(g) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives shall
have received from Arthur Andersen LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (f) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(h) MAINTENANCE OF RATING. At Closing Time, the Senior Notes shall be
rated at least A1 by Moody's Investor's Service Inc. and AA- by Standard &
Poor's Ratings Service, Inc. Since the date of this Agreement, there shall not
have occurred a downgrading in the rating assigned to any of the Company's
securities by any "nationally recognized statistical rating organization," as
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<PAGE>
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
1933 Act, and no such organization shall have publicly announced that it has
under surveillance or review its rating of the Senior Notes, the First Mortgage
Bonds or any of the Company's other securities.
(i) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may require
for the purpose of enabling them to pass upon the issuance and sale of the
Senior Notes and issuance and delivery of the Bonds as herein contemplated, or
in order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale of the
Senior Notes and issuance and delivery of the Bonds as herein contemplated shall
be satisfactory in form and substance to the Representatives and counsel for the
Underwriters.
(j) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 7, 8 and 9 shall survive any such termination and remain
in full force and effect.
In giving the opinions contemplated by paragraphs (c) and (d) of this
Section 5, counsel may rely upon certificates of state officials as to the
Company's good standing and upon certificates of officers of the Company as to
matters of fact relevant to such opinions. In giving such opinions, counsel may
assume (i) that the Senior Notes and the Bonds have been executed on behalf of
the Company by the manual or facsimile signatures of the President or a Vice
President and the Secretary or an Assistant Secretary of the Company and have
been manually authenticated by an authorized official of the Trustee and First
Mortgage Trustee, respectively, (ii) that the signatures on all documents
examined by them are genuine, and (iii) that the written information supplied by
the Representatives and the other Underwriters expressly for use in the
Registration Statement or the Prospectus is adequate.
SECTION 6. CONDITIONS OF COMPANY'S OBLIGATIONS
The obligation of the Company to deliver the Senior Notes and the First
Mortgage Bonds upon payment therefor shall be subject to the following
conditions:
At the Closing Time, (a) the orders of the Oklahoma Commission and the
Arkansas Commission referred to in paragraph (xvii) of Section 1(a) hereof shall
be in full force and effect substantially in the form in which originally
entered and (b) no stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for that purpose shall then be
pending before, or threatened by, the Commission.
In case any of the conditions specified above in this Section 6 shall not
have been fulfilled, this Agreement may be terminated by the Company by
delivering written notice of termination to the Representatives. Any such
termination shall be without liability of any party to any other party except to
the extent provided in Section 4 hereof.
20
<PAGE>
SECTION 7. INDEMNIFICATION
(a) INDEMNIFICATION OF UNDERWRITERS. 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 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Offering Terms, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to
Section 7(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Lehman
Brothers), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with the written information furnished to the Company by
any Underwriter through Lehman Brothers expressly for use in the Registration
Statement (or any amendment thereto), including the Offering Terms, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), which information is set forth on Schedule C hereto. The foregoing
indemnity agreement is in addition to any liability which the Company may
otherwise have to any Underwriter or to any controlling person of that
Underwriter.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each Underwriter,
severally and not jointly, agrees to indemnify and hold harmless the Company,
its directors, each of its officers who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
21
<PAGE>
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Offering Terms,
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with the written information
furnished to the Company by such Underwriter through Lehman Brothers expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), which information is set forth on Schedule C hereto. The foregoing
indemnity is in addition to any liability which any Underwriter may otherwise
have to the Company or any such director, officer or controlling person.
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by Lehman Brothers, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; PROVIDED,
HOWEVER, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or
Section 8 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability (including
any obligation to pay any amounts in settlements) arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
22
<PAGE>
SECTION 8. CONTRIBUTION
If the indemnification provided for in Section 7 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Senior Notes pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Senior
Notes pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Senior Notes
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the Senior Notes as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Senior Notes underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
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<PAGE>
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the principal amount of Senior Notes set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company or any of its subsidiaries
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Senior Notes to the Underwriters.
SECTION 10. TERMINATION OF AGREEMENT
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
loss sustained by the Company by strike, fire, flood, accident or other calamity
of such character as to interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have
been insured, or any material adverse change in the condition, financial or
otherwise, or in the earnings, results of operations, properties, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representatives, impracticable to
market the Senior Notes or to enforce contracts for the sale of the Senior
Notes, or (iii) if trading in any securities of the Company has been suspended
or materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal, New York or Oklahoma authorities.
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<PAGE>
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7, 8 and 9 shall survive such termination and remain in full force and
effect.
SECTION 11. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS
If one or more of the Underwriters fails at Closing Time to purchase the
Senior Notes which it or they are obligated to purchase under this Agreement
(the "Defaulted Senior Notes"), the Representatives will have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriter or underwriters, to purchase all, but not
less than all, of the Defaulted Senior Notes in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representatives do
not complete such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Senior Notes does not exceed 10% of
the aggregate principal amount of the Senior Notes to be purchased
hereunder, each of the non-defaulting Underwriters will be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear
to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Senior Notes exceeds 10% of the
aggregate principal amount of the Senior Notes to be purchased hereunder,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section will relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Company will have the right to
postpone Closing Time for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 11.
SECTION 12. NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives at Lehman Brothers Inc., 3 World Financial Center, 16th Floor,
New York, New York 10285-0900, attention of Capital Markets; Bear, Stearns & Co.
Inc., 245 Park Avenue, New York, New York 10167, attention of Capital Markets;
Merrill Lynch & Co., World Financial Center, 9th Floor, 250 Vesey Street, North
Tower, New York, New York 10281-1309, attention of Capital Markets; and Morgan
Stanley Dean Witter, 1585 Broadway, New York, New York 10036, attention of
Capital Markets; each with a copy to Jones, Day, Reavis & Pogue, 77 West Wacker,
Chicago, Illinois 60601, Attention: Robert A. Yolles, Esq. Notices to the
25
<PAGE>
Company shall be directed to it at Oklahoma Gas and Electric Company, 101 North
Robinson, Oklahoma City, Oklahoma, Attention: President, with a copy to
Gardner, Carton & Douglas, Quaker Tower, Suite 3100, 321 North Clark Street,
Chicago, Illinois 60610, Attention: Peter D. Clarke, Esq.
SECTION 13. PARTIES
This Agreement shall each inure to the benefit of and be binding upon the
Underwriters and the Company and their respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Senior Notes from any Underwriter shall be deemed
to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF OKLAHOMA. Except as otherwise set forth herein, specified
times of day refer to New York City time.
SECTION 15. EFFECT OF HEADINGS
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
[Remainder of page intentionally left blank]
26
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
OKLAHOMA GAS AND ELECTRIC COMPANY
By /s/A.M. Strecker
-----------------------------------
Title: Senior Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
BY: LEHMAN BROTHERS INC.
By /s/M. Antonia Paterno Castello
--------------------------------
Title: Managing Director
<PAGE>
SCHEDULE A
Principal Amount of
Name of Underwriter Senior Notes
-------------------------------------------- -------------
Lehman Brothers Inc. . . . . . . . . . . . $31,250,000
Bear, Stearns & Co. Inc. . . . . . . . . . 31,250,000
Merrill Lynch, Pierce, Fenner
& Smith Incorporated . . . . . . . . . . 31,250,000
Morgan Stanley & Co. Incorporated . . . . . 31,250,000
-------------
Total . . . . . . . . . . . . . . . . . . . $125,000,000
-------------
Sch. A-1
<PAGE>
SCHEDULE B
OKLAHOMA GAS AND ELECTRIC COMPANY
$125,000,000 Senior Notes, Series due July 15, 2017
1. The initial public offering price of the Senior Notes is 99.907% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Senior Notes
is 99.186% of the principal amount thereof.
3. The interest rate on the Senior Notes is 6.50% per annum.
4. The Company, at its option, may redeem on any date on or after
August 15, 2004 all or, from time to time, any part of the Senior Notes at a
redemption price equal to the greater of (i) 100% of the principal amount of
such Senior Notes and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon from and after the date
of redemption discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined in the Indenture), plus in each case accrued and unpaid
interest thereon to the date of redemption.
5. The holder of each Senior Note may elect to have such Senior Note, or
any portion thereof which is a multiple of $1,000, repaid on July 15, 2004 at
100% of its principal amount plus accrued and unpaid interest to July 15, 2004.
6. The Oklahoma Real Estate Mortgage Tax is 0.096%.
Sch. B-1
<PAGE>
SCHEDULE C
The information set forth below constitutes the only information furnished
to the Company by any Underwriter expressly for use in the Registration
Statement (or any amendment thereto) or preliminary prospectus or the Prospectus
(or any amendment or supplement thereto):
The names of the Underwriters on the cover page and page S-7 of the
Prospectus Supplement dated July 15, 1997 (the "Prospectus Supplement"), the
information in the first paragraph on page S-2 of the Prospectus Supplement and
the information in the second paragraph, in the second sentence of the fourth
paragraph and in the fifth, sixth and seventh paragraphs on page S-7 of the
Prospectus Supplement.
Sch. C-1
<PAGE>
SUPPLEMENTAL INDENTURE NO. 2
FROM
OKLAHOMA GAS AND ELECTRIC
COMPANY
TO
NATIONSBANK, N.A.
TRUSTEE
------------------
DATED AS OF JULY 1, 1997
SUPPLEMENTAL TO INDENTURE
DATED AS OF OCTOBER 1, 1995
<PAGE>
TABLE OF CONTENTS
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.01 Integral Part of Indenture. . . . . . . . . . . . . . . 2
SECTION 1.02 (a) Definitions. . . . . . . . . . . . . . . . . . . . 2
(b) References to Articles and Sections. . . . . . . . 2
(c) Terms Referring to this Supplemental Indenture . . 2
ARTICLE TWO
6.65% SENIOR NOTES, SERIES DUE JULY 15, 2027
SECTION 2.01 Designation and Principal Amount. . . . . . . . . . . . 2
SECTION 2.02 Stated Maturity Date. . . . . . . . . . . . . . . . . . 2
SECTION 2.03 Interest Payment Dates. . . . . . . . . . . . . . . . . 2
SECTION 2.04 Office for Payment. . . . . . . . . . . . . . . . . . . 2
SECTION 2.05 Redemption Provisions . . . . . . . . . . . . . . . . . 3
SECTION 2.06 Mandatory Repurchase Provisions . . . . . . . . . . . . 4
SECTION 2.07 Authorized Denominations. . . . . . . . . . . . . . . . 4
SECTION 2.08 Related Series of First Mortgage Bonds. . . . . . . . . 4
SECTION 2.09 Form of 6.65% Senior Notes, Series Due
July 15, 2027 . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE THREE
6.50% SENIOR NOTES, SERIES DUE JULY 15, 2017
SECTION 3.01 Designation and Principal Amount. . . . . . . . . . . . 5
SECTION 3.02 Stated Maturity Date. . . . . . . . . . . . . . . . . . 5
SECTION 3.03 Interest Payment Dates. . . . . . . . . . . . . . . . . 5
SECTION 3.04 Office for Payment. . . . . . . . . . . . . . . . . . . 5
SECTION 3.05 Redemption Provisions . . . . . . . . . . . . . . . . . 5
SECTION 3.06 Mandatory Repurchase Provisions . . . . . . . . . . . . 6
SECTION 3.07 Authorized Denominations. . . . . . . . . . . . . . . . 7
SECTION 3.08 Related Series of First Mortgage Bonds. . . . . . . . . 7
SECTION 3.09 Form of 6.50% Senior Notes, Series Due
July 15, 2017 . . . . . . . . . . . . . . . . . . . . . 7
(i)
<PAGE>
ARTICLE FOUR
ADDITIONAL COVENANTS
SECTION 4.01 Limitations on Liens. . . . . . . . . . . . . . . . . . 7
SECTION 4.02 Limitations on Sale and Lease-Back Transactions . . . . 9
SECTION 4.03 Definitions . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE FIVE
AMENDMENT TO INDENTURE
SECTION 5.01 Amendment to Section 13.02(a)(1) of Indenture . . . . . 11
ARTICLE SIX
MISCELLANEOUS
SECTION 6.01 Recitals of fact, except as stated, are statements
of the Company. . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.02 Supplemental Indenture to be construed as a part
of the Indenture. . . . . . . . . . . . . . . . . . . . 11
SECTION 6.03 (a) Trust Indenture Act to control . . . . . . . . . . 11
(b) Severability of provisions contained in
Supplemental Indenture and Notes . . . . . . . . . 12
SECTION 6.04 References to either party in Supplemental Indenture
include successors or assigns . . . . . . . . . . . . . 12
SECTION 6.05 (a) Provision for execution in counterparts. . . . . . 12
(b) Table of Contents and descriptive headings
of Articles not to affect meaning. . . . . . . . . 12
(ii)
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SUPPLEMENTAL INDENTURE No. 2, made as of the 1st day of July, 1997, by and
between OKLAHOMA GAS AND ELECTRIC COMPANY, a corporation duly organized and
existing under the laws of the State of Oklahoma (the "Company"), and
NationsBank, N.A., a national banking association duly organized and existing
under the laws of the United States of America, as trustee (the "Trustee"):
WITNESSETH:
WHEREAS, the Company has heretofore executed and delivered its Indenture
(hereinafter referred to as the "Indenture"), made as of October 1, 1995; and
WHEREAS, the Company has heretofore executed and delivered its Supplemental
Indenture No. 1 dated as of October 16, 1995, adding to the covenants,
conditions and agreements of the Indenture certain additional covenants,
conditions and agreements to be observed by the Company, and creating two series
of Notes designated "7.30% Senior Notes, Series due October 15, 2025" and
"6.250% Senior Notes, Series due October 15, 2000"; and
WHEREAS, Section 2.05 of the Indenture provides that Notes shall be issued
in series and that a Company Order shall specify the terms of each series; and
WHEREAS, Boatmen's First National Bank of Oklahoma was formerly the Trustee
under the Indenture and NationsBank, N.A. has succeeded Boatmen's First National
Bank of Oklahoma as Trustee pursuant to Section 9.13 of the Indenture; and
WHEREAS, the Company has this day delivered a Company Order setting forth
the terms of two series of Notes designated "6.65% Senior Notes, Series due July
15, 2027" (hereinafter sometimes referred to as the "Senior Notes due 2027") and
"6.50% Senior Notes, Series due July 15, 2017" (hereinafter sometimes referred
to as the "Senior Notes due 2017"); and
WHEREAS, Section 13.01 of the Indenture provides that the Company and the
Trustee may enter into indentures supplemental thereto for the purposes, among
others, of establishing the form of Notes or establishing or reflecting any
terms of any Note and adding to the covenants of the Company; and
WHEREAS, the execution and delivery of this Supplemental Indenture No. 2
(herein, "this Supplemental Indenture") have been duly authorized by a
resolution adopted by the Board of Directors of the Company;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to set forth the terms and conditions upon which the
Senior Notes due 2027 and Senior Notes due 2017 are, and are to be,
authenticated, issued and delivered, and in consideration of the premises of
the purchase and acceptance of the Senior Notes due 2027 and Senior Notes due
2017 by the Holders hereof and the sum of one dollar duly paid to it by the
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Trustee at the execution of this Supplemental Indenture, the receipt whereof
is hereby acknowledged, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of the respective Holders from time to
time of the Senior Notes due 2027 and Senior Notes due 2017, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.01 This Supplemental Indenture constitutes an integral part
of the Indenture.
SECTION 1.02 For all purposes of this Supplemental Indenture:
(a) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(b) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture; and
(c) The terms "hereof," "herein," "hereby," "hereto," "hereunder" and
"herewith" refer to this Supplemental Indenture.
ARTICLE TWO
6.65% SENIOR NOTES, SERIES DUE JULY 15, 2027
SECTION 2.01 There shall be a series of Notes designated the "6.65%
Senior Notes, Series due 2027" (the "Senior Notes due 2027"). The Senior Notes
due 2027 shall be limited to $125,000,000 aggregate principal amount.
SECTION 2.02 Except as otherwise provided in Section 2.05 or Section 2.06
hereof, the principal amount of the Senior Notes due 2027 shall be payable on
the stated maturity date of July 15, 2027.
SECTION 2.03 The Senior Notes due 2027 shall be dated their date of
authentication as provided in the Indenture and shall bear interest at the rate
of 6.65% per annum, payable semi-annually on January 15 and July 15 of each
year, commencing January 15, 1998. The Regular Record Dates with respect to
such January 15 and July 15 interest payment dates shall be December 31 and June
30, respectively. Principal and interest shall be payable to the persons and in
the manner provided in Sections 2.04 and 2.12 of the Indenture.
SECTION 2.04 The Senior Notes due 2027 shall be payable at the corporate
trust office of the Trustee and at the offices of such paying agents as the
Company may appoint by Company Order in the future.
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SECTION 2.05 The Company, at its option, may redeem on any date on or
after August 15, 2007, all or, from time to time, any part of the Senior Notes
due 2027, upon notice as provided in the Indenture, at a redemption price equal
to the greater of (i) 100% of the principal amount of such Senior Notes due 2027
to be redeemed and (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon from and after the date of redemption
discounted to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate, plus in each case
accrued and unpaid interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Senior Notes due 2027 to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Senior Notes due 2027. "Independent
Investment Banker" means one of the Reference Treasury Dealers appointed by the
Senior Note Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such third business day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Senior Note Trustee is unable to obtain at least four
such Reference Treasury Dealer Quotations, the average of all such Quotations
obtained. "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Senior Note Trustee, of the bid and asked prices of the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Senior Note Trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third business day preceding such redemption
date.
"Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Bear, Stearns & Co. Inc., Lehman Brothers Inc. and
Morgan Stanley & Co. Incorporated, and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"),
the Company shall substitute therefor another Primary Treasury Dealer.
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The Senior Notes due 2027 shall not be subject to any sinking fund.
SECTION 2.06 The Senior Notes due 2027 will be repayable on July 15,
2007, at the option of the holders thereof, at 100% of their principal
amount, together with accrued and unpaid interest to July 15, 2007. In order
for a Senior Note due 2027 to be repaid, the Company must receive at the
corporate trust office of the Trustee during the period from and including
May 15, 2007 to and including the close of business on June 15, 2007 (or if
June 15, 2007 is not a Business Day, the next succeeding Business Day): (i) a
Senior Note due 2027 with the form entitled "Option to Elect Repayment" on
the Senior Note due 2027 duly completed, or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a
trust company in the United States of America setting forth the name of the
Holder of the Senior Note due 2027, the principal amount of the Senior Note
due 2027, the principal amount of the Senior Note due 2027 to be repaid, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Senior Note due 2027 to be repaid (with the form entitled
"Option to Elect Repayment" on the Senior Note due 2027 duly completed) will
be received at the Trustee's corporate trust office, no later than five
Business Days after the date of such telegram, telex, facsimile transmission
or letter and such Note and form duly completed are received at the Trustee's
office, by such fifth Business Day. Effective exercise of the repayment
option by the holder of any Senior Note due 2027 shall be irrevocable. No
transfer or exchange of any Senior Note due 2027 (or, in the event that any
Senior Note due 2027 is to be repaid in part, such portion of the Senior Note
due 2027 to be repaid) will be permitted after exercise of the repayment
option. The repayment option may be exercised by the Holder of a Senior Note
due 2027 for less than the entire principal amount of the Senior Note due
2027, provided the principal amount which is to be repaid is set forth on the
form entitled "Option to Elect Repayment" on the Senior Note due 2027 and is
equal to $1,000 or any integral multiple thereof. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any
Senior Note due 2027 for repayment will be determined by the Company, whose
determination will be final, binding and non-appealable. Upon timely
delivery of a Senior Note due 2027 to the Trustee with the "Option to Elect
Repayment" form completed in accordance with the foregoing, the outstanding
principal amount of such Senior Note due 2027 (or portion thereof indicated
on the "Option to Elect Repayment") shall become due and payable on July 15,
2007, at a price equal to 100% of the principal amount to be repaid plus
accrued and unpaid interest to July 15, 2007.
SECTION 2.07 The Senior Notes due 2027 shall be issued in fully
registered form without coupons in denominations of $1,000 and integral
multiples thereof.
SECTION 2.08 The related series of Senior Note First Mortgage Bonds for
the Senior Notes due 2027 is the Company's First Mortgage Bonds, Senior Note
Series C.
SECTION 2.09 The Senior Notes due 2027 shall initially be in the form
attached as Exhibit A hereto.
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ARTICLE THREE
6.50% SENIOR NOTES, SERIES DUE JULY 15, 2017
SECTION 3.01 There shall be a series of Notes designated the "6.50%
Senior Notes, Series due 2017" (the "Senior Notes due 2017"). The Senior Notes
due 2017 shall be limited to $125,000,000 aggregate principal amount.
SECTION 3.02 Except as otherwise provided in Section 3.05 or Section 3.06
hereof, the principal amount of the Senior Notes due 2017 shall be payable on
the stated maturity date of July 15, 2017.
SECTION 3.03 The Senior Notes due 2017 shall be dated their date of
authentication as provided in the Indenture and shall bear interest at the rate
of 6.50% per annum, payable semi-annually on January 15 and July 15 of each
year, commencing January 15, 1998. The Regular Record Dates with respect to
such January 15 and July 15 interest payment dates shall be December 31 and June
30, respectively. Principal and interest shall be payable to the persons and in
the manner provided in Sections 2.04 and 2.12 of the Indenture.
SECTION 3.04 The Senior Notes due 2017 shall be payable at the corporate
trust office of the Trustee and at the offices of such paying agents as the
Company may appoint by Company Order in the future.
SECTION 3.05 The Company, at its option, may redeem on any date on or
after August 15, 2004, all or, from time to time, any part of the Senior Notes
due 2017, upon notice as provided in the Indenture, at a redemption price equal
to the greater of (i) 100% of the principal amount of such Senior Notes due 2017
to be redeemed and (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon from and after the date of redemption
discounted to the redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate, plus in each case
accrued and unpaid interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Senior Notes due 2017 to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Senior Notes due 2017. "Independent
Investment Banker" means one of the Reference Treasury Dealers appointed by the
Senior Note Trustee after consultation with the Company.
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"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such third business day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Senior Note Trustee is unable to obtain at least four
such Reference Treasury Dealer Quotations, the average of all such Quotations
obtained. "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Senior Note Trustee, of the bid and asked prices of the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Senior Note Trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third business day preceding such redemption
date.
"Reference Treasury Dealer means each of Lehman Brothers Inc., Bear,
Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Morgan Stanley & Co. Incorporated, and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
The Senior Notes due 2017 shall not be subject to any sinking fund.
SECTION 3.06 The Senior Notes due 2017 will be repayable on July 15,
2004, at the option of the holders thereof, at 100% of their principal amount,
together with accrued and unpaid interest to July 15, 2004. In order for a
Senior Note due 2017 to be repaid, the Company must receive at the corporate
trust office of the Trustee during the period from and including May 15, 2004 to
and including the close of business on June 15, 2004 (or if June 15, 2004 is not
a Business Day, the next succeeding Business Day): (i) a Senior Note due 2017
with the form entitled "Option to Elect Repayment" on the Senior Note due 2017
duly completed, or (ii) a telegram, telex, facsimile transmission or letter from
a member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth the name of the Holder of the Senior Note due
2017, the principal amount of the Senior Note due 2017, the principal amount of
the Senior Note due 2017 to be repaid, a statement that the option to elect
repayment is being exercised thereby and a guarantee that the Senior Note due
2017 to be repaid (with the form entitled "Option to Elect Repayment" on the
Senior Note due 2017 duly completed) will be received at the Trustee's corporate
trust office, no later than five Business Days after the date of such telegram,
telex, facsimile transmission or letter and such Note and form duly completed
are received at the Trustee's office, by such fifth Business Day. Effective
exercise of the repayment option by the Holder of any Senior Note due 2017 shall
be irrevocable. No transfer or exchange of any Senior Note due 2017 (or, in the
event that any Senior Note due 2017 is to be repaid in part, such
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portion of the Senior Note due 2017 to be repaid) will be permitted after
exercise of the repayment option. The repayment option may be exercised by
the Holder of a Senior Note due 2017 for less than the entire principal
amount of the Senior Note due 2017, provided the principal amount which is to
be repaid is set forth on the form entitled "Option to Elect Repayment" on
the Senior Note due 2017 and is equal to $1,000 or any integral multiple
thereof. All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Senior Note due 2017 for repayment will be
determined by the Company, whose determination will be final, binding and
non-appealable. Upon timely delivery of a Senior Note due 2017 to the
Trustee with the "Option to Elect Repayment" form completed in accordance
with the foregoing, the outstanding principal amount of such Senior Note due
2017 (or portion thereof indicated on the "Option to Elect Repayment") shall
become due and payable on July 15, 2004, at a price equal to 100% of the
principal amount to be repaid plus accrued and unpaid interest to July 15,
2004.
SECTION 3.07 The Senior Notes due 2017 shall be issued in fully
registered form without coupons in denominations of $1,000 and integral
multiples thereof.
SECTION 3.08 The related series of Senior Note First Mortgage Bonds for
the Senior Notes due 2017 is the Company's First Mortgage Bonds, Senior Note
Series D.
SECTION 3.09 The Senior Notes due 2017 shall initially be in the form
attached as Exhibit B hereto.
ARTICLE FOUR
ADDITIONAL COVENANTS
SECTION 4.01
(a) From and after the Release Date and so long as any Senior Notes due
2027 or Senior Notes due 2017 are outstanding, the Company will not issue,
assume or guarantee any Debt secured by any mortgage, security interest, pledge
or lien (herein referred to as a "mortgage") of or upon any Operating Property
of the Company, whether owned at the date of the Indenture or thereafter
acquired, and will not permit to exist any Debt secured by a mortgage on any
Operating Property created on or prior to the Release Date, without in any such
case effectively securing, on the later to occur of the issuance, assumption or
guaranty of any such Debt or the Release Date, the outstanding Senior Notes due
2027 and Senior Notes due 2017 (together with, if the Company shall so
determine, any other Notes or indebtedness or obligation of or guaranteed by the
Company ranking senior to, or equally with, the Notes and then existing or
thereafter created) equally and ratably with such Debt; provided, however, that
the foregoing restriction shall not apply to Debt secured by any of the
following:
(1) mortgages on any property existing at the time of acquisition thereof;
(2) mortgages on property of a corporation existing at the time such
corporation is merged into or consolidated with the Company, or at the time of a
sale, lease or other disposition
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of the properties of such corporation or a division thereof as an entirety or
substantially as an entirety to the Company, provided that such mortgage as a
result of such merger, consolidation, sale, lease or other disposition is not
extended to property owned by the Company immediately prior thereto;
(3) mortgages on property to secure all or part of the cost of acquiring,
substantially repairing or altering, constructing, developing or substantially
improving such property, or to secure indebtedness incurred to provide funds for
any such purpose or for reimbursement of funds previously expended for any such
purpose, provided such mortgages are created or assumed contemporaneously with,
or within 18 months after, such acquisition or completion of substantial repair
or alteration, construction, development or substantial improvement or within
six months thereafter pursuant to a commitment for financing arranged with a
lender or investor within such 18 month period;
(4) mortgages in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political subdivision
of the United States of America or any state thereof, or for the benefit of
holders of securities issued by any such entity, to secure any Debt incurred for
the purpose of financing all or any part of the purchase price or the cost of
substantially repairing or altering, constructing, developing or substantially
improving the property subject to such mortgages; or
(5) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any mortgage referred to in
the foregoing clauses (1) to (4), inclusive; provided, however, that the
principal amount of indebtedness secured thereby and not otherwise authorized by
said clauses (1) to (4), inclusive, shall not exceed the principal amount of
indebtedness, plus any premium or fee payable in connection with any such
extension, renewal or replacement, so secured at the time of such extension,
renewal or replacement.
(b) Notwithstanding the provisions of Section 4.01(a), from and after the
Release Date and so long as any Senior Notes due 2027 or Senior Notes due 2017
are outstanding, the Company may issue, assume or guarantee Debt, or permit to
exist Debt, secured by mortgages which would otherwise be subject to the
restrictions of Section 4.01(a) up to an aggregate principal amount that,
together with the principal amount of all other Debt of the Company secured by
mortgages (other than mortgages permitted by Section 4.01(a) that would
otherwise be subject to the foregoing restrictions) and the Value of all Sale
and Lease-Back Transactions in existence at such time (other than any Sale and
Lease-Back Transaction that, if such Sale and Lease-Back Transaction had been a
mortgage, would have been permitted by Section 4.01(a), other than Sale and
Lease-Back Transactions permitted by Section 4.02 because the commitment by or
on behalf of the purchaser was obtained no later than 18 months after the later
of events described in clause (i) or (ii) of Section 4.02, and other than Sale
and Lease-Back Transactions as to which application of amounts have been made in
accordance with clause (z) of Section 4.02), does not at the time exceed the
greater of 10% of Net Tangible Assets or 10% of Capitalization.
(c) If at any time the Company shall issue, assume or guarantee any Debt
secured by any mortgage and if Section 4.01(a) requires that the outstanding
Senior Notes due 2027 or
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outstanding Senior Notes due 2017 be secured equally and ratably with such
Debt, the Company will promptly execute, at its expense, any instruments
necessary to so equally and ratably secure such series of Notes and deliver
the same to the Trustee along with:
(1) An Officers' Certificate stating that the covenant of the
Company contained in Section 4.01(a) has been complied with;
and
(2) An Opinion of Counsel to the effect that such covenant has
been complied with, and that any instruments executed by the
Company in the performance of such covenant comply with the
requirements of such covenant.
In the event that the Company shall hereafter secure outstanding Senior
Notes due 2027 or outstanding Senior Notes due 2017 equally and ratably with any
other obligation or indebtedness (including other Notes) pursuant to the
provisions of this Section 4.01, the Trustee is hereby authorized to enter into
an indenture or agreement supplemental hereto and to take such action, if any,
as it may deem advisable to enable it to enforce effectively the rights of the
holders of such series of Notes so secured, equally and ratably with such other
obligation and indebtedness.
SECTION 4.02. From and after the Release Date and so long as any Senior
Notes due 2027 or Senior Notes due 2017 are outstanding, the Company will not
enter into any Sale and Lease-Back Transaction with respect to any Operating
Property and will not permit to remain in effect any Sale and Lease-Back
Transaction entered into on or prior to the Release Date with respect to any
Operating Property if, in any case, the commitment by or on behalf of the
purchaser is obtained more than 18 months after the later of (i) the completion
of the acquisition, substantial repair or alteration, construction, development
or substantial improvement of such Operating Property or (ii) the placing in
operation of such Operating Property or of such Operating Property as so
substantially repaired or altered, constructed, developed or substantially
improved, unless (x) the Company would be entitled pursuant to Section 4.01(a)
to issue, assume or guarantee Debt secured by a mortgage on such Operating
Property without equally and ratably securing the Notes of this Series or
(y) the Company would be entitled pursuant to Section 4.01(b), after giving
effect to such Sale and Lease-Back Transaction, to incur $1.00 of additional
Debt secured by mortgages (other than mortgages permitted by Section 4.01(a))
or (z) the Company shall apply or cause to be applied, in the case of a sale or
transfer for cash, an amount equal to the net proceeds thereof (but not in
excess of the net book value of such Operating Property at the date of such sale
or transfer) and, in the case of a sale or transfer otherwise than for cash, an
amount equal to the fair value (as determined by the Board of Directors) of the
Operating Property so leased, to the retirement, within 180 days after the later
to occur of the effective date of such Sale and Lease-Back Transaction or the
Release Date, of Notes or other Debt of the Company ranking senior to, or
equally with, the Notes; provided, however, that any such retirement of Notes
shall be in accordance with the terms and provisions of the Indenture and the
Notes and provided, further, that the amount to be applied to such retirement of
Notes or other Debt shall be reduced by an amount equal to the sum of (a) an
amount equal to the redemption price with respect to Notes delivered within such
180-day period
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to the Trustee for retirement and cancellation and (b) the principal amount,
plus any premium or fee paid in connection with any redemption in accordance
with the terms of other Debt voluntarily retired by the Company within such
180-day period, excluding in each case retirements pursuant to mandatory
sinking fund or prepayment provisions and payments at maturity.
SECTION 4.03. Definitions
For purposes of Section 4.01 and Section 4.02, the following terms shall
have the following meanings:
CAPITALIZATION: The term "Capitalization" shall mean the total of all the
following items appearing on, or included in, the balance sheet of the Company:
(1) liabilities for indebtedness maturing more than 12 months from
the date of determination; and
(2) common stock, preferred stock, capital surplus, premium on
capital stock, capital in excess of par value and retained
earnings (however the foregoing may be designated), less to the
extent not otherwise deducted, the cost of shares of capital
stock of the Company held in its treasury.
Capitalization shall be determined in accordance with generally accepted
accounting principles and practices applicable to the type of business in which
the Company is engaged and that are approved by independent accountants
regularly retained by the Company, and may be determined as of a date not more
than 60 days prior to the happening of an event for which such determination is
being made.
DEBT: The term "Debt" shall mean any outstanding debt for money borrowed.
NET TANGIBLE ASSETS: The term "Net Tangible Assets" shall mean the amount
shown as total assets on the balance sheet of the Company, less the following:
(1) intangible assets including, but without limitation, such items
as goodwill, trademarks, trade names, patents and unamortized
debt discount and expense carried as an asset on said balance
sheet; and
(2) appropriate adjustments, if any, on account of minority
interests.
Net Tangible Assets shall be determined in accordance with generally
accepted accounting principles and practices applicable to the type of business
in which the Company is engaged and that are approved by the independent
accountants regularly retained by the Company, and may be determined as of a
date not more than 60 days prior to the happening of the event for which such
determination is being made.
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OPERATING PROPERTY: The term "Operating Property" shall mean (i) any
interest in real property owned by the Company and (ii) any asset owned by the
Company that is depreciable in accordance with generally accepted accounting
principles.
SALE AND LEASE-BACK TRANSACTION: The term "Sale and Lease-Back
Transaction" shall mean any arrangement with any person providing for the
leasing to the Company of any Operating Property (except for temporary leases
for a term, including any renewal thereof, of not more than 48 months), which
Operating Property has been or is to be sold or transferred by the Company to
such person.
VALUE: The term "Value" shall mean, with respect to a Sale and Lease-Back
Transaction, as of any particular time, the amount equal to the greater of (1)
the net proceeds to the Company from the sale or transfer of the property leased
pursuant to such Sale and Lease-Back Transaction or (2) the net book value of
such property, as determined in accordance with generally accepted accounting
principles by the Company at the time of entering into such Sale and Lease-Back
Transaction, in either case multiplied by a fraction, the numerator of which
shall be equal to the number of full years of the term of the lease that is part
of such Sale and Lease-Back Transaction remaining at the time of determination
and the denominator of which shall be equal to the number of full years of such
term, without regard, in any case, to any renewal or extension options contained
in such lease.
ARTICLE FIVE
AMENDMENT TO INDENTURE
SECTION 5.01 Pursuant to the provisions of Section 13.01 of the
Indenture, Section 13.02(a)(1) of the Indenture is hereby amended by adding
thereto the phrase "or repaid at the option of the holder thereof" immediately
following the phrase "or change the date on which any Note may be redeemed".
ARTICLE SIX
MISCELLANEOUS
SECTION 6.01 The recitals of fact herein and in the Senior Notes due 2027
and in the Senior Notes due 2017 (except the Trustee's Certificate) shall be
taken as statements of the Company and shall not be construed as made by the
Trustee.
SECTION 6.02 This Supplemental Indenture shall be construed in connection
with and as a part of the Indenture.
SECTION 6.03
(a) If any provision of this Supplemental Indenture limits, qualifies, or
conflicts with another provision of the Indenture required to be included in
indentures qualified under the Trust Indenture Act of 1939 (as enacted prior to
the date of this Supplemental Indenture) by any of the provisions of
Sections 310 to 317, inclusive, of said Act, such required provisions shall
control.
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<PAGE>
(b) In case any one or more of the provisions contained in this
Supplemental Indenture or in the notes issued hereunder should be invalid,
illegal, or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected, impaired, prejudiced or disturbed thereby.
SECTION 6.04 Whenever in this Supplemental Indenture either of the
parties hereto is named or referred to, this shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements in
this Supplemental Indenture contained by or on behalf of the Company or by or on
behalf of the Trustee shall bind and inure to the benefit of the respective
successors and assigns of such parties, whether so expressed or not.
SECTION 6.05
(a) This Supplemental Indenture may be simultaneously executed in several
counterparts, and all said counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.
(b) The Table of Contents and the descriptive headings of the several
Articles of this Supplemental Indenture were formulated, used and inserted in
this Supplemental Indenture for convenience only and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
12
<PAGE>
IN WITNESS WHEREOF, OKLAHOMA GAS AND ELECTRIC COMPANY has caused this
Supplemental Indenture to be signed by its President or a Vice President, and
attested by its Secretary or an Assistant Secretary and NATIONSBANK, N.A., has
caused this Supplemental Indenture to be signed by its President or a Vice
President, and attested by a Vice President, this 16th day of July 1997.
OKLAHOMA GAS AND ELECTRIC COMPANY
By: Steven E. Moore, President
ATTEST:
Irma B. Elliott, SECRETARY.
NATIONSBANK, N.A., as Trustee
By: Sue Shipman, Vice President
ATTEST:
Karyn Wilson, VICE PRESIDENT.
13
<PAGE>
EXHIBIT A
FORM OF 6.65% SENIOR NOTE, SERIES
DUE JULY 15, 2027
REGISTERED REGISTERED
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE DEPOSITARY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL
NOTE MAY NOT BE TRANSFERRED EXCEPT 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 BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), TO THE TRUSTEE FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE 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 IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
OKLAHOMA GAS AND ELECTRIC COMPANY
6.65% SENIOR NOTE, SERIES DUE JULY 15, 2027
CUSIP: 678858AZ4 NUMBER: R-1
ORIGINAL ISSUE DATE(S): PRINCIPAL AMOUNT(S): $125,000,000
JULY 21, 1997
INTEREST RATE: 6.65% MATURITY DATE: JULY 15, 2027
OKLAHOMA GAS AND ELECTRIC COMPANY, a corporation of the State of Oklahoma
(the "COMPANY"), for value received hereby promises to pay to ____________ or
registered assigns, the principal sum of
ONE HUNDRED TWENTY FIVE MILLION DOLLARS
on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date (or if this Global Note has two or more Original Issue
Dates, interest shall, beginning on each such Original Issue Date, begin to
accrue for that part of the principal amount to which that Original Issue Date
is applicable) set forth above or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually in arrears on
January 15 and July 15 in each year, commencing on the first such Interest
Payment Date succeeding the applicable Original Issue Date set forth above, at
the per annum Interest Rate set forth above, until the principal hereof is paid
or made available for payment. No interest shall accrue on the Maturity Date,
so long as the principal amount of this Global Note is paid on the Maturity
Date. The interest so payable and punctually paid or duly provided for on any
such Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note is
<PAGE>
registered at the close of business on the Regular Record Date for such
interest, which shall be the December 31 or the June 30, as the case may be,
next preceding such Interest Payment Date; provided that the first Interest
Payment Date for any part of this Note, the Original Issue Date of which is
after a Regular Record Date but prior to the applicable Interest Payment
Date, shall be the Interest Payment Date following the next succeeding
Regular Record Date; and provided that interest payable on the Maturity Date
set forth above or, if applicable, upon redemption, repayment or
acceleration, shall be payable to the Person to whom principal shall be
payable. Except as otherwise provided in the Indenture (as defined below),
any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date and shall be
paid to the Person in whose name this Note is registered at the close of
business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Noteholders not
more than fifteen days or fewer than ten days prior to such Special Record
Date. On or before 10:00 a.m., New York City time, or such other time as
shall be agreed upon between the Trustee and the Depositary, of the day on
which such payment of interest is due on this Global Note (other than
maturity), the Trustee shall pay to the Depositary such interest in same day
funds. On or before 10:00 a.m., New York City time, or such other time as
shall be agreed upon between the Trustee and the Depositary, of the day on
which principal, interest payable at maturity and premium, if any, is due on
this Global Note, the Trustee shall deposit with the Depositary the amount
equal to the principal, interest payable at maturity and premium, if any, by
wire transfer into the account specified by the Depositary. As a condition
to the payment, on the Maturity Date or upon redemption, repayment or
acceleration, of any part of the principal and applicable premium of this
Global Note, the Depositary shall surrender, or cause to be surrendered, this
Global Note to the Trustee, whereupon a new Global Note shall be issued to
the Depositary.
This Global Note is a global security in respect of a duly authorized issue
of 6.65% Senior Notes, Series due July 15, 2027 (the "NOTES OF THIS SERIES",
which term includes any Global Notes representing such Notes) of the Company
issued and to be issued under an Indenture dated as of October 1, 1995 between
the Company and NationsBank, N.A., as successor trustee (the "TRUSTEE", which
term includes any subsequent successor Trustee under the Indenture) to Boatmen's
First National Bank of Oklahoma, and indentures supplemental thereto
(collectively, the "INDENTURE"). Under the Indenture, one or more series of
notes may be issued and, as used herein, the term "Notes" refers to the Notes of
this Series and any other outstanding series of Notes. Reference is hereby made
for a more complete statement of the respective rights, limitations of rights,
duties and immunities under the Indenture of the Company, the Trustee and the
Noteholders and of the terms upon which the Notes are and are to be
authenticated and delivered. This Global Note has been issued in respect of the
series designated on the first page hereof, limited in aggregate principal
amount to $125,000,000.
Prior to the Release Date (as hereinafter defined), the Notes will be
secured by first mortgage bonds (the "SENIOR NOTE FIRST MORTGAGE BONDS")
delivered by the Company to the Trustee for the benefit of the Holders of the
Notes, issued under the Trust Indenture, dated as of February 1, 1945, from the
Company to NationsBank, N.A., as successor trustee to The First National Bank
and Trust Company of Oklahoma City and to Boatmen's First National Bank of
Oklahoma (the "MORTGAGE TRUSTEE"), as supplemented and modified (collectively,
the "FIRST MORTGAGE"). Reference is made to the First Mortgage and the
Indenture for a description of the rights of the Trustee as holder of the Senior
Note First Mortgage Bonds, the property mortgaged and pledged, under the First
Mortgage and the rights of the Company and of the Mortgage Trustee in respect
thereof, the duties and immunities of the Mortgage Trustee and the terms and
conditions upon which the Senior Note First Mortgage Bonds are secured and the
circumstances under which additional first mortgage bonds may be issued.
FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN SENIOR
NOTE FIRST MORTGAGE BONDS) ISSUED UNDER THE FIRST MORTGAGE HAVE BEEN RETIRED
THROUGH PAYMENT, REDEMPTION
-2-
<PAGE>
OR OTHERWISE (INCLUDING THOSE FIRST MORTGAGE BONDS "DEEMED TO BE PAID" WITHIN
THE MEANING OF THAT TERM AS USED IN ARTICLE X OF THE FIRST MORTGAGE) AT,
BEFORE OR AFTER THE MATURITY THEREOF (THE "RELEASE DATE"), THE SENIOR NOTE
FIRST MORTGAGE BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER. IN
CERTAIN CIRCUMSTANCES PRIOR TO THE RELEASE DATE AS PROVIDED IN THE INDENTURE,
THE COMPANY IS PERMITTED TO REDUCE THE AGGREGATE PRINCIPAL AMOUNT OF A SERIES
OF SENIOR NOTE FIRST MORTGAGE BONDS HELD BY THE TRUSTEE, BUT IN NO EVENT
PRIOR TO THE RELEASE DATE TO AN AMOUNT LESS THAN THE AGGREGATE OUTSTANDING
PRINCIPAL AMOUNT OF THE SERIES OF NOTES INITIALLY ISSUED CONTEMPORANEOUSLY
WITH SUCH SENIOR NOTE FIRST MORTGAGE BONDS.
Each Note of this Series shall be dated and issued as of the date of its
authentication by the Trustee and shall bear an Original Issue Date or Dates.
Each Note or Global Note issued upon transfer, exchange or substitution of such
Note or Global Note shall bear the Original Issue Date or Dates of such
transferred, exchanged or substituted Note or Global Note, as the case may be.
The Company, at its option, may redeem on any date on or after August 15,
2007, all or, from time to time, any part of this Global Note at a redemption
price equal to the greater of (i) 100% of the principal amount of this Global
Note to be redeemed and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate, plus in each case accrued and unpaid
interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes of this Series to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of Notes of this Series. "Independent Investment
Banker" means one of the Reference Treasury Dealers appointed by the Senior Note
Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such third business day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Senior Note Trustee is unable to obtain at least four
such Reference Treasury Dealer Quotations, the average of all such Quotations
obtained. "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Senior Note Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Senior Note Trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third business day preceding such redemption
date.
"Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Bear, Stearns & Co. Inc., Lehman Brothers Inc. and Morgan
Stanley & Co. Incorporated,
-3-
<PAGE>
and their respective successors; provided, however, that if any of the
foregoing shall cease to be a primary U.S. Government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer.
Notice of redemption will be given by mail to Holders of Notes of this
Series not less than 30 or more than 60 days prior to the date fixed for
redemption, all as provided in the Indenture. In the event of redemption of
this Global Note in part only, a new Global Note or Notes of like tenor and
series for the unredeemed portion hereof will be issued in the name of the
Noteholder hereof upon the surrender hereof.
The Notes of this Series will be repayable on July 15, 2007, at the option
of the Holders thereof, at 100% of their principal amount, together with accrued
and unpaid interest to July 15, 2007. In order for this Global Note to be
repaid, the Company must receive at the corporate trust office of the Trustee
during the period from and including May 15, 2007 to and including the close of
business on June 15, 2007 (or if June 15, 2007 is not a Business Day, the next
succeeding Business Day): (i) this Global Note with the form entitled "Option to
Elect Repayment" on this Global Note duly completed, or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank or
a trust company in the United States of America setting forth the name of the
Holder of this Global Note, the principal amount of this Global Note, the
principal amount of this Global Note to be repaid, a statement that the option
to elect repayment is being exercised thereby and a guarantee that this Global
Note (with the form entitled "Option to Elect Repayment" on this Global Note
duly completed) will be received at the Trustee's corporate trust office, no
later than five Business Days after the date of such telegram, telex, facsimile
transmission or letter and this Global Note and form duly completed are received
at the Trustee's office, by such fifth Business Day. Effective exercise of the
repayment option by the Holder of any Note of this Series shall be irrevocable.
No transfer or exchange of any Note of this Series (or, in the event that any
Note of this Series is to be repaid in part, such portion of the Note of this
Series to be repaid) will be permitted after exercise of the repayment option.
The repayment option may be exercised by the Holder of a Note of this Series for
less than the entire principal amount of the Note of this Series, provided the
principal amount which is to be repaid is set forth on the form entitled "Option
to Elect Repayment" on the Note of this Series and is equal to $1,000 or any
integral multiple thereof. All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Note of this Series for
repayment will be determined by the Company, whose determination will be final,
binding and non-appealable. Upon timely delivery of a Note of this Series to
the Trustee with the "Option to Elect Repayment" form completed in accordance
with the foregoing, the outstanding principal amount of such Note of this Series
(or portion thereof indicated on the "Option to Elect Repayment") shall become
due and payable on July 15, 2007, at a price equal to 100% of the principal
amount to be repaid plus accrued and unpaid interest to July 15, 2007.
Interest payments for this Global Note shall be computed and paid on the
basis of a 360-day year of twelve 30-day months. If any Interest Payment Date
or date on which the principal of this Global Note is required to be paid is not
a Business Day, then payment of principal, premium or interest need not be made
on such date but may be made on the next succeeding Business Day with the same
force and effect as if made on such Interest Payment Date or date on which the
principal of this Global Note is required to be paid and, in the case of timely
payment thereof, no interest shall accrue for the period from and after such
Interest Payment Date or the date on which the principal of this Global Note is
required to be paid.
The Company, at its option, and subject to the terms and conditions
provided in the Indenture, will be discharged from any and all obligations in
respect of the Notes (except for certain obligations
-4-
<PAGE>
including obligations to register the transfer or exchange of Notes, replace
stolen, lost or mutilated Notes, maintain paying agencies and hold monies for
payment in trust, all as set forth in the Indenture) if the Company deposits
with the Trustee money, U.S. Government Obligations which through the payment
of interest thereon and principal thereof in accordance with their terms will
provide money, or a combination of money and U.S. Government Obligations, in
any event in an amount sufficient, without reinvestment, to pay all the
principal of and any premium and interest on the Notes on the dates such
payments are due in accordance with the terms of the Notes.
If an Event of Default shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect provided
in the Indenture and, upon such declaration, the Trustee can demand the
redemption of the Senior Note First Mortgage Bonds as provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Noteholders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the outstanding Notes. Any such consent or
waiver by the Holder of this Global Note shall be conclusive and binding upon
such Holder and upon all future Holders of this Global Note and of any Note
issued upon the registration of transfer hereof or in exchange therefor or in
lieu thereof whether or not notation of such consent or waiver is made upon the
Note.
As set forth in and subject to the provisions of the Indenture, no Holder
of any Notes will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless such Holder shall have previously
given to the Trustee written notice of a continuing Event of Default with
respect to such Notes, the Holders of not less than a majority in principal
amount of the outstanding Notes affected by such Event of Default shall have
made written request and offered reasonable indemnity to the Trustee to
institute such proceeding as Trustee and the Trustee shall have failed to
institute such proceeding within 60 days; provided that such limitations do not
apply to a suit instituted by the Holder hereof for the enforcement of payment
of the principal of and any premium or interest on this Note on or after the
respective due dates expressed here.
No reference herein to the Indenture and to provisions of this Global Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the times, places and rates and the coin or
currency prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, this Global Note may be transferred only as permitted by the legend
hereto.
If at any time the Depositary for this Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for this Global Note or
if at any time the Depositary for this Global Note shall no longer be eligible
or in good standing under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation, the Company shall appoint a successor
Depositary with respect to this Global Note. If a successor Depositary for this
Global Note is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company's
election to issue this Note in global form shall no longer be effective with
respect to this Global Note and the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of individual
Notes of this Series in exchange for this Global Note, will authenticate and
deliver individual Notes of this Series of like tenor and terms in definitive
form in an aggregate principal amount equal to the principal amount of this
Global Note.
-5-
<PAGE>
The Company may at any time and in its sole discretion determine that all
Notes of this Series (but not less than all) issued or issuable in the form of
one or more Global Notes shall no longer be represented by such Global Note or
Notes. In such event, the Company shall execute, and the Trustee, upon receipt
of a Company Order for the authentication and delivery of individual Notes of
this Series in exchange for such Global Note, shall authenticate and deliver,
individual Notes of this Series of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such Global Note or
Notes in exchange for such Global Note or Notes.
Under certain circumstances specified in the Indenture, the Depositary may
be required to surrender any two or more Global Notes which have identical terms
(but which may have differing Original Issue Dates) to the Trustee, and the
Company shall execute and the Trustee shall authenticate and deliver to, or at
the direction of, the Depositary a Global Note in principal amount equal to the
aggregate principal amount of, and with all terms identical to, the Global Notes
surrendered thereto and that shall indicate all Original Issue Dates and the
principal amount applicable to each such Original Issue Date.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of Oklahoma.
Unless the certificate of authentication hereon has been executed by the
Trustee, directly or through an Authenticating Agent by manual signature of an
authorized officer, this Global Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
All terms used in this Global Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture unless otherwise indicated
herein.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
OKLAHOMA GAS AND ELECTRIC COMPANY
By:
---------------------------------------
PRESIDENT
Dated: July 21, 1997 Attest:
------------------------------------
SECRETARY
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This Note is one of the Notes of the series
herein designated, described or provided
for in the within-mentioned Indenture.
NATIONSBANK, N.A., AS TRUSTEE
By:
------------------------------------
AUTHORIZED OFFICER
-6-
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay this Senior Note (or portion thereof specified below) on July 15, 2007
pursuant to its terms at a price equal to the principal amount thereof, together
with accrued and unpaid interest to July 15, 2007, to the undersigned at:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or type the name and address of the undersigned above)
If less than the entire principal amount of this Senior Note is to be
repaid on July 15, 2007, specify the principal amount thereof which the holder
elects to have repaid: __________; and specify the denomination or denominations
(which shall not be less than the minimum authorized denomination) of the Senior
Notes to be issued to the holder for the portion of this Senior Note not being
repaid (in the absence of any such specification, one such Note will be issued
for the portion not being repaid): _________________
Dated: ________________________
_______________________________________
(Signature)
NOTICE: The signature of this Option to Elect Repayment must correspond with
the name as written upon the face of the within Senior Note in every
particular without alteration or enlargement or any change whatever.
-7-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations.
TEN COM -- as tenants in common UNIF GIFT
MIN ACT -- _____ Custodian _________
(Cust) (Minor)
TEN ENT -- as tenants by the entireties Under Uniform Gifts to Minors
JT TEN -- as joint tenants with right of
survivorship and not as tenants in common __________________________________
State
Additional abbreviations may also be used
though not in the above list.
____________
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
- --------------------------------------
Please print or typewrite name and address
including postal zip code of assignee
- -------------------------------------------------
the within note and all rights thereunder, hereby
irrevocably constituting and appointing
attorney to transfer said
note on the books of the Company, with full power
of substitution in the premises.
Dated: ------------------------------------------
--------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written upon
the face of the within instrument in every
particular, without alteration or enlargement
or any change whatever.
-8-
<PAGE>
EXHIBIT B
FORM OF 6.50% SENIOR NOTE, SERIES
DUE JULY 15, 2017
REGISTERED REGISTERED
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE DEPOSITARY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL
NOTE MAY NOT BE TRANSFERRED EXCEPT 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 BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), TO THE TRUSTEE FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE 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 IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
OKLAHOMA GAS AND ELECTRIC COMPANY
6.50% SENIOR NOTE, SERIES DUE JULY 15, 2017
CUSIP: 678858BB6 NUMBER: R-1
ORIGINAL ISSUE DATE(S): PRINCIPAL AMOUNT(S): $125,000,000
JULY 21, 1997
INTEREST RATE: 6.50% MATURITY DATE: JULY 15, 2017
OKLAHOMA GAS AND ELECTRIC COMPANY, a corporation of the State of Oklahoma
(the "COMPANY"), for value received hereby promises to pay to ___________ or
registered assigns, the principal sum of
ONE HUNDRED TWENTY FIVE MILLION DOLLARS
on the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date (or if this Global Note has two or more Original Issue
Dates, interest shall, beginning on each such Original Issue Date, begin to
accrue for that part of the principal amount to which that Original Issue Date
is applicable) set forth above or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually in arrears on
January 15 and July 15 in each year, commencing on the first such Interest
Payment Date succeeding the applicable Original Issue Date set forth above, at
the per annum Interest Rate set forth above, until the principal hereof is paid
or made available for payment. No interest shall accrue on the Maturity Date,
so long as the principal amount of this Global Note is paid on the Maturity
Date. The interest so payable and punctually paid or duly provided for on any
such Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note is
<PAGE>
registered at the close of business on the Regular Record Date for such
interest, which shall be the December 31 or the June 30, as the case may be,
next preceding such Interest Payment Date; provided that the first Interest
Payment Date for any part of this Note, the Original Issue Date of which is
after a Regular Record Date but prior to the applicable Interest Payment
Date, shall be the Interest Payment Date following the next succeeding
Regular Record Date; and provided that interest payable on the Maturity Date
set forth above or, if applicable, upon redemption, repayment or
acceleration, shall be payable to the Person to whom principal shall be
payable. Except as otherwise provided in the Indenture (as defined below),
any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date and shall be
paid to the Person in whose name this Note is registered at the close of
business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Noteholders not
more than fifteen days or fewer than ten days prior to such Special Record
Date. On or before 10:00 a.m., New York City time, or such other time as
shall be agreed upon between the Trustee and the Depositary, of the day on
which such payment of interest is due on this Global Note (other than
maturity), the Trustee shall pay to the Depositary such interest in same day
funds. On or before 10:00 a.m., New York City time, or such other time as
shall be agreed upon between the Trustee and the Depositary, of the day on
which principal, interest payable at maturity and premium, if any, is due on
this Global Note, the Trustee shall deposit with the Depositary the amount
equal to the principal, interest payable at maturity and premium, if any, by
wire transfer into the account specified by the Depositary. As a condition
to the payment, on the Maturity Date or upon redemption, repayment or
acceleration, of any part of the principal and applicable premium of this
Global Note, the Depositary shall surrender, or cause to be surrendered, this
Global Note to the Trustee, whereupon a new Global Note shall be issued to
the Depositary.
This Global Note is a global security in respect of a duly authorized issue
of 6.50% Senior Notes, Series due July 15, 2017 (the "NOTES OF THIS SERIES",
which term includes any Global Notes representing such Notes) of the Company
issued and to be issued under an Indenture dated as of October 1, 1995 between
the Company and NationsBank, N.A., as successor trustee (the "TRUSTEE", which
term includes any subsequent successor Trustee under the Indenture) to Boatmen's
First National Bank of Oklahoma and indentures supplemental thereto
(collectively, the "INDENTURE"). Under the Indenture, one or more series of
notes may be issued and, as used herein, the term "Notes" refers to the Notes of
this Series and any other outstanding series of Notes. Reference is hereby made
for a more complete statement of the respective rights, limitations of rights,
duties and immunities under the Indenture of the Company, the Trustee and the
Noteholders and of the terms upon which the Notes are and are to be
authenticated and delivered. This Global Note has been issued in respect of the
series designated on the first page hereof, limited in aggregate principal
amount to $125,000,000.
Prior to the Release Date (as hereinafter defined), the Notes will be
secured by first mortgage bonds (the "SENIOR NOTE FIRST MORTGAGE BONDS")
delivered by the Company to the Trustee for the benefit of the Holders of the
Notes, issued under the Trust Indenture, dated as of February 1, 1945, from the
Company to NationsBank, N.A., as successor trustee to The First National Bank
and Trust Company of Oklahoma City and to Boatmen's First National Bank of
Oklahoma (the "MORTGAGE TRUSTEE"), as supplemented and modified (collectively,
the "FIRST MORTGAGE"). Reference is made to the First Mortgage and the
Indenture for a description of the rights of the Trustee as holder of the Senior
Note First Mortgage Bonds, the property mortgaged and pledged, under the First
Mortgage and the rights of the Company and of the Mortgage Trustee in respect
thereof, the duties and immunities of the Mortgage Trustee and the terms and
conditions upon which the Senior Note First Mortgage Bonds are secured and the
circumstances under which additional first mortgage bonds may be issued.
FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN SENIOR
NOTE FIRST MORTGAGE BONDS) ISSUED UNDER THE FIRST MORTGAGE HAVE BEEN RETIRED
THROUGH PAYMENT, REDEMPTION
-2-
<PAGE>
OR OTHERWISE (INCLUDING THOSE FIRST MORTGAGE BONDS "DEEMED TO BE PAID" WITHIN
THE MEANING OF THAT TERM AS USED IN ARTICLE X OF THE FIRST MORTGAGE) AT,
BEFORE OR AFTER THE MATURITY THEREOF (THE "RELEASE DATE"), THE SENIOR NOTE
FIRST MORTGAGE BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER. IN
CERTAIN CIRCUMSTANCES PRIOR TO THE RELEASE DATE AS PROVIDED IN THE INDENTURE,
THE COMPANY IS PERMITTED TO REDUCE THE AGGREGATE PRINCIPAL AMOUNT OF A SERIES
OF SENIOR NOTE FIRST MORTGAGE BONDS HELD BY THE TRUSTEE, BUT IN NO EVENT
PRIOR TO THE RELEASE DATE TO AN AMOUNT LESS THAN THE AGGREGATE OUTSTANDING
PRINCIPAL AMOUNT OF THE SERIES OF NOTES INITIALLY ISSUED CONTEMPORANEOUSLY
WITH SUCH SENIOR NOTE FIRST MORTGAGE BONDS.
Each Note of this Series shall be dated and issued as of the date of its
authentication by the Trustee and shall bear an Original Issue Date or Dates.
Each Note or Global Note issued upon transfer, exchange or substitution of such
Note or Global Note shall bear the Original Issue Date or Dates of such
transferred, exchanged or substituted Note or Global Note, as the case may be.
The Company, at its option, may redeem on any date on or after August 15,
2004, all or, from time to time, any part of this Global Note at a redemption
price equal to the greater of (i) 100% of the principal amount of this Global
Note to be redeemed and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate, plus in each case accrued and unpaid
interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes of this Series to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of Notes of this Series. "Independent Investment
Banker" means one of the Reference Treasury Dealers appointed by the Senior Note
Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such third business day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Senior Note Trustee is unable to obtain at least four
such Reference Treasury Dealer Quotations, the average of all such Quotations
obtained. "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Senior Note Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Senior Note Trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third business day preceding such redemption
date.
"Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Bear, Stearns & Co. Inc., Lehman Brothers Inc. and Morgan
Stanley & Co. Incorporated,
-3-
<PAGE>
and their respective successors; provided, however, that if any of the
foregoing shall cease to be a primary U.S. Government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer.
Notice of redemption will be given by mail to Holders of Notes of this
Series not less than 30 or more than 60 days prior to the date fixed for
redemption, all as provided in the Indenture. In the event of redemption of
this Global Note in part only, a new Global Note or Notes of like tenor and
series for the unredeemed portion hereof will be issued in the name of the
Noteholder hereof upon the surrender hereof.
The Notes of this Series will be repayable on July 15, 2004, at the option
of the Holders thereof, at 100% of their principal amount, together with accrued
and unpaid interest to July 15, 2004. In order for this Global Note to be
repaid, the Company must receive at the corporate trust office of the Trustee
during the period from and including May 15, 2004 to and including the close of
business on June 15, 2004 (or if June 15, 2004 is not a Business Day, the next
succeeding Business Day): (i) this Global Note with the form entitled "Option to
Elect Repayment" on this Global Note duly completed, or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank or
a trust company in the United States of America setting forth the name of the
Holder of this Global Note, the principal amount of this Global Note, the
principal amount of this Global Note to be repaid, a statement that the option
to elect repayment is being exercised thereby and a guarantee that this Global
Note (with the form entitled "Option to Elect Repayment" on this Global Note
duly completed) will be received at the Trustee's corporate trust office, no
later than five Business Days after the date of such telegram, telex, facsimile
transmission or letter and this Global Note and form duly completed are received
at the Trustee's office, by such fifth Business Day. Effective exercise of the
repayment option by the Holder of any Note of this Series shall be irrevocable.
No transfer or exchange of any Note of this Series (or, in the event that any
Note of this Series is to be repaid in part, such portion of the Note of this
Series to be repaid) will be permitted after exercise of the repayment option.
The repayment option may be exercised by the Holder of a Note of this Series for
less than the entire principal amount of the Note of this Series, provided the
principal amount which is to be repaid is set forth on the form entitled "Option
to Elect Repayment" on the Note of this Series and is equal to $1,000 or any
integral multiple thereof. All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Note of this Series for
repayment will be determined by the Company, whose determination will be final,
binding and non-appealable. Upon timely delivery of a Note of this Series to
the Trustee with the "Option to Elect Repayment" form completed in accordance
with the foregoing, the outstanding principal amount of such Note of this Series
(or portion thereof indicated on the "Option to Elect Repayment") shall become
due and payable on July 15, 2004, at a price equal to 100% of the principal
amount to be repaid plus accrued and unpaid interest to July 15, 2004.
Interest payments for this Global Note shall be computed and paid on the
basis of a 360-day year of twelve 30-day months. If any Interest Payment Date
or date on which the principal of this Global Note is required to be paid is not
a Business Day, then payment of principal, premium or interest need not be made
on such date but may be made on the next succeeding Business Day with the same
force and effect as if made on such Interest Payment Date or date on which the
principal of this Global Note is required to be paid and, in the case of timely
payment thereof, no interest shall accrue for the period from and after such
Interest Payment Date or the date on which the principal of this Global Note is
required to be paid.
The Company, at its option, and subject to the terms and conditions
provided in the Indenture, will be discharged from any and all obligations in
respect of the Notes (except for certain obligations
-4-
<PAGE>
including obligations to register the transfer or exchange of Notes, replace
stolen, lost or mutilated Notes, maintain paying agencies and hold monies for
payment in trust, all as set forth in the Indenture) if the Company deposits
with the Trustee money, U.S. Government Obligations which through the payment
of interest thereon and principal thereof in accordance with their terms will
provide money, or a combination of money and U.S. Government Obligations, in
any event in an amount sufficient, without reinvestment, to pay all the
principal of and any premium and interest on the Notes on the dates such
payments are due in accordance with the terms of the Notes.
If an Event of Default shall occur and be continuing, the principal of the
Notes may be declared due and payable in the manner and with the effect provided
in the Indenture and, upon such declaration, the Trustee can demand the
redemption of the Senior Note First Mortgage Bonds as provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Noteholders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the outstanding Notes. Any such consent or
waiver by the Holder of this Global Note shall be conclusive and binding upon
such Holder and upon all future Holders of this Global Note and of any Note
issued upon the registration of transfer hereof or in exchange therefor or in
lieu thereof whether or not notation of such consent or waiver is made upon the
Note.
As set forth in and subject to the provisions of the Indenture, no Holder
of any Notes will have any right to institute any proceeding with respect to the
Indenture or for any remedy thereunder unless such Holder shall have previously
given to the Trustee written notice of a continuing Event of Default with
respect to such Notes, the Holders of not less than a majority in principal
amount of the outstanding Notes affected by such Event of Default shall have
made written request and offered reasonable indemnity to the Trustee to
institute such proceeding as Trustee and the Trustee shall have failed to
institute such proceeding within 60 days; provided that such limitations do not
apply to a suit instituted by the Holder hereof for the enforcement of payment
of the principal of and any premium or interest on this Note on or after the
respective due dates expressed here.
No reference herein to the Indenture and to provisions of this Global Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the times, places and rates and the coin or
currency prescribed in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, this Global Note may be transferred only as permitted by the legend
hereto.
If at any time the Depositary for this Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for this Global Note or
if at any time the Depositary for this Global Note shall no longer be eligible
or in good standing under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation, the Company shall appoint a successor
Depositary with respect to this Global Note. If a successor Depositary for this
Global Note is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company's
election to issue this Note in global form shall no longer be effective with
respect to this Global Note and the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of individual
Notes of this Series in exchange for this Global Note, will authenticate and
deliver individual Notes of this Series of like tenor and terms in definitive
form in an aggregate principal amount equal to the principal amount of this
Global Note.
-5-
<PAGE>
The Company may at any time and in its sole discretion determine that all
Notes of this Series (but not less than all) issued or issuable in the form of
one or more Global Notes shall no longer be represented by such Global Note or
Notes. In such event, the Company shall execute, and the Trustee, upon receipt
of a Company Order for the authentication and delivery of individual Notes of
this Series in exchange for such Global Note, shall authenticate and deliver,
individual Notes of this Series of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such Global Note or
Notes in exchange for such Global Note or Notes.
Under certain circumstances specified in the Indenture, the Depositary may
be required to surrender any two or more Global Notes which have identical terms
(but which may have differing Original Issue Dates) to the Trustee, and the
Company shall execute and the Trustee shall authenticate and deliver to, or at
the direction of, the Depositary a Global Note in principal amount equal to the
aggregate principal amount of, and with all terms identical to, the Global Notes
surrendered thereto and that shall indicate all Original Issue Dates and the
principal amount applicable to each such Original Issue Date.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of Oklahoma.
Unless the certificate of authentication hereon has been executed by the
Trustee, directly or through an Authenticating Agent by manual signature of an
authorized officer, this Global Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
All terms used in this Global Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture unless otherwise indicated
herein.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
OKLAHOMA GAS AND ELECTRIC COMPANY
By:
---------------------------------------
PRESIDENT
Dated: July 21, 1997 Attest:
-----------------------------------
SECRETARY
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This Note is one of the Notes of the series
herein designated, described or provided
for in the within-mentioned Indenture.
NATIONSBANK, N.A., AS TRUSTEE
By:
------------------------------------
AUTHORIZED OFFICER
-6-
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay this Senior Note (or portion thereof specified below) on July 15, 2004
pursuant to its terms at a price equal to the principal amount thereof, together
with accrued and unpaid interest to July 15, 2004, to the undersigned at:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or type the name and address of the undersigned above)
If less than the entire principal amount of this Senior Note is to be
repaid on July 15, 2004, specify the principal amount thereof which the holder
elects to have repaid: __________; and specify the denomination or denominations
(which shall not be less than the minimum authorized denomination) of the Senior
Notes to be issued to the holder for the portion of this Senior Note not being
repaid (in the absence of any such specification, one such Note will be issued
for the portion not being repaid): _________________
Dated: ________________________
_______________________________________
(Signature)
NOTICE: The signature of this Option to Elect Repayment must correspond with
the name as written upon the face of the within Senior Note in every
particular without alteration or enlargement or any change whatever.
-7-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations.
TEN COM -- as tenants in common UNIF GIFT
MIN ACT -- _____ Custodian _________
(Cust) (Minor)
TEN ENT -- as tenants by the entireties Under Uniform Gifts to Minors
JT TEN -- as joint tenants with right of
survivorship and not as tenants in common --------------------------------
State
Additional abbreviations may also be used
though not in the above list.
____________
FOR VALUE RECEIVED the undersigned hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Please print or typewrite name and address
including postal zip code of assignee
- -------------------------------------------------
the within note and all rights thereunder, hereby
irrevocably constituting and appointing
_____________________________________ attorney to
transfer said note on the books of the Company,
with full power of substitution in the premises.
Dated: __________________________________________
-------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written upon
the face of the within instrument in every
particular, without alteration or enlargement
or any change whatever.
-8-
<PAGE>
----------------------------------------------------------------------
----------------------------------------------------------------------
SUPPLEMENTAL TRUST INDENTURE
FROM
OKLAHOMA GAS AND ELECTRIC COMPANY
TO
NATIONSBANK, N.A.
TRUSTEE
---------
DATED JULY 1, 1997
---------
SUPPLEMENTAL TO TRUST INDENTURE
DATED FEBRUARY 1, 1945
----------------------------------------------------------------------
----------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
--------------
PAGE
Parties................................................................... 1
Recitals.................................................................. 1
Form of Bond.............................................................. 3
Form of Trustee's Certificate............................................. 5
Further Recitals.......................................................... 5
ARTICLE I.
SPECIFIC SUBJECTION OF PROPERTY TO THE LIEN
OF THE ORIGINAL INDENTURE
SECTION 1.01 -- Grant of certain property, including personal
property to comply with the Uniform Commercial Code,
subject to permissible encumbrances and other
exceptions contained in Original Indenture.......... 6
ARTICLE II.
FORM AND EXECUTION OF BONDS OF SENIOR NOTE SERIES C
SECTION 2.01 -- Terms of bonds of Senior Note Series C.............. 7
SECTION 2.02 -- Bonds of Senior Note Series C deemed fully paid upon
payment of Senior Notes............................. 7
SECTION 2.03 -- Redemption or repayment provisions may be
incorporated by reference........................... 8
SECTION 2.04 -- Interchangeability of bonds of Senior Note
Series C............................................ 8
SECTION 2.05 -- Charges for exchange or transfer of bonds........... 8
I
<PAGE>
<TABLE>
<S> <C><C> <C> <C>
ARTICLE III.
FORM AND EXECUTION OF BONDS OF SENIOR NOTE SERIES D
SECTION 3.01 -- Terms of bonds of Senior Note Series D.............. 8
SECTION 3.02 -- Bonds of Senior Note Series D deemed fully paid upon
payment of Senior Notes............................. 9
SECTION 3.03 -- Redemption or repayment provisions may be
incorporated by reference........................... 9
SECTION 3.04 -- Interchangeability of bonds of Senior Note
Series D............................................ 9
SECTION 3.05 -- Charges for exchange or transfer of bonds........... 9
ARTICLE IV.
REDEMPTION AND REPAYMENT OF BONDS OF SENIOR NOTE SERIES C
OR OF SENIOR NOTE SERIES D
SECTION 4.01 -- Redemption of Bonds................................. 9
SECTION 4.02 -- Sinking Fund for Bonds.............................. 10
SECTION 4.03 -- Payment on Redemption............................... 10
SECTION 4.04 -- Other Principal Repayments.......................... 10
ARTICLE V.
FINANCING STATEMENT TO COMPLY WITH THE UNIFORM COMMERCIAL CODE
SECTION 5.01 -- Names and addresses of debtor and secured party..... 11
SECTION 5.02 -- Property subject to lien............................ 11
SECTION 5.03 -- Maturity dates and principal amounts of obligations
secured............................................. 11
SECTION 5.04 -- Financing Statement adopted for all First Mortgage
Bonds listed in Section 5.03........................ 11
SECTION 5.05 -- Recording data for Original Indenture and prior
Supplemental Indentures............................. 12
SECTION 5.06 -- Financing Statement covers additional series of
First Mortgage Bonds................................ 12
</TABLE>
II
<PAGE>
<TABLE>
<S> <C><C> <C> <C>
ARTICLE VI.
MISCELLANEOUS
SECTION 6.01 -- Recitals of fact, except as stated, are statements
of the Company...................................... 12
SECTION 6.02 -- Supplemental Trust Indenture to be construed as a
part of the Original Indenture...................... 12
SECTION 6.03 -- (a) Trust Indenture Act to control...................... 12
(b) Severability of provisions contained in Supplemental
Trust Indenture and bonds........................... 13
SECTION 6.04 -- Word "Indenture" as used herein includes in its
meaning the Original Indenture and all indentures
supplemental thereto................................ 13
SECTION 6.05 -- References to either party in Supplemental Trust
Indenture include successors or assigns............. 13
SECTION 6.06 -- (a) Provision for execution in counterparts............. 13
(b) Table of Contents and descriptive headings of
Articles not to affect meaning...................... 13
SCHEDULE A................................................................ A-1
</TABLE>
III
<PAGE>
SUPPLEMENTAL TRUST INDENTURE, made as of the 1st day of July 1997 by and
between OKLAHOMA GAS AND ELECTRIC COMPANY, a corporation duly organized under
the laws of the Territory of Oklahoma and existing under and by virtue of the
laws of the State of Oklahoma, having its principal office in the City of
Oklahoma City, in said State of Oklahoma (hereinafter sometimes called the
"Company"), the party of the first part, and NationsBank, N.A., a national
banking association duly organized and existing under the National Banking Laws
of the United States of America, having its principal corporate trust office in
the City of Oklahoma City, in the State of Oklahoma, as Trustee, party of the
second part:
WITNESSETH:
WHEREAS, the Company has heretofore executed and delivered its Trust
Indenture (hereinafter referred to as the "Original Indenture"), made as of
February 1, 1945, whereby the Company granted, bargained, sold, warranted,
released, conveyed, assigned, transferred, mortgaged, pledged, set over and
confirmed unto the trustee under said indenture and to its respective successors
in trust (herein the "Trustee"), all property, real, personal and mixed then
owned or thereafter acquired or to be acquired by the Company (except as therein
excepted from the lien thereof) and subject to the rights reserved by the
Company in and by the provisions of the Original Indenture, to be held by said
Trustee and its respective successors in trust in accordance with the provisions
of the Original Indenture for the equal pro rata benefit and security of all and
each of the bonds issued and to be issued thereunder in accordance with the
provisions thereof; and
WHEREAS, The First National Bank and Trust Company of Oklahoma City was
formerly the Trustee under the Original Indenture as supplemented; and
WHEREAS, pursuant to Article XVI of the Original Indenture, Boatmen's First
National Bank of Oklahoma succeeded The First National Bank and Trust Company of
Oklahoma City as Trustee under the Original Indenture, as supplemented and
NationsBank, N.A. subsequently succeeded Boatmen's First National Bank of
Oklahoma as Trustee under the Original Indenture, as supplemented; and
WHEREAS, Section 2.01 of the Original Indenture provides that bonds may be
issued thereunder in one or more series, each series to have such distinctive
designation as the Board of Directors of the Company may select for such series;
and
WHEREAS, the Company has heretofore issued in accordance with the provisions
of the Original Indenture, bonds of a series designated "First Mortgage Bonds,
Series due February 1, 1975," bearing interest at the rate of 2 3/4% per annum,
which were paid at maturity and are no longer outstanding; and
WHEREAS, the Company has heretofore executed and delivered to the Trustee
the following additional Supplemental Trust Indentures which, in addition to
conveying, assigning, transferring, mortgaging, pledging, setting over and
confirming to the Trustee, and its respective successors in said trust,
additional property acquired by it subsequent to the preparation of the Original
Indenture and
1
<PAGE>
of the next preceding Supplemental Trust Indenture and adding to the covenants,
conditions and agreements of the Original Indenture certain additional
covenants, conditions and agreements to be observed by the Company, created the
following series of First Mortgage Bonds:
<TABLE>
<CAPTION>
DATE OF
SUPPLEMENTAL TRUST INDENTURE DESIGNATION OF SERIES
- -------------------------------------- ------------------------------------------------------
<S> <C>
December 1, 1948...................... Series due December 1, 1978 (redeemed)
June 1, 1949.......................... Series due June 1, 1979 (paid at maturity)
May 1, 1950........................... Series due May 1, 1980 (paid at maturity)
March 1, 1952......................... Series due March 1, 1982 (paid at maturity)
June 1, 1955.......................... Series due June 1, 1985 (paid at maturity)
January 1, 1957....................... Series due January 1, 1987 (paid at maturity)
June 1, 1958.......................... Series due June 1, 1988 (paid at maturity)
March 1, 1963......................... Series due March 1, 1993 (paid at maturity)
March 1, 1965......................... Series due March 1, 1995 (paid at maturity)
January 1, 1967....................... Series due January 1, 1997 (paid at maturity)
January 1, 1968....................... Series due January 1, 1998
January 1, 1969....................... Series due January 1, 1999
January 1, 1970....................... Series due January 1, 2000 (redeemed)
January 1, 1972....................... Series due January 1, 2002
January 1, 1974....................... Series due January 1, 2004 (redeemed)
January 1, 1975....................... Series due January 1, 2005 (redeemed)
January 1, 1976....................... Series due January 1, 2006 (redeemed)
January 1, 1977....................... Series due January 1, 2007
November 1, 1977...................... Series due November 1, 2007
December 1, 1977...................... Pollution Control Series A (redeemed)
February 1, 1980...................... Series due February 5, 2000 (redeemed)
April 15, 1982........................ Pollution Control Series B (redeemed)
August 15, 1986....................... Series due August 15, 2016
March 1, 1987......................... Pollution Control Series C
November 15, 1990..................... Series due December 1, 2020
October 1, 1995....................... Senior Note Series A and Senior Note Series B; and
</TABLE>
WHEREAS, the Company has heretofore executed and delivered to the Trustee a
Supplemental Trust Indenture, dated September 14, 1976, and a Supplemental Trust
Indenture, dated December 9, 1991, setting forth duly adopted modifications and
alterations to the Original Indenture and all Supplemental Trust Indentures
thereto; and
WHEREAS, the Company has agreed to issue $125,000,000 principal amount of
its Senior Notes, 6.65% Series due July 15, 2027 (the "Senior Notes due 2027")
and $125,000,000 principal amount of its Senior Notes, 6.50% Series due July 15,
2017 (the "Senior Notes due 2017") pursuant to the provisions of the Indenture
dated as of October 1, 1995 and all indentures supplemental thereto (the "Senior
Note Indenture") between the Company and NationsBank, N.A., as successor trustee
(said trustee or any successor trustee under the Senior Note Indenture being
hereinafter referred to as the "Senior Note Trustee"); and
2
<PAGE>
WHEREAS, in order to secure the Company's obligations to pay principal,
premium, if any, and interest on the Senior Notes due 2027, the Senior Notes due
2017 and any other series of notes previously or hereafter issued under the
Senior Note Indenture prior to the Release Date (as hereinafter defined) (the
Senior Notes due 2027, the Senior Notes due 2017 and such other notes are
collectively referred to herein as, the "Senior Notes"), the Company desires to
provide for the issuance under the Original Indenture to the Senior Note Trustee
of a new series of bonds designated "First Mortgage Bonds, Senior Note Series
C", having the same stated rate of interest, interest payment dates, stated
maturity date, repayment provisions and redemption provisions and in the same
aggregate principal amount as the Senior Notes due 2027, and of a new series of
bonds designated "First Mortgage Bonds, Senior Note Series D", having the same
stated rate of interest, interest payment dates, stated maturity date, repayment
provisions and redemption provisions and in the same aggregate principal amount
as the Senior Notes due 2017, all of such Bonds to be issued as registered bonds
without coupons in denominations of a multiple of $1,000 and to be substantially
in the form and of the tenor following, to-wit:
(Form of Bond of Senior Note Series C and of Senior Note Series D)
OKLAHOMA GAS AND ELECTRIC COMPANY
(Incorporated under the laws of Oklahoma)
First Mortgage Bonds
Senior Note Series C [D]
This Bond is not transferable except to a successor trustee under the Indenture,
dated October 1, 1995, as supplemented, between Oklahoma Gas and Electric
Company and NationsBank, N.A., as successor trustee.
No. $
OKLAHOMA GAS AND ELECTRIC COMPANY, a corporation organized under the laws of
the Territory of Oklahoma and existing under and by virtue of the laws of the
State of Oklahoma (hereinafter called the Company), for value received, hereby
promises to pay to NationsBank, N.A., successor trustee, under the Indenture
dated as of October 1, 1995 (the "Senior Note Indenture") between the Company
and NationsBank, N.A. (successor trustee to Boatmen's First National Bank of
Oklahoma) or to any successor trustee under the Senior Note Indenture (said
trustee and any successor trustee under the Senior Note Indenture being
hereinafter referred to as the "Senior Note Trustee"), at the office of
NationsBank, N.A., at Oklahoma City, Oklahoma, the sum of Dollars in
lawful money of the United States of America, on the fifteenth day of * , and
to pay interest hereon from the date hereof at the rate of ** per cent per
annum, in like money, until the principal hereof becomes due and payable, said
interest being payable at the office of NationsBank, N.A., at Oklahoma City,
Oklahoma, on the fifteenth day of January and on the fifteenth day of July in
each year; provided that, as long as there is no existing default in the payment
of interest and except for the payment of defaulted interest, the interest
payable on any January 15 or July 15 will be paid to the person in whose name
this bond was registered at the close of business on the record date (the
December 31 prior to such January 15 or the June 30 prior to such July 15 unless
any such date is not a business day, in which event it will be the next
preceding business day).
This bond is one of a duly authorized issue of bonds of the Company, known
as its First Mortgage Bonds, of the series and designation indicated on the face
hereof, which issue of bonds consists, or may consist, of several series of
varying denominations, dates and tenors, all issued and to be issued under and
equally secured (except insofar as a sinking fund, or similar fund, established
in accordance with the provisions of the Indenture may afford additional
security for the bonds of any specific series) by a
*July, 2027 for Bonds of the Senior Note Series C and July, 2017 for Bonds of
the Senior Note Series D.
**6.65 percent for Bonds of the Senior Note Series C and 6.50 percent for Bonds
of the Senior Note Series D.
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Trust Indenture dated February 1, 1945 (the "Original Indenture"), and
Supplemental Trust Indentures thereto, dated December 1, 1948, June 1, 1949, May
1, 1950, March 1, 1952, June 1, 1955, January 1, 1957, June 1, 1958, March 1,
1963, March 1, 1965, January 1, 1967, January 1, 1968, January 1, 1969, January
1, 1970, January 1, 1972, January 1, 1974, January 1, 1975, January 1, 1976,
September 14, 1976, January 1, 1977, November 1, 1977, December 1, 1977,
February 1, 1980, April 15, 1982, August 15, 1986, March 1, 1987, November 15,
1990, December 9, 1991, October 1, 1995 and July 1, 1997 (all of which
instruments along with the Original Indenture are herein collectively called the
Indenture), between the Company and NationsBank, N.A. (herein called the
Trustee), as successor trustee to Boatmen's First National Bank of Oklahoma and
to The First National Bank and Trust Company of Oklahoma City, to which
Indenture reference is hereby made for a description of the property mortgaged
and pledged, the nature and extent of the security, the rights of the holders of
the bonds as to such security, and the terms and conditions upon which the bonds
may be issued under the Indenture and are secured. The principal hereof may be
declared or may become due on the conditions, in the manner and at the time set
forth in the Indenture, upon the happening of a completed default as in the
Indenture provided.
All or part of the Bonds of this Series are required to be redeemed upon the
occurrence of certain events and upon the terms and conditions provided in the
Supplemental Trust Indenture dated July 1, 1997. All or part of the Bonds of
this Series also are subject to repayment at the option of the holders thereof
upon the terms and conditions provided in the Supplemental Trust Indenture dated
July 1, 1997.
The Bonds of this Series are being issued in connection with the issuance
pursuant to the Senior Note Indenture of a series of notes designated the *
(the "Senior Notes due ** "). The Company's obligations to make payments with
respect to the principal of, premium and/or interest on the Bonds of this Series
shall be fully or partially, as the case may be, satisfied and discharged to the
extent that, at the time any such payment shall be due, the then due principal,
premium and/or interest on the Senior Notes due ** shall have been fully or
partially paid or there shall have been deposited with the Senior Note Trustee
pursuant to Section 2.12 of the Senior Note Indenture sufficient available funds
to fully or partially pay the then due principal of, premium, if any, and/or
interest on the Senior Notes due ** .
Upon payment of the principal of, premium, if any, and interest on the
Senior Notes due ** , whether at maturity or prior to maturity by redemption,
purchase or otherwise, or upon provision for the payment thereof having been
made in accordance with Section 5.01 of the Senior Note Indenture, Bonds of this
Series in a principal amount equal to the principal amount of the Senior Notes
due ** so paid or for which provision for payment has been made shall be
deemed fully paid, satisfied and discharged and the obligations of the Company
thereunder shall be terminated and such Bonds of this Series shall be
surrendered to and cancelled by the Trustee. From and after such time as all
bonds (other than Bonds of this Series and bonds of any other series delivered
to the Senior Note Trustee pursuant to Section 4.09 of the Senior Note
Indenture) have been retired through payment, redemption or otherwise (including
those bonds "deemed to be paid" within the meaning of that term as used in
Article X of the Original Indenture) at, before or after the maturity thereof
(the "Release Date"), the Bonds of this Series shall be deemed fully paid,
satisfied and discharged and the obligations of the Company hereunder and
thereunder shall be terminated. On the Release Date, the Bonds of this Series
shall be surrendered to and cancelled by the Trustee.
With the consent of the Company and to the extent permitted by and as
provided in the Indenture, the rights and obligations of the Company and/or of
the holders of the bonds, and/or the terms and provisions of the Indenture
and/or of any instruments supplemental thereto, may be modified or altered by
affirmative vote of the holders of at least 70% in principal amount of the bonds
then
*6.65% Senior Notes, Series due July 15, 2027 for the Bonds of Senior Note
Series C and the 6.50% Senior Notes, Series due July 15, 2017 for the Bonds of
Senior Note Series D.
**2027 for the Bonds of Senior Note Series C and 2017 for the Bonds of Senior
Note Series D.
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outstanding under the Indenture and any instruments supplemental thereto
(excluding bonds disqualified from voting by reason of the interest of the
Company or of certain related persons therein as provided in the Indenture);
provided that no such modification or alteration shall permit the extension of
the maturity of the principal of this bond or the reduction in the rate of
interest hereon or any other modification in the terms of payment of such
principal or interest or the taking of certain other action as more fully set
forth in the Indenture, without the consent of the holder hereof.
No recourse shall be had for the payment of principal of, premium, if any,
or interest on this bond, or any part thereof, or of any claim based hereon or
in respect hereof or of the Indenture, against any incorporator, or any past,
present or future stockholder, officer or director of the Company or of any
predecessor or successor corporation, either directly or through the Company, or
through any such predecessor or successor corporation, or through any receiver
or a trustee in bankruptcy, 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 issue hereof, expressly waived and released, as more fully provided in
the Indenture.
This bond shall not be valid or become obligatory for any purpose unless and
until the certificate of authentication hereon shall have been signed by or on
behalf of NationsBank, N.A., as Trustee under the Indenture, or its successor
thereunder.
IN WITNESS WHEREOF, OKLAHOMA GAS AND ELECTRIC COMPANY has caused this
instrument to be signed in its name by its President or a Vice President or with
the facsimile signature of its President, and its corporate seal, or a facsimile
thereof, to be hereto affixed and attested by its Secretary or an Assistant
Secretary or with the facsimile signature of its Secretary.
Dated:
OKLAHOMA GAS AND ELECTRIC COMPANY
By ----------------------------------------
ATTEST: PRESIDENT
- -----------------------------
SECRETARY
(Form of Trustee's Certificate)
This bond is one of the bonds of the series designated therein, described in
the within mentioned Indenture.
NATIONSBANK, N.A.
By ----------------------------------------
AUTHORIZED SIGNATURE
and
WHEREAS, the Company is desirous of assigning, conveying, mortgaging,
pledging, transferring and setting over unto the Trustee and to its respective
successors in trust, additional property acquired by it subsequent to the date
of the preparation of the Supplemental Trust Indenture dated October 1, 1995;
and
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WHEREAS, Sections 4.01 and 20.03 of the Original Indenture provide in
substance that the Company and the Trustee may enter into indentures
supplemental thereto for the purposes, among others, of creating and setting
forth the particulars of any new series of bonds and of providing the terms and
conditions of the issue of the bonds of any series not expressly provided for in
the Original Indenture and of assigning, conveying, mortgaging, pledging and
transferring unto the Trustee additional property of the Company, and for any
other purpose not inconsistent with the terms of the Original Indenture; and
WHEREAS, the execution and delivery of this Supplemental Trust Indenture
have been duly authorized by a resolution adopted by the Board of Directors of
the Company;
Now, THEREFORE, THIS INDENTURE WITNESSETH:
Oklahoma Gas and Electric Company, in consideration of the premises and of
one dollar to it duly paid by the Trustee at or before the ensealing and
delivery of these presents, the receipt whereof is hereby acknowledged, and
other good and valuable considerations, does hereby covenant and agree to and
with NationsBank, N.A., as Trustee, and its successors in the trust under the
Indenture for the benefit of those who hold or shall hold the bonds and coupons,
or any of them, issued or to be issued thereunder, as follows:
ARTICLE I.
SPECIFIC SUBJECTION OF PROPERTY TO
THE LIEN OF THE ORIGINAL INDENTURE
SECTION 1.01. The Company in order to better secure the payment, both of
the principal and interest, of all bonds of the Company at any time outstanding
under the Indenture, according to their tenor and effect, and the performance of
and compliance with the covenants and conditions in the Indenture contained, has
granted, bargained, sold, warranted, released, conveyed, assigned, transferred,
mortgaged, pledged, set over and confirmed and by these presents does grant,
bargain, sell, warrant, release, convey, assign, transfer, mortgage, pledge, set
over and confirm unto NationsBank, N.A., as Trustee and to its respective
successors in said trust forever, subject to the rights reserved by the Company
in and by the provisions of the Indenture, all of the property described and
mentioned or enumerated in a schedule hereto annexed and marked Schedule A,
reference to said schedule being hereby made with the same force and effect as
if the same were incorporated herein at length; together with all and singular
the tenements, hereditaments and appurtenances belonging or in anywise
appertaining to the aforesaid property or any part thereof with the reversion
and reversions, remainder and remainders, tolls, rents and revenues, issues,
income, product and profits thereof;
Also, in order to subject the personal property and chattels of the Company
to the lien of the Indenture and to conform with the provisions of the Uniform
Commercial Code of the State of Arkansas, all power houses, substations,
electric generating plants, including buildings and other structures,
transmission and distribution systems, generating apparatus, machinery, engines,
boilers, tanks, dynamos, electric machines, regulators, meters, transformers,
generators, motors, conduits, cables, wires, poles, crossarms, insulators,
switches, capacitors, arrestors, and electrical and mechanical appliances and
apparatus; office, shop, garage and other general buildings and structures,
furniture and fixtures; and all municipal and other franchises and all
leaseholds, licenses, permits, and privileges; all as now owned or hereafter
acquired by the Company pursuant to the provisions of the Original Indenture;
and
All the estate, right, title and interest and claim whatsoever, at law as
well as in equity, which the Company now has or may hereafter acquire in and to
the aforesaid property and every part and parcel thereof;
Excluding, however, (1) all shares of stock, bonds, notes, evidences of
indebtedness and other securities other than such as may be or are required to
be deposited from time to time with the Trustee
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in accordance with the provisions of the Indenture; (2) cash other than such as
may be or is required to be deposited from time to time with the Trustee in
accordance with the provisions of the Indenture; (3) contracts, claims, bills
and accounts receivable and choses in action other than such as may be or are
required to be from time to time assigned to the Trustee in accordance with the
provisions of the Indenture; (4) motor vehicles; (5) any oil, gas and other
minerals under or on lands owned by the Company; (6) any stock of goods, wares
and merchandise, equipment, and supplies acquired for the purpose of sale or
resale in the usual course of business or for the purpose of consumption in the
operation, construction or repair of any of the properties of the Company; and
(7) the properties described in Schedule B annexed to the Original Indenture.
To have and to hold all property, real, personal and mixed, mortgaged,
pledged or conveyed by the Company, or intended so to be, unto the Trustee and
its successors and assigns forever, subject, however, to permissible
encumbrances as defined in Section 1.09 of the Original Indenture and to the
further reservations, covenants, conditions, uses and trusts set forth in the
Indenture; in trust nevertheless for the same purposes and upon the same
conditions as are set forth in the Indenture.
ARTICLE II.
FORM AND EXECUTION OF BONDS OF SENIOR NOTE SERIES C
SECTION 2.01. There is hereby created for issuance under the Indenture a
series of bonds designated Senior Note Series C, each of which shall bear the
descriptive title "First Mortgage Bond, Senior Note Series C" and the form
thereof shall contain suitable provisions with respect to the matters hereafter
specified in this Section. The bonds of said series shall be substantially of
the tenor and purport hereinbefore recited. The bonds of said series shall
mature July 15, 2027, and shall be issued as registered bonds without coupons in
denominations of $1,000, and any multiple of $1,000 and registered in the name
of the Senior Note Trustee. The bonds of said series shall bear interest at the
rate of 6.65% per annum payable semi-annually on January 15 and July 15 of each
year. The principal and interest shall be payable to the person in whose name
such Bond is registered at the principal corporate trust office of the Trustee,
in lawful money of the United States of America.
The Company's obligation to make payments with respect to the principal of,
premium and/or interest on the Bonds of Senior Note Series C shall be fully or
partially, as the case may be, satisfied and discharged to the extent that, at
the time that any such payment shall be due, the then due principal of, premium
and/or interest on the Senior Notes due 2027 shall have been fully or partially
paid or there shall have been deposited with the Senior Note Trustee pursuant to
Section 2.12 of the Senior Note Indenture sufficient available funds to fully or
partially pay the then due principal, premium, if any and/or interest on the
Senior Notes due 2027. Bonds of Senior Note Series C shall be dated as of the
interest payment date next preceding the authentication thereof by the Trustee
except that (i) if any such bond shall be authenticated before January 15, 1998,
it shall be dated as of July 21, 1997, unless (iii) below is applicable, (ii) if
the Company shall at the time of the authentication of a Bond of Senior Note
Series C be in default in the payment of interest upon the Bonds of Senior Note
Series C, such bonds shall be dated as of the date of the beginning of the
period for which such interest is so in default, and (iii) as long as there is
no existing default in the payment of interest on the Bonds of Senior Note
Series C, if any Bond of Senior Note Series C shall be authenticated after the
close of business on any Record Date but on or prior to the interest payment
date relating to such Record Date, it shall be dated as of such interest payment
date.
The term "Record Date" as used herein with respect to any interest payment
date (January 15 or July 15) for Bonds of Senior Note Series C shall mean the
December 31 prior to such January 15 or the June 30 prior to such July 15 unless
such December 31 or June 30 shall not be a business day, in which event Record
Date shall mean the next preceding business day. The term "business day" as used
herein shall mean any day other than a Saturday or a Sunday or a day on which
the principal corporate trust office of the Trustee is closed pursuant to
authorization of law.
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SECTION 2.02. Upon payment of the principal of, premium, if any, and/or
interest on the Senior Notes due 2027, whether at maturity or prior to maturity
by redemption, purchase or otherwise, or upon provision for the payment thereof
having been made in accordance with Section 5.01 of the Senior Note Indenture,
Bonds of Senior Note Series C in a principal amount equal to the principal
amount of the Senior Notes due 2027 so paid or for which provision for payment
has been made shall be deemed fully paid, satisfied and discharged and the
obligations of the Company thereunder shall be terminated and such Bonds of
Senior Note Series C shall be surrendered to and cancelled by the Trustee. From
and after such time as all bonds (other than Bonds of Senior Note Series C,
Bonds of Senior Note Series D and bonds of any other series delivered to the
Senior Note Trustee pursuant to Section 4.09 of the Senior Note Indenture) have
been retired through payment, redemption or otherwise (including those bonds
"deemed to be paid" within the meaning of that term as used in Article X of the
Original Indenture) at, before or after the maturity thereof (the "Release
Date"), the Bonds of Senior Note Series C shall be deemed fully paid, satisfied
and discharged and the obligation of the Company thereunder shall be terminated.
On the Release Date, the Bonds of Senior Note Series C shall be surrendered to
and cancelled by the Trustee.
SECTION 2.03. The terms and conditions of redemption of the Bonds of Senior
Note Series C need not be specified in any Bond of Senior Note Series C if an
appropriate reference is made in said Bond to the provisions of this
Supplemental Trust Indenture. The terms and conditions for the repayment of the
Bonds of Senior Note Series C at the option of the holder of any such Bond need
not be specified in the Bonds of Senior Note Series C if an appropriate
reference is made in said Bond to the provisions of this Supplemental Trust
Indenture.
SECTION 2.04. The registered holder of any Bond or Bonds of Senior Note
Series C at his option may surrender the same at the principal corporate trust
office of the Trustee, or elsewhere if authorized by the Company, for
cancellation, in exchange for other Bonds of Senior Note Series C of the same
aggregate principal amount, bearing interest as provided in Section 2.09 of the
Original Indenture. Thereupon, and upon receipt of any payment required under
the provisions of Section 2.05 hereof, the Company shall execute and deliver to
the Trustee and the Trustee shall authenticate and deliver such other registered
bonds without coupons to such registered holder at its office or at any other
place specified as aforesaid.
SECTION 2.05. No charge shall be made by the Company for any exchange or
transfer of Bonds of Senior Note Series C, other than for taxes or other
governmental charges, if any, that may be imposed in relation thereto.
ARTICLE III.
FORM AND EXECUTION OF BONDS OF SENIOR NOTE SERIES D
SECTION 3.01. There is hereby created for issuance under the Indenture a
series of bonds designated Senior Note Series D, each of which shall bear the
descriptive title "First Mortgage Bond, Senior Note Series D" and the form
thereof shall contain suitable provisions with respect to the matters hereafter
specified in this Section. The bonds of said series shall be substantially of
the tenor and purport hereinbefore recited. The bonds of said series shall
mature July 15, 2017, and shall be issued as registered bonds without coupons in
denominations of $1,000, and any multiple of $1,000 and registered in the name
of the Senior Note Trustee. The bonds of said series shall bear interest at the
rate of 6.50% per annum payable semi-annually on January 15 and July 15 of each
year. The principal and interest shall be payable to the person in whose name
such Bond is registered at the principal corporate trust office of the Trustee,
in lawful money of the United States of America.
The Company's obligation to make payments with respect to the principal of,
premium and/or interest on the Bonds of Senior Note Series D shall be fully or
partially, as the case may be, satisfied and discharged to the extent that, at
the time that any such payment shall be due, the then due principal of, premium
and/or interest on the Senior Notes due 2017 shall have been fully or partially
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paid or there shall have been deposited with the Senior Note Trustee pursuant to
Section 2.12 of the Senior Note Indenture sufficient available funds to fully or
partially pay the then due principal, premium, if any and/or interest on the
Senior Notes due 2017. Bonds of Senior Note Series D shall be dated as of the
interest payment date next preceding the authentication thereof by the Trustee
except that (i) if any such bond shall be authenticated before January 15, 1998,
it shall be dated as of July 21, 1997, unless (iii) below is applicable, (ii) if
the Company shall at the time of the authentication of a Bond of Senior Note
Series D be in default in the payment of interest upon the Bonds of Senior Note
Series D, such bonds shall be dated as of the date of the beginning of the
period for which such interest is so in default, and (iii) as long as there is
no existing default in the payment of interest on the Bonds of Senior Note
Series D, if any Bond of Senior Note Series D shall be authenticated after the
close of business on any Record Date but on or prior to the interest payment
date relating to such Record Date, it shall be dated as of such interest payment
date.
The term "Record Date" as used herein with respect to any interest payment
date (January 15 or July 15) for Bonds of Senior Note Series D shall mean the
December 31 prior to such January 15 or the June 30 prior to such July 15 unless
such December 31 or June 30 shall not be a business day, in which event Record
Date shall mean the next preceding business day.
SECTION 3.02. Upon payment of the principal of, premium, if any, and/or
interest on the Senior Notes due 2017, whether at maturity or prior to maturity
by redemption or otherwise, or upon provision for the payment thereof having
been made in accordance with Section 5.01 of the Senior Note Indenture, Bonds of
Senior Note Series D in a principal amount equal to the principal amount of the
Senior Notes due 2017 so paid or for which provision for payment has been made
shall be deemed fully paid, satisfied and discharged and the obligations of the
Company thereunder shall be terminated and such Bonds of Senior Note Series D
shall be surrendered to and cancelled by the Trustee. From and after the Release
Date, the Bonds of Senior Note Series D shall be deemed fully paid, satisfied
and discharged and the obligation of the Company thereunder shall be terminated.
On the Release Date, the Bonds of Senior Note Series D shall be surrendered to
and cancelled by the Trustee.
SECTION 3.03. The terms and conditions of redemption of the Bonds of Senior
Note Series D need not be specified in any Bond of Senior Note Series D if an
appropriate reference is made in said Bond to the provisions of this
Supplemental Trust Indenture. The terms and conditions for the repayment of the
Bonds of Senior Note Series D at the option of the holder of any such Bond need
not be specified in the Bonds of Senior Note Series D if an appropriate
reference is made in said Bond to the provisions of this Supplemental Trust
Indenture.
SECTION 3.04. The registered holder of any Bond or Bonds of Senior Note
Series D at his option may surrender the same at the principal corporate trust
office of the Trustee, or elsewhere if authorized by the Company, for
cancellation, in exchange for other Bonds of Senior Note Series D of the same
aggregate principal amount, bearing interest as provided in Section 2.09 of the
Original Indenture. Thereupon, and upon receipt of any payment required under
the provisions of Section 2.05 hereof, the Company shall execute and deliver to
the Trustee and the Trustee shall authenticate and deliver such other registered
bonds without coupons to such registered holder at its office or at any other
place specified as aforesaid.
SECTION 3.05. No charge shall be made by the Company for any exchange or
transfer of Bonds of Senior Note Series D, other than for taxes or other
governmental charges, if any, that may be imposed in relation thereto.
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ARTICLE IV.
REDEMPTION AND REPAYMENT OF BONDS OF SENIOR NOTE SERIES C
OR OF SENIOR NOTE SERIES D
SECTION 4.01. (a) Upon notice being given of the redemption of all or part
of the Senior Notes due 2027 in accordance with the Senior Note Indenture and
such Senior Notes becoming due and payable in accordance with such notice of
redemption, the Company shall redeem on the redemption date specified in such
notice a principal amount of Bonds of Senior Note Series C equal to the
principal amount of Senior Notes due 2027 to be redeemed, at a redemption price
equal to the principal amount of such Bonds of Senior Note Series C to be
redeemed, plus a premium equal to the premium payable on the redemption of such
Senior Notes due 2027, plus accrued interest to such redemption date.
(b) Upon notice being given of the redemption of all or part of the Senior
Notes due 2017 in accordance with the Senior Note Indenture and such Senior
Notes becoming due and payable in accordance with such notice of redemption, the
Company shall redeem on the redemption date specified in such notice a principal
amount of Bonds of Senior Note Series D equal to the principal amount of Senior
Notes due 2017 to be redeemed, at a redemption price equal to the principal
amount of such Bonds of Senior Note Series D to be redeemed, plus a premium
equal to the premium payable on the redemption of such Senior Notes due 2017,
plus accrued interest to such redemption date.
(c) In the event the principal of all Senior Notes is declared due and
payable pursuant to Section 8.01(a) of the Senior Note Indenture, the Bonds of
Senior Note Series C and the Bonds of Senior Note Series D shall be redeemable
in whole upon receipt by the Trustee of a written demand (hereinafter called a
"Redemption Demand") from the Senior Note Trustee stating that there has been
such declaration, stating that it is acting pursuant to the authorization
granted by Section 8.01(a) of the Senior Note Indenture, and demanding
redemption of all Senior Note First Mortgage Bonds on a date specified in such
Redemption Demand (the "Demand Redemption Date"), which date shall not be less
than 10 days nor more than 35 days after the date of the Redemption Demand. The
Trustee shall, within 3 days after receiving such Redemption Demand, mail a copy
thereof to the Company marked to indicate the date of its receipt by the
Trustee. Upon receipt by the Company of such copy of a Redemption Demand, the
Bonds of Senior Note Series C and the Bonds of Senior Note Series D shall be
redeemed by the Company on the Demand Redemption Date, upon surrender thereof by
the Senior Note Trustee to the Trustee, at a redemption price equal to the
principal amount thereof, plus accrued interest to the Demand Redemption Date.
If a Redemption Demand is rescinded by the Senior Note Trustee by written notice
to the Trustee prior to the Demand Redemption Date, the Company shall not be
obligated to redeem the Bonds of Senior Note Series C or the Bonds of Senior
Note Series D on the Demand Redemption Date; but no such rescission shall extend
to or affect any subsequent acceleration of the Senior Notes or impair any right
consequent thereon.
(d) In the event that one or more holders of Senior Notes due 2027 properly
elect to have all or a portion of the outstanding principal amount of their
Senior Notes due 2027 repurchased by the Company on July 15, 2007 in accordance
with the Senior Note Indenture so that such principal amount of Senior Notes due
2027 becomes due and payable on July 15, 2007 under the Senior Note Indenture,
then the Company shall repurchase on July 15, 2007 a principal amount of Bonds
of Senior Notes Series C equal to the principal amount of Senior Notes due 2027
to be repurchased on July 15, 2007 at a price equal to the principal amount of
such Bonds of Senior Note Series C to be repurchased, plus accrued interest to
such date.
(e) In the event that one or more holders of Senior Notes due 2017 properly
elect to have all or a portion of the outstanding principal amount of their
Senior Notes due 2017 repurchased by the Company on July 15, 2004 in accordance
with the Senior Note Indenture so that such principal amount of Senior Notes due
2017 becomes due and payable on July 15, 2004 under the Senior Note Indenture,
then the Company shall repurchase on July 15, 2004 a principal amount of Bonds
of Senior
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Notes Series D equal to the principal amount of Senior Notes due 2017 to be
repurchased on July 15, 2004 at a price equal to the principal amount of such
Bonds of Senior Note Series D to be repurchased, plus accrued interest to such
date.
SECTION 4.02. (a) The Company covenants that, for so long as any Bonds of
Senior Note Series C are outstanding, it will take appropriate action so that
Bonds of Senior Note Series C are not redeemed or purchased pursuant to the
Sinking Fund requirement provided for in Article XII of the Original Indenture.
(b) The Company covenants that, for so long as any Bonds of Senior Note
Series D are outstanding, it will take appropriate action so that Bonds of
Senior Note Series D are not redeemed or purchased pursuant to the Sinking Fund
requirement provided for in Article XII of the Original Indenture.
SECTION 4.03. Redemption or repurchase of Bonds of Senior Note Series C or
of Bonds of the Senior Note Series D shall be effected, without further notice
by the Company or the Trustee, by the payment by the Company of the applicable
redemption price specified in Section 4.01 hereof at the place specified for
payment of the principal of and interest on such bonds.
SECTION 4.04. (a) The Company covenants and agrees that, prior to the
Release Date, it will not take any action (except as required by Section 4.01(c)
hereof) that would cause the outstanding principal amount of the Bonds of Senior
Note Series C to be less than the then outstanding principal amount of the
Senior Notes due 2027.
(b) The Company covenants and agrees that, prior to the Release Date, it
will not take any action (except as required by Section 4.01(c) hereof) that
would cause the outstanding principal amount of the Bonds of Senior Note Series
D to be less than the then outstanding principal amount of the Senior Notes due
2017.
ARTICLE V.
FINANCING STATEMENT TO COMPLY WITH THE UNIFORM COMMERCIAL CODE
SECTION 5.01. The name and address of the debtor and secured party are set
forth below:
Debtor: Oklahoma Gas and Electric Company
101 North Robinson
Oklahoma City, Oklahoma 73101-3405
Secured Party: NationsBank, N.A.
of Oklahoma, Trustee
120 North Robinson Avenue
Oklahoma City, Oklahoma 73125
SECTION 5.02. Reference to Article I hereof is made for a description of
the property of the debtor covered by this Financing Statement with the same
force and effect as if incorporated in this Section at length.
11
<PAGE>
SECTION 5.03. The maturity dates and respective principal amounts of
obligations of the debtor secured and presently to be secured by the Original
Indenture and Supplemental Indentures, reference to all of which for the terms
and conditions thereof is hereby made with the same force and effect as if
incorporated herein at length, are as follows:
<TABLE>
<CAPTION>
FIRST MORTGAGE BONDS PRINCIPAL AMOUNT
- --------------------------------------------------------------- -------------------
<S> <C>
Series due January 1, 1998..................................... $ 25,000,000
Series due January 1, 1999..................................... $ 12,500,000
Series due January 1, 2002..................................... $ 40,000,000
Series due January 1, 2007..................................... $ 75,000,000
Series due November 1, 2007.................................... $ 35,000,000
Series due August 15, 2016..................................... $ 100,000,000
Pollution Control Series C..................................... $ 56,000,000
Series due December 1, 2020.................................... $ 75,000,000
Senior Note Series A........................................... $ 110,000,000
Senior Note Series B........................................... $ 110,000,000
Senior Note Series C........................................... $ 125,000,000
Senior Note Series D........................................... $ 125,000,000
</TABLE>
SECTION 5.04. This Financing Statement is hereby adopted for all of the
First Mortgage Bonds of the series mentioned above secured by the Indenture.
SECTION 5.05. The Original Indenture and the Supplemental Indentures as set
forth below were filed and recorded in each and every County in the States of
Oklahoma and Arkansas in which the Company has property:
<TABLE>
<S> <C> <C>
Original Indenture Supplemental Indenture
Dated February 1, 1945 Dated March 1, 1952
Supplemental Indenture Supplemental Indenture
Dated December 1, 1948 Dated June 1, 1955
Supplemental Indenture Supplemental Indenture
Dated June 1, 1949 Dated January 1, 1957
Supplemental Indenture Supplemental Indenture
Dated May 1, 1950 Dated June 1, 1958
Supplemental Indenture
Dated March 1, 1963.
</TABLE>
The Supplemental Indenture dated March 1, 1965, the Supplemental Indenture dated
January 1, 1967, the Supplemental Indenture dated January 1, 1968, the
Supplemental Indenture dated January 1, 1969, the Supplemental Indenture dated
January 1, 1970, the Supplemental Indenture dated January 1, 1972, the
Supplemental Indenture dated January 1, 1974, the Supplemental Indenture dated
January 1, 1975, the Supplemental Indenture dated January 1, 1976, the
Supplemental Indenture dated September 14, 1976, the Supplemental Indenture
dated January 1, 1977, the Supplemental Indenture dated November 1, 1977, the
Supplemental Indenture dated December 1, 1977, the Supplemental Indenture dated
February 1, 1980, the Supplemental Indenture dated April 15, 1982, the
Supplemental Indenture dated August 15, 1986, the Supplemental Indenture dated
March 1, 1987, the Supplemental Indenture dated November 15, 1990, the
Supplemental Indenture dated December 9, 1991 and the Supplemental Indenture
dated October 1, 1995, respectively, were each filed as a Public Service
Mortgage and recorded as a Real Estate Mortgage with the Secretary of State of
the State of Oklahoma at Oklahoma City and were each filed and recorded in each
and every county in the State of Arkansas in which the Company has property and
were filed with the Secretary of State of the State of Arkansas.
12
<PAGE>
SECTION 5.06. The property covered by this Financing Statement shall also
secure additional series of First Mortgage Bonds of the debtor which may be
issued from time to time in the future in accordance with the provisions of the
Indenture.
ARTICLE VI.
MISCELLANEOUS
SECTION 6.01. The recitals of fact herein and in the bonds (except the
Trustee's Certificate) shall be taken as statements of the Company and shall not
be construed as made by the Trustee. The Trustee makes no representations as to
the value of any of the property subjected to the lien of the Indenture, or any
part thereof, or as to the title of the Company thereto, or as to the security
afforded thereby and hereby, or as to the validity of this Supplemental Trust
Indenture and the Trustee shall incur no responsibility in respect of such
matters.
SECTION 6.02. This Supplemental Trust Indenture shall be construed in
connection with and as a part of the Indenture.
SECTION 6.03. (a) If any provision of this Supplemental Trust Indenture
limits, qualifies, or conflicts with another provision of the Indenture required
to be included in indentures qualified under the Trust Indenture Act of 1939 (as
enacted prior to the date of this Supplemental Trust Indenture) by any of the
provisions of Sections 310 to 317, inclusive, of the said Act, such required
provisions shall control.
(b) In case of any one or more of the provisions contained in this
Supplemental Trust Indenture or in the bonds issued hereunder should be invalid,
illegal, or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected, impaired, prejudiced or disturbed thereby.
SECTION 6.04. Wherever in this Supplemental Trust Indenture the word
"Indenture" is used without either prefix, "Original" or "Supplemental," such
word was used intentionally to include in its meaning both the Original
Indenture and all indentures supplemental thereto.
SECTION 6.05. Whenever in this Supplemental Trust Indenture either of the
parties hereto is named or referred to, this shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements in
this Supplemental Trust Indenture contained by or on behalf of the Company or by
or on behalf of the Trustee shall bind and inure to the benefit of the
respective successors and assigns of such parties, whether so expressed or not.
SECTION 6.06. (a) This Supplemental Trust Indenture may be simultaneously
executed in several counterparts, and all said counterparts executed and
delivered, each as an original, shall constitute but one and the same
instrument.
(b) The Table of Contents and the descriptive headings of the several
Articles of this Supplemental Trust Indenture were formulated, used and inserted
in this Supplemental Trust Indenture for convenience only and shall not be
deemed to affect the meaning or construction of any of the provisions hereof.
13
<PAGE>
IN WITNESS WHEREOF, OKLAHOMA GAS AND ELECTRIC COMPANY, an Oklahoma
corporation, party of the first part, has caused its corporate name and seal to
be hereunto affixed, and this Supplemental Trust Indenture to be signed by its
President or a Vice President, and attested by its Secretary or an Assistant
Secretary, for and in its behalf, and NationsBank, N.A., a national banking
association duly organized under the National Banking Laws of the United States
of America, as Trustee, party of the second part, to evidence its acceptance of
the trust hereby created, has caused its corporate name and seal to be hereunto
affixed, and this Supplemental Trust Indenture to be signed by its President or
a Vice President, and attested by a Vice President, for and in its behalf, all
done this 16th day of July, A.D. 1997.
OKLAHOMA GAS AND ELECTRIC COMPANY
BY A. M. Strecker, VICE PRESIDENT.
(CORPORATE SEAL)
ATTEST:
Irma B. Elliott, SECRETARY.
Executed by Oklahoma Gas and
Electric Company in presence of:
Kelly Hamilton,
Susie White, WITNESSES.
NATIONSBANK, N.A.
BY Sue Shipman, VICE PRESIDENT.
(CORPORATE SEAL)
ATTEST:
Karyn Wilson, VICE PRESIDENT.
Executed by NationsBank, N.A.
in presence of:
Gertrude Whaley,
Cheryl Cook, WITNESSES.
14
<PAGE>
STATE OF OKLAHOMA.
SS:
COUNTY OF OKLAHOMA.
Before me, a Notary Public in and for said County and State, on this 16th
day of July 1997, personally appeared A. M Strecker, to me known to be the
identical person who subscribed the name of Oklahoma Gas and Electric Company,
one of the makers thereof, to the foregoing instrument as its Vice President,
and acknowledged to me that he executed the same as his free and voluntary act
and deed and as the free and voluntary act and deed of such corporation for the
uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year first above written.
Jimmye Coachman, NOTARY PUBLIC.
(NOTARIAL SEAL)
My Commission Expires:
May 10, 1998
STATE OF OKLAHOMA.
SS:
COUNTY OF OKLAHOMA.
Before me, a Notary Public in and for said County and State, on this 16th
day of July 1997, personally appeared Sue Shipman, to me known to be the
identical person who subscribed the name of NationsBank, N.A., one of the makers
thereof, to the foregoing instrument as its Vice President, and acknowledged to
me that she executed the same as her free and voluntary act and deed and as the
free and voluntary act and deed of such national banking association for the
uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year first above written.
Shirley Kay Phinney, NOTARY PUBLIC.
(NOTARIAL SEAL)
My Commission Expires:
March 7, 1998
15
<PAGE>
SCHEDULE A
REAL PROPERTIES
IN THE STATE OF OKLAHOMA
The following described real property, situate, lying and being in the
County of Oklahoma, State of Oklahoma, to-wit:
1. Lots 14, 15, 16, and the West 12 feet of Lot 13, in SOUTH OKLAHOMA CITY
ADDITION, Oklahoma County, State of Oklahoma according to the recorded plat
thereof reserving unto the Grantor title to all oil, gas and other minerals
within and underlying the premises not heretofore reserved or conveyed.
2. All of lots 7 through 12 and the East 13 feet of Lot 13, in Block 19, of
SOUTH OKLAHOMA ADDITION, an addition to Oklahoma City, LESS AND EXCEPT, oil,
gas and other minerals heretofore reserved or conveyed of record.
3. Lots 17 through 26, both inclusive, in Block 19, of SOUTH OKLAHOMA ADDITION,
to Oklahoma City, Oklahoma County, Oklahoma, according to the recorded plat
thereof, LESS AND EXCEPT all minerals not previously conveyed or reserved of
record.
A-1
<PAGE>
SUPPLEMENTAL TRUST INDENTURE RECORDING DATA
OKLAHOMA
FILING DATE:
<TABLE>
<CAPTION>
FILED AS REAL ESTATE MORTGAGE
PUBLIC SERVICE ------------------------------
MORTGAGE NO. BOOK PAGE
---------------- --------------- -------------
<S> <C> <C> <C>
Secretary of State
Oklahoma City..................................
</TABLE>
SUPPLEMENTAL TRUST INDENTURE RECORDING DATA
ARKANSAS
FILING DATE:
<TABLE>
<CAPTION>
REAL ESTATE MORTGAGE
DOCUMENT ------------------------------
NUMBER BOOK PAGE
---------------- --------------- -------------
<S> <C> <C> <C>
Secretary of State
Little Rock....................................
Sebastian County.................................
Franklin County..................................
Logan County.....................................
Crawford County..................................
Johnson County...................................
Scott County.....................................
Washington County................................
UCC..............................................
</TABLE>
A-2
<PAGE>
Exhibit 5.01
[Letterhead of Rainey, Ross, Rice & Binns]
July 15, 1997
Oklahoma Gas and Electric Company
101 North Robinson
Oklahoma City, Oklahoma 73101
Re: $250,000,000 Principal Amount of Securities
Gentlemen:
We have examined the Form S-3 Registration Statement, dated April 5, 1996
(the "Registration Statement"), of Oklahoma Gas and Electric Company (the
"Company"), to which this opinion is an exhibit, for the registration under the
Securities Act of 1933, as amended (the "Act"), of an aggregate principal amount
of $250,000,000 of notes ("Senior Notes") issued under the Indenture, dated
October 1, 1995, as heretofore supplemented and amended by a supplemental
indenture and a new supplemental indenture for each series of Senior Notes, all
from the Company to NationsBank, N.A., as successor trustee (such Indenture, as
supplemented and as to be supplemented, is herein referred to as the "Senior
Note Indenture"), which Senior Notes are to be secured by First Mortgage Bonds
of one or more series (the "Bonds") to be issued under the Trust Indenture dated
February 1, 1945 as heretofore supplemented and amended by supplemental trust
indentures and a new supplemental trust indenture (the "New Supplemental
Indentures") for each series of Bonds all from the Company to NationsBank, N.A.,
as successor trustee (such Trust Indenture, as supplemented and as to be
supplemented, is herein referred to as the "First Mortgage Indenture"). The
Senior Notes and the Bonds which are to secure such Senior Notes are herein
referred to collectively as the "Securities". We have examined all records,
instruments, and documents which we have deemed necessary for the purpose of
this opinion, including the Registration Statement on Form S-3 under the
Securities Act of 1933, as amended, relating to the Securities to be filed by
the Company pursuant to the Act.
Based upon the foregoing and upon our general familiarity with the
properties and affairs of the Company, we are of the opinion that:
<PAGE>
1. The Company is a validly organized and legally existing corporation in
good standing under the laws of the State of Oklahoma and is authorized to
conduct and operate its business as a public utility in the State of Oklahoma.
2. The First Mortgage Indenture, other than the New Supplemental
Indentures, is a valid, legal and binding instrument of the Company.
3. The Senior Note Indenture, other than any new supplemental indentures,
is a valid, legal and binding instrument of the Company.
4. With respect to the Senior Notes, when, as and if the Senior Notes and
one or more new supplemental indentures relating thereto have been duly executed
and delivered, and the consideration for the Senior Notes duly received by the
Company, all in the manner contemplated by the said Registration Statement, and
with respect to the Bonds, when, as and if the Bonds and one or more New
Supplemental Indentures relating thereto have been duly authorized, executed,
delivered, filed and recorded as required by law, all in the manner contemplated
by the said Registration Statement, the Bonds and the Senior Notes will be
legally issued and binding obligations of the Company.
5. The statements made in the above-mentioned Registration Statement and
in the related Prospectus, purporting to be made or based upon our opinion
correctly set forth our opinion upon said respective matters.
Respectfully,
RAINEY, ROSS, RICE & BINNS
By: /s/ Hugh D. Rice
-------------------------------
<PAGE>
Oklahoma Gas and Electric Company
S E C Method of
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
Dec 31, 1992 Dec 31, 1993 Dec 31, 1994
----------------------------------------------------
<S> <C> <C> <C>
Earnings:
Net Income $ 88,293,000 $104,730,000 $113,795,000
Plus Income Taxes:
Federal & State Income Taxes 51,462,000 64,646,000 47,841,000
Federal & State Deferred Taxes 2,784,000 3,268,000 25,312,000
Investment Tax Credit (5,465,000) (5,150,000) (5,150,000)
Taxes (below the line) (1,006,000) (538,000) 203,000
Plus Fixed Charges 70,040,260 71,764,921 69,182,293
Total Earnings $206,108,260 $238,720,921 $251,183,293
Fixed Charges:
Long-term debt interest expense
and related amortization 62,137,000 61,397,000 61,226,000
Other interest expense 6,293,000 9,431,000 7,197,000
Calculated interest on
leased property 1,610,260 936,921 759,293
Total Fixed Charges $ 70,040,260 $ 71,764,921 $ 69,182,293
- --------------------------------------------------------------------------------------------
Ratio of Earnings to Fixed Charges 2.94 3.33 3.63
- --------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended
Dec 31, 1995 Dec 31, 1996 March 31, 1997
----------------------------------------------------
Earnings:
Net Income $112,544,000 $116,869,000 $116,947,000
Plus Income Taxes:
Federal & State Income Taxes 72,800,000 73,171,000 72,333,000
Federal & State Deferred Taxes (2,335,000) 2,156,000 2,754,000
Investment Tax Credit (5,150,000) (5,150,000) (5,150,000)
Taxes (below the line) 1,436,000 (515,000) (184,000)
Plus Fixed Charges 72,434,118 60,971,574 60,513,574
Total Earnings $251,729,118 $247,502,574 $247,213,574
Fixed Charges:
Long-term debt interest expense
and related amortization 63,970,000 54,141,000 53,926,000
Other interest expense 7,999,000 6,134,000 5,891,000
Calculated interest on
leased property 465,118 696,574 696,574
Total Fixed Charges $ 72,434,118 $ 60,971,574 $ 60,513,574
- --------------------------------------------------------------------------------------------
Ratio of Earnings to Fixed Charges 3.48 4.06 4.09
- --------------------------------------------------------------------------------------------
</TABLE>
