AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON February 5, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PUBLIC SERVICE COMPANY OF OKLAHOMA PSO CAPITAL I (333- )
(EXACT NAME OF REGISTRANT AS SPECIFIED PSO CAPITAL II (333- )
IN CHARTER) (EXACT NAMES OF REGISTRANTS
AS SPECIFIED IN TRUST
AGREEMENTS)
OKLAHOMA DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
73-0410895 EACH TO BE APPLIED FOR
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
212 EAST SIXTH STREET
TULSA, OKLAHOMA 74119-1212
(918) 599-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF REGISTRANTS'
PRINCIPAL EXECUTIVE OFFICES)
T.D. CHURCHWELL ROBERT B. WILLIAMS, ESQ.
PRESIDENT JORIS M. HOGAN, ESQ.
PUBLIC SERVICE COMPANY OF OKLAHOMA MILBANK, TWEED, HADLEY & MCCLOY
212 EAST SIXTH STREET 1 CHASE MANHATTAN PLAZA
TULSA, OKLAHOMA 74119-1212 NEW YORK, NEW YORK 10005
(918) 599-2000 (212) 530-5000
(NAMES, ADDRESSES, INCLUDING ZIP CODES, AND
TELEPHONE NUMBERS, INCLUDING AREA CODES, OF AGENTS
FOR SERVICE)
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: From time to time
after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933, please check
the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed
Proposed maximum
Amount maximum aggregate Amount of
Title of each class to be offering price offering registration
securities being registered registed per unit (1) price (1) fee (2)
- --------------------------- ---------- -------------- ----------- -------------
Public Service Company of
Oklahoma
Junior Subordinated
Deferrable Interest
Debentures
PSO Capital I
and II
Preferred Securities
Public Service Company of
Oklahoma
Guarantees with
respect to Preferred
Securities (3)(4)
Total $75,000,000 100% $75,000,000 $22,728
(5) (5)
(1) Estimated solely for the purpose of computing the registration fee.
(2) The amount of the registration fee has been calculated in accordance with
Rule 457(o) under the Securities Act of 1933.
(3) No separate consideration will be received for the Public Service Company of
Oklahoma Guarantees.
(4) This Registration Statement is deemed to include the rights of holders of
the Preferred Securities and the obligations of Public Service Company of
Oklahoma ("Back-Up Obligations") under (i) the Guarantees, (ii) the Junior
Subordinated Deferrable Interest Debentures (including Corresponding
Junior Subordinated Deferrable Interest Debentures), (iii) the Trust
Agreements for PSO Capital I and PSO Capital II, (iv) the Indenture and
Supplemental Indentures under which the Junior Subordinated Deferrable
Interest Debentures or Corresponding Junior Subordinated Deferrable
Interest Debentures will be issued and (v) the Expense Agreements in which
Public Service Company of Oklahoma undertakes to pay all of the expenses
of PSO Capital I and PSO Capital II, except for obligations under the
Preferred Securities, as described in this Registration Statement.
(5) Represents (a) the principal amount of the Junior Subordinated Deferrable
Interest Debentures issued at their principal amount and (b) the initial
public offering price of PSO Capital I and II Preferred Securities. No
separate consideration will be received for any Public Service Company of
Oklahoma Guarantees or Public Service Company of Oklahoma Junior
Subordinated Deferrable Interest Debentures in connection with an issuance
of Preferred Securities by PSO Capital I and II. The amount to be
registered, the proposed maximum offering price per unit and the proposed
maximum aggregate offering price for each class of securities being
registered have been omitted in accordance with General Instruction II.D.
of Form S-3.
------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- -------------------------------------------------------------------------------
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS TO WHICH IT
RELATES SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
- -------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED February 5, 1997
PROSPECTUS SUPPLEMENT
(To Prospectus dated , 1997)
3,000,000 Preferred Securities*
PSO Capital I
___% Trust Originated Preferred SecuritiesSM,
Series A ("TOPrSSM")
(liquidation preference $25 per preferred security)
guaranteed, as described herein, by
PUBLIC SERVICE COMPANY OF OKLAHOMA
---------
The ___% Trust Originated Preferred Securities, Series A
(the "Series A Preferred Securities"), offered hereby represent
undivided beneficial interests in the assets of PSO Capital I, a trust
created under the laws of the State of Delaware ("PSO Capital I").
Public Service Company of Oklahoma, an Oklahoma corporation ("PSO"),
will be the owner of all of the beneficial interests represented by
common securities of PSO Capital I ("Series A Common Securities"). The
Bank of New York is the Property Trustee of PSO Capital I. PSO Capital I
exists for the sole purpose of issuing the Series A Preferred Securities
and the Series A Common Securities and investing the proceeds thereof in
__% Junior Subordinated Deferrable
(CONTINUED ON NEXT PAGE)
---------
SEE "RISK FACTORS" BEGINNING ON PAGE S-6 OF THIS PROSPECTUS SUPPLEMENT
FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE SERIES A
PREFERRED SECURITIES INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND
UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE SERIES A PREFERRED
SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES OF SUCH DEFERRAL.
---------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------
- -------------------------------------------------------------------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE COMMISSION(1) PSO CAPITAL I(2)(3)
Per Series A Preferred
Security........... $ (2) $
Total.............. $ (2) $
(1) PSO Capital I and PSO have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See
"Underwriting."
(2) In view of the fact that the proceeds of the sale of the Series
A Preferred Securities will be used to purchase the Series A
Debentures, the Underwriting Agreement provides that PSO
will pay to the Underwriters, as compensation ("Underwriters'
Compensation") for their arranging the investment therein of
such proceeds, $______ per Series A Preferred Security;
PROVIDED, that such compensation will be $___ per Series A
Preferred Security sold to certain institutions. Accordingly,
the maximum aggregate amount of Underwriters' Compensation
will be $_________, but the actual amount of Underwriters'
Compensation will be less than such amount to the extent that
Series A Preferred Securities are sold to such institutions.
See "Underwriting."
(3) Expenses of the offering, which are payable by PSO, are
estimated to be $250,000.
------------
The Series A Preferred Securities offered hereby are offered severally by
the Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the Series A Preferred Securities will be ready for delivery in
book-entry form only through the facilities of The Depository Trust Company in
New York, New York, on or about __________, 1997, against payment therefor in
immediately available funds.
------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
INCORPORATED
SMITH BARNEY INC.
-----------
The date of this Prospectus Supplement is ____, 1997.
SM "Trust Originated Preferred Securities" and "TOPrS" are service
marks of Merrill Lynch & Co., Inc.
* Preliminary, subject to change.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE SERIES A PREFERRED SECURITIES AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY
BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
---------
(CONTINUED FROM PREVIOUS PAGE)
Interest Debentures, Series A (the "Series A Debentures") to be issued
by PSO. The Series A Debentures will mature on ________, 2037, which
date may be shortened to a date not earlier than ________, 2002. The
Series A Debentures are redeemable prior to maturity at the option of
PSO as described below. The Series A Preferred Securities will have a
preference under certain circumstances with respect to cash
distributions and amounts payable on liquidation, redemption or
otherwise over the Series A Common Securities. See "Description of
Preferred Securities--Subordination of Common Securities" in the
accompanying Prospectus.
Holders of the Series A Preferred Securities will be entitled
to receive preferential cumulative cash distributions accruing from the
date of original issuance and payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year, commencing
__________, 1997, at the annual rate of __% of the liquidation
preference of $25 per Series A Preferred Security ("Distributions").
PSO has the right to defer the payment of interest on the Series A
Debentures at any time or from time to time for one or more periods
(each, an "Extension Period"), PROVIDED that such Extension Period,
together with all previous and further extensions thereof prior to its
termination, does not exceed 20 consecutive quarters and does not
extend beyond the maturity of the Series A Debentures. Upon the
termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date (as defined herein), PSO may
elect to begin a new Extension Period subject to the requirements set
forth herein. If interest payments on the Series A Debentures are so
deferred, Distributions on the Series A Preferred Securities will also
be deferred and PSO will not be permitted, subject to certain
exceptions set forth herein, to declare or pay any cash distributions
with respect to PSO's capital stock or debt securities that rank PARI
PASSU with or junior to the Series A Debentures. During an Extension
Period, interest on the Series A Debentures will continue to accrue
(and the amount of Distributions to which holders of the Series A
Preferred Securities are entitled will accumulate at the rate of __%
per annum, compounded quarterly) and holders of Series A Preferred
Securities will be required to accrue interest income for United States
federal income tax purposes in advance of receipt of cash related to
such interest income. See "Certain Terms of the Series A
Debentures--Option to Extend Interest Payment Period" and "Certain
Federal Income Tax Considerations--Potential Extension of Interest
Payment Period and Original Issue Discount."
PSO has, through the Series A Guarantee, the Trust Agreement,
the Series A Debentures, the Indenture and the Expense Agreement (each
as defined herein), taken together, fully, irrevocably and
unconditionally guaranteed all of PSO Capital I's obligations under the
Series A Preferred Securities. The Series A Guarantee guarantees the
payment of Distributions and payments on liquidation or redemption of
the Series A Preferred Securities, but only in each case to the extent
of funds held by PSO Capital I, as described herein (the "Series A
Guarantee"). See "Description of Guarantees" in the accompanying
Prospectus. If PSO does not make interest payments on the Series A
Debentures held by PSO Capital I, PSO Capital I will have insufficient
funds to pay Distributions on the Series A Preferred Securities. The
Series A Guarantee does not cover payment of Distributions when PSO
Capital I does not have sufficient funds to pay such Distributions. In
such event, a holder of Series A Preferred Securities may have the
right to institute a legal proceeding directly against PSO to enforce
payment to such holder of the principal of or interest on the
Corresponding Junior Subordinated Debentures as described in
"Description of Preferred Securities--Enforcement of Certain Rights by
Holders of Preferred Securities" in the accompanying Prospectus. The
obligations of PSO under the Series A Guarantee and the Series A
Debentures are subordinate and junior in right of payment to all Senior
Indebtedness (as defined in "Description of Junior Subordinated
Debentures--Subordination" in the accompanying Prospectus) of PSO.
The Series A Preferred Securities are subject to mandatory
redemption, in whole or in part, upon repayment of the Series A
Debentures at maturity or their earlier redemption in an amount equal
to the amount of related Series A Debentures maturing or being redeemed
at a redemption price equal to the aggregate liquidation preference of
such Series A Preferred Securities plus accumulated and unpaid
Distributions thereon to the date of redemption. The Series A
Debentures are redeemable prior to maturity at the option of PSO (i) on
or after _________, 2002 in whole at any time or in part from time to
time, at a redemption price equal to the accrued and unpaid interest on
the Series A Debentures so redeemed to the date fixed for redemption,
plus 100% of the principal amount thereof, or (ii) at any time, in
whole (but not in part), within 90 days of the occurrence of a Special
Event (as defined herein), at a redemption price equal to the accrued
and unpaid interest on the Series A Debentures so redeemed to the date
fixed for redemption, plus 100% of the principal amount thereof, in
each case subject to the further conditions described under
"Description of Junior Subordinated Debentures--Redemption" and
"Description of Corresponding Junior Subordinated Debentures--Optional
Redemption" in the accompanying Prospectus.
At any time, PSO will have the right to terminate PSO Capital
I and, after satisfaction of liabilities to creditors of PSO Capital I
as required by applicable law, cause the Series A Debentures to be
distributed to the holders of the Series A Preferred Securities in
liquidation of PSO Capital I. See "Certain Terms of the Series A
Preferred Securities--Distribution of Series A Debentures."
The Series A Debentures are subordinate and junior in right of
payment to all Senior Indebtedness of PSO. As of December 31, 1996, PSO
had approximately $485.2 million aggregate principal amount of Senior
Indebtedness outstanding. The terms of the Series A Debentures place no
limitation on the amount of Senior Indebtedness that may be incurred by
PSO. In addition, the Series A Debentures will be effectively
subordinated to all existing and future liabilities of PSO's
subsidiaries, if any, and holders of Series A Debentures should look
only to the assets of PSO for payments on Series A Debentures. See
"Description of Junior Subordinated Debentures--Subordination" in the
accompanying Prospectus.
In the event of the termination of PSO Capital I, after
satisfaction of creditors of PSO Capital I as provided by applicable
law, the holders of the Series A Preferred Securities will be entitled
to receive a liquidation preference of $25 per Series A Preferred
Security plus accumulated and unpaid Distributions thereon to the date
of payment, which may be in the form of a distribution of such Like
Amount in Series A Debentures, subject to certain exceptions. See
"Description of Preferred Securities--Liquidation Distribution Upon
Termination" in the accompanying Prospectus.
Application will be made to list the Series A Preferred
Securities on the New York Stock Exchange (the "NYSE") under the symbol
"_______". Trading of the Series A Preferred Securities on the NYSE is
expected to commence within thirty days after the initial delivery of
the Series A Preferred Securities. If the Series A Debentures are
distributed to the holders of Series A Preferred Securities upon the
liquidation of PSO Capital I, PSO will use its best efforts to list the
Series A Debentures on the NYSE or such other stock exchanges or other
organizations, if any, on which the Series A Preferred Securities are
then listed.
The Series A Preferred Securities will be represented by one
or more global certificates registered in the name of The Depository
Trust Company ("DTC") or its nominee. Beneficial interests in the
Series A Preferred Securities will be shown on, and transfers thereof
will be effected only through, records maintained by participants in
DTC. Except as described in the accompanying Prospectus, Series A
Preferred Securities in certificated form will not be issued in
exchange for the global certificates. See "Description of Preferred
Securities--Book-entry Issuance" in the accompanying Prospectus.
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE INFORMATION CONTAINED IN THE ACCOMPANYING
PROSPECTUS. AS USED HEREIN, (I) THE "INDENTURE" MEANS THE INDENTURE, AS
AMENDED AND SUPPLEMENTED FROM TIME TO TIME, INCLUDING THE FIRST
SUPPLEMENTAL INDENTURE RELATING TO THE SERIES A DEBENTURES, BETWEEN PSO
AND THE BANK OF NEW YORK, AS TRUSTEE (THE "DEBENTURE TRUSTEE"), AND
(II) THE "TRUST AGREEMENT" MEANS THE AMENDED AND RESTATED TRUST
AGREEMENT AMONG PSO, AS DEPOSITOR, THE BANK OF NEW YORK, AS PROPERTY
TRUSTEE (THE "PROPERTY TRUSTEE"), THE BANK OF NEW YORK (DELAWARE), AS
DELAWARE TRUSTEE (THE "DELAWARE TRUSTEE"), AND THE ADMINISTRATIVE
TRUSTEES NAMED THEREIN (COLLECTIVELY, WITH THE PROPERTY TRUSTEE AND THE
DELAWARE TRUSTEE, THE "ISSUER TRUSTEES"). EACH OF THE OTHER CAPITALIZED
TERMS USED IN THIS PROSPECTUS SUPPLEMENT AND NOT OTHERWISE DEFINED IN
THIS PROSPECTUS SUPPLEMENT HAS THE MEANING SET FORTH IN THIS PROSPECTUS
SUPPLEMENT OR IN THE ACCOMPANYING PROSPECTUS.
RISK FACTORS
Prospective purchasers of the Series A Preferred Securities
should carefully review the information contained elsewhere in this
Prospectus Supplement and in the accompanying Prospectus and should
particularly consider the following matters.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES A GUARANTEE AND
THE SERIES A DEBENTURES
The obligations of PSO under the Series A Guarantee issued by
PSO for the benefit of the holders of Series A Preferred Securities are
unsecured and rank subordinate and junior in right of payment to all
Senior Indebtedness of PSO. The obligations of PSO under the Series A
Debentures are subordinate and junior in right of payment to all such
Senior Indebtedness. At December 31, 1996, the Senior Indebtedness of
PSO aggregated approximately $485.2 million. In addition, the Series A
Debentures will be effectively subordinated to all existing and future
liabilities of PSO's subsidiaries, if any, and holders of Series A
Debentures should look only to the assets of PSO for payments on the
Series A Debentures. None of the Indenture, the Series A Guarantee or
the Trust Agreement places any limitation on the amount of secured or
unsecured debt, including Senior Indebtedness, that may be incurred by
PSO. See "Description of Guarantees--Status of the Guarantees" and
"Description of Junior Subordinated Debentures--Subordination" in the
accompanying Prospectus.
The ability of PSO Capital I to pay amounts due on the Series
A Preferred Securities is solely dependent upon PSO making payments on
the Series A Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; POTENTIAL
MARKET VOLATILITY DURING EXTENSION PERIOD
PSO has the right under the Indenture to defer the payment of
interest on the Series A Debentures at any time or from time to time
for one or more Extension Periods, each of which, together with all
previous and further extensions of such Extension Period prior to its
termination, may not exceed 20 consecutive quarters and may not extend
beyond the maturity of the Series A Debentures. As a consequence of any
such election, quarterly Distributions on the Series A Preferred
Securities by PSO Capital I will be deferred (and the amount of
Distributions to which holders of the Series A Preferred Securities are
entitled will continue to accumulate at the rate of __% per annum,
compounded quarterly) during any such Extension Period. During any such
Extension Period, PSO may not, and may not permit any subsidiary of PSO
to, (i) declare, set aside or pay any dividend or distribution on, or
repurchase, redeem, or otherwise acquire or make any sinking fund
payment with respect to, any shares of PSO's capital stock or (ii) make
any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities (including other Junior
Subordinated Debentures) that rank PARI PASSU with or junior in
interest to the Series A Debentures or make any guarantee payments with
respect to the foregoing (other than (a) dividends or distributions in
shares of its capital stock or in rights to acquire shares of its
capital stock, (b) conversions into or exchanges for shares of its
capital stock, (c) redemptions, purchases or other acquisitions of
shares of its capital stock made for the purpose of an employee
incentive plan or benefit plan of PSO or any of its subsidiaries and
mandatory redemptions or sinking fund payments with respect to any
series of Preferred Stock of PSO that are subject to mandatory
redemption or sinking fund requirements, PROVIDED that the aggregate
stated value of all such series outstanding at the time of any such
payment does not exceed five percent of the aggregate of (1) the total
principal amount of all bonds or other securities representing secured
indebtedness issued or assumed by PSO and then outstanding and (2) the
capital and surplus of PSO to be stated on the books of account of PSO
after giving effect to such payment, PROVIDED, HOWEVER, that any moneys
deposited in any sinking fund and not in violation of this provision
may thereafter be applied to the purchase or redemption of such
Preferred Stock in accordance with the terms of such sinking fund
without regard to the restrictions contained in this provision, and (d)
payments under any guarantee by PSO with respect to any securities of a
subsidiary of PSO, provided that the proceeds from the issuance of such
securities were used to purchase Junior Subordinated Debentures of any
series under the Indenture). Upon the termination of any Extension
Period and the payment of all amounts then due on any Interest Payment
Date, PSO may elect to begin a new Extension Period subject to the
above requirements. Consequently, there could be multiple Extension
Periods of varying lengths throughout the term of the Series A
Debentures. See "Certain Terms of the Series A Preferred
Securities--Distributions" and "Certain Terms of the Series A
Debentures--Option to Extend Interest Payment Period."
Should an Extension Period occur, a holder of Series A
Preferred Securities must accrue interest income (as original issue
discount) on an economic accrual basis in respect of its PRO RATA share
of the Series A Debentures held by PSO Capital I for United States
federal income tax purposes. As a result, a holder of Series A
Preferred Securities will include such interest in gross income for
United States federal income tax purposes in advance of the receipt of
cash, and will not receive the cash related to such income from PSO
Capital I if the holder disposes of the Series A Preferred Securities
prior to the record date for the payment of Distributions. See "Certain
Federal Income Tax Considerations--Potential Extension of Interest
Payment Period and Original Issue Discount" and "--Sale or Redemption
of Series A Preferred Securities."
PSO has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Series A Debentures. However, should PSO elect to exercise such right
in the future, the market price of the Series A Preferred Securities is
likely to be affected. A holder that disposes of its Series A Preferred
Securities during an Extension Period, therefore, might not receive the
same return on its investment as a holder that continues to hold its
Series A Preferred Securities.
SPECIAL EVENT REDEMPTION
Upon the occurrence of a Special Event, as described in
"Description of Preferred Securities--Redemption or Exchange--Special
Event Redemption or Distribution of Corresponding Junior Subordinated
Debentures" in the accompanying Prospectus, PSO has the right to redeem
the Series A Debentures in whole (but not in part) within 90 days
following the occurrence of such Special Event and thereby cause a
mandatory redemption of the Series A Preferred Securities at the
applicable redemption price. See "Description of Preferred
Securities--Redemption or Exchange--Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus.
Under current United States federal income tax law, such a
redemption of the Series A Preferred Securities would constitute a
taxable event to the holders thereof. See "Certain Federal Income Tax
Considerations--Sale or Redemption of Series A Preferred Securities."
EXCHANGE OF SERIES A PREFERRED SECURITIES FOR SERIES A DEBENTURES
PSO will have the right at any time to terminate PSO Capital I
and, after satisfaction of liabilities to creditors of PSO Capital I as
required by applicable law, cause the Series A Debentures to be
distributed to the holders of the Series A Preferred Securities in
liquidation of PSO Capital I. See "Certain Terms of Series A Preferred
Securities--Distribution of Series A Debentures."
Under current United States federal income tax law, provided
PSO Capital I is treated as a "grantor trust" at the time of the
distribution, a distribution of the Series A Debentures upon
liquidation of PSO Capital I should not be a taxable event to holders
of the Series A Preferred Securities. However, if at the time of the
distribution, PSO Capital I were subject to United States federal
income tax with respect to income received or accrued on the Series A
Debentures, a distribution of the Series A Debentures by PSO Capital I
would be a taxable event to PSO Capital I and the holders of the Series
A Preferred Securities. See "Certain Federal Income Tax
Considerations--Distribution of Series A Debentures to Holders of
Series A Preferred Securities."
There can be no assurance as to the market prices for Series A
Preferred Securities or Series A Debentures that may be distributed in
exchange for Series A Preferred Securities if a liquidation of PSO
Capital I occurs. Accordingly, the Series A Preferred Securities that
an investor may purchase, whether pursuant to the offer made hereby or
in the secondary market, or the Series A Debentures that a holder of
Series A Preferred Securities may receive on liquidation of PSO Capital
I, may trade at a discount to the price that the investor paid to
purchase the Series A Preferred Securities offered hereby. Holders of
Series A Preferred Securities may receive Series A Debentures upon
liquidation of PSO Capital I and prospective purchasers of Series A
Preferred Securities are also making an investment decision with regard
to the Series A Debentures and should carefully review all the
information regarding the Series A Debentures contained herein. See
"Description of the Preferred Securities--Redemption or
Exchange--Special Event Redemption or Distribution of Corresponding
Junior Subordinated Debentures" and "Description of the Corresponding
Junior Subordinated Debentures--General" in the accompanying
Prospectus.
SHORTENING OF STATED MATURITY OF SERIES A DEBENTURES; MARKET PRICE
PSO will have the right at any time and from time to time to
shorten the maturity of the Series A Debentures to a date not earlier
than _______, 2002 and thereby cause the Series A Preferred Securities
to be redeemed on such earlier date. If PSO does exercise such right,
there can be no assurance that the shortening of the maturity of the
Series A Debentures will not have an effect on the market price of the
Series A Preferred Securities or Series A Debentures that may be
distributed in exchange for Series A Preferred Securities.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996
(the "Revenue Reconciliation Bill"), the revenue portion of President
Clinton's budget proposal, was introduced in the 104th Congress. If
enacted, the Revenue Reconciliation Bill generally would have treated
as equity, for federal income tax purposes, an instrument issued by a
corporation that has a maximum term of more than 20 years and that is
not shown as indebtedness on the separate balance sheet of the issuer
or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a
related instrument that is not shown as indebtedness on the issuer's
consolidated balance sheet. If such provision were applied to the
Series A Debentures, PSO would be unable to deduct interest on the
Series A Debentures. Such provision was proposed to be effective
generally for instruments issued on or after December 7, 1995. However,
on March 29, 1996, the Chairmen of the Senate Finance and House Ways
and Means Committees issued a joint statement to the effect that it was
their intention that the effective date of the President's legislative
proposals, if adopted, would be no earlier than the date of appropriate
Congressional action. Under current law, PSO believes and intends to
take the position that interest on the Series A Debentures is
deductible. Although the 104th Congress adjourned without enacting the
above-described provision of the Revenue Reconciliation Bill, there can
be no assurance that current or future legislative proposals or final
legislation will not affect the ability of PSO to deduct interest on
the Series A Debentures. Such a change could give rise to a Tax Event,
which may permit PSO to cause a redemption of the Series A Preferred
Securities before ________, 2002. See "Certain Terms of Series A
Subordinated Debentures--Redemption" in this Prospectus Supplement and
"Description of Preferred Securities--Redemption or Exchange--Special
Event Redemption or Distribution of Corresponding Junior Subordinated
Debentures" in the accompanying Prospectus. See also "Certain Federal
Income Tax Considerations--Possible Tax Law Changes."
RIGHTS UNDER THE SERIES A GUARANTEE
The Series A Guarantee will be qualified as an indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). The Bank of New York will act as the indenture trustee under the
Series A Guarantee (the "Guarantee Trustee") for the purposes of
compliance with the Trust Indenture Act and will hold the Series A
Guarantee for the benefit of the holders of the Series A Preferred
Securities. The Bank of New York also will act as Debenture Trustee for
the Series A Debentures and as Property Trustee under the Trust
Agreement. The Series A Guarantee guarantees to the holders of the
Series A Preferred Securities the following payments, to the extent not
paid by PSO Capital I: (i) any accumulated and unpaid Distributions
required to be paid on the Series A Preferred Securities, to the extent
that PSO Capital I has funds on hand available therefor, (ii) the
redemption price with respect to any Series A Preferred Securities
called for redemption to the extent that PSO Capital I has funds on
hand available therefor at the date of redemption, and (iii) upon a
voluntary or involuntary termination, winding up or liquidation of PSO
Capital I (unless the Series A Debentures are distributed to holders of
the Series A Preferred Securities), the lesser of (a) the aggregate of
the liquidation preference and all accumulated and unpaid Distributions
to the date of payment to the extent PSO Capital I has funds on hand
available therefor and (b) the amount of assets of PSO Capital I
remaining available for distribution to holders of the Series A
Preferred Securities. If PSO were to default on its obligation to pay
amounts payable under the Series A Debentures, PSO Capital I would lack
funds for the payment of Distributions or amounts payable on redemption
of the Series A Preferred Securities or otherwise, and, in such event,
holders of the Series A Preferred Securities would not be able to rely
upon the Series A Guarantee for payment of such amounts. Instead,
holders of the Series A Preferred Securities would have the limited
enforcement rights described under "Description of Preferred
Securities--Events of Default; Notice" and "--Enforcement of Certain
Rights by Holders of Preferred Securities" in the accompanying
Prospectus. See "Description of Guarantees" and "Description of
Corresponding Junior Subordinated Debentures" in the accompanying
Prospectus. The Trust Agreement provides that each holder of Series A
Preferred Securities by acceptance thereof agrees to the provisions of
the Series A Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of Series A Preferred Securities will generally have
limited voting rights relating only to the modification of the Series A
Preferred Securities and the dissolution, winding-up or liquidation of
PSO Capital I. Holders of Series A Preferred Securities will not be
entitled to vote to appoint, remove or replace the Property Trustee or
the Delaware Trustee, which voting rights are vested exclusively in the
holder of the Series A Common Securities except upon the occurrence of
certain events. The Issuer Trustees and PSO may amend the Trust
Agreement without the consent of holders of Series A Preferred
Securities to ensure that PSO Capital I will be classified for United
States federal income tax purposes as a "grantor trust," even if such
action adversely affects the interests of such holders in a material
respect. See "Description of Preferred Securities--Voting Rights;
Amendment of Trust Agreement" and "--Removal of Issuer Trustees" in the
accompanying Prospectus.
TRADING CHARACTERISTICS OF SERIES A PREFERRED SECURITIES
PSO Capital I intends to list the Series A Preferred
Securities on the NYSE. The Series A Preferred Securities may trade at
prices that do not fully reflect the value of accrued but unpaid
interest with respect to the underlying Series A Debentures. A holder
of Series A Preferred Securities that disposes of its Series A
Preferred Securities between record dates for payments of Distributions
(and consequently does not receive a Distribution from PSO Capital I
for the period prior to such disposition) will nevertheless be required
to include as ordinary income, accrued but unpaid interest on the
Series A Debentures through the date of disposition. Such holder will
recognize a capital loss to the extent the amount realized with respect
to the Series A Preferred Securities is less than its adjusted tax
basis. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax
purposes. See "Certain Federal Income Tax Considerations--Sale or
Redemption of Series A Preferred Securities."
PSO CAPITAL I
PSO Capital I is a statutory business trust created under
Delaware law pursuant to (i) a trust agreement executed by PSO, as
Depositor, The Bank of New York, as Property Trustee, The Bank of New
York (Delaware), as Delaware Trustee, and the Administrative Trustee
named therein (which trust agreement was later amended and restated in
the form of the Trust Agreement) and (ii) the filing of a certificate
of trust with the Delaware Secretary of State on January 29, 1997. PSO
Capital I's business and affairs are conducted by the Issuer Trustees:
The Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, and two individual Administrative
Trustees who are employees or officers of or affiliated with PSO. PSO
Capital I exists for the exclusive purposes of (i) issuing and selling
the Series A Preferred Securities and Series A Common Securities, (ii)
using the proceeds from the sale of Series A Preferred Securities and
the Series A Common Securities to acquire Series A Debentures issued by
PSO and (iii) engaging in only those other activities necessary,
convenient or incidental thereto. Accordingly, the Series A Debentures
will be the sole assets of PSO Capital I, and payments under the Series
A Debentures will be the sole revenue of PSO Capital I. All of the
Series A Common Securities will be owned by PSO. The Series A Common
Securities will rank PARI PASSU, and payments will be made thereon PRO
RATA, with the Series A Preferred Securities, except that upon the
occurrence and continuance of an event of default under the Trust
Agreement resulting from an Event of Default under the Indenture, the
rights of PSO as holder of the Series A Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption or
otherwise will be subordinated to the rights of the holders of the
Series A Preferred Securities. See "Description of Preferred
Securities--Subordination of Common Securities" in the accompanying
Prospectus. PSO will acquire Series A Common Securities having an
aggregate liquidation amount equal to 3% of the total capital of PSO
Capital I. PSO Capital I has a term of 45 years, but may terminate
earlier as provided in the Trust Agreement. The principal executive
office of PSO Capital I is c/o Central and South West Corporation, 1616
Woodall Rodgers Freeway, Dallas, Texas 75202, Attention: Director,
Finance, and its telephone number is (214) 777-1000. See "The Issuer
Trusts" in the accompanying Prospectus.
It is anticipated that PSO Capital I will not be subject to
the reporting requirements of the Exchange Act.
PUBLIC SERVICE COMPANY OF OKLAHOMA
Public Service Company of Oklahoma, an Oklahoma corporation,
is a public utility company engaged in the production, purchase,
transmission, distribution and sale of electricity in eastern and
southwestern Oklahoma. PSO serves approximately 473,000 retail
customers in the eastern and southwestern Oklahoma area. Central and
South West Corporation ("CSW"), a registered public utility holding
company under the Public Utility Holding Company Act of 1935, as
amended, owns all of the issued and outstanding Common Stock of PSO.
PSO's executive offices are located at 212 East Sixth Street, Tulsa,
Oklahoma 74119-1212, telephone number (918) 599-2000.
The foregoing information relating to PSO does not purport to
be comprehensive and should be read together with the financial
statements and other information contained in the Incorporated
Documents. See "Incorporation of Certain Documents by Reference" in the
accompanying Prospectus.
USE OF PROCEEDS
All of the proceeds from the sale of Series A Preferred
Securities will be invested by PSO Capital I in Series A Debentures.
The proceeds from the sale of such Series A Debentures will initially
become part of the general funds of PSO and will be used to replace or
retire, through redemption, repurchase or otherwise, one or more series
of outstanding preferred stock of PSO, or any combination thereof, to
repay all or a portion of PSO's short-term borrowings outstanding and
for other general corporate purposes, subject to applicable regulatory
requirements.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The following table sets forth PSO's ratios of earnings to
fixed charges and ratios of earnings to combined fixed charges and
preferred stock dividend requirements for the years and periods
indicated:
YEAR ENDED DECEMBER 31,
TWELVE MONTHS
ENDED
SEPTEMBER 30, 1996 1995 1994 1993 1992 1991
------------------ ---- ---- ---- ---- ----
(unaudited)
Earnings to Fixed Charges 2.58 4.32 4.03 2.78 2.95 3.33
Earnings to Combined Fixed
Charges and Preferred Stock
Dividend Requirements
(unaudited) 2.52 4.18 3.69 2.68 2.85 3.21
For computation of the foregoing ratios: (i) earnings consist
of net income plus fixed charges, federal and state income taxes,
deferred income taxes and investment tax credits and (ii) fixed charges
consist of interest on long-term debt, other interest charges, the
interest component of leases and amortization of debt discount, premium
and expense. Pretax earnings required for preferred stock dividends
were computed using the effective tax rate for the applicable year.
SELECTED FINANCIAL INFORMATION
(DOLLAR AMOUNTS IN THOUSANDS)
The selected financial data of PSO for the years ended
December 31, 1993, 1994 and 1995 and the nine-months ended September
30, 1996 set forth below were derived from and should be read in
conjunction with the financial statements and related notes of PSO
incorporated by reference in the accompanying Prospectus. The financial
statements for the three-year period ended December 31, 1995 have been
audited by Arthur Andersen LLP, independent auditors, and the reports
of Arthur Andersen LLP thereon are incorporated by reference in the
accompanying Prospectus.
Year Ended December 31,
Nine Months Ended
September 30, 1996 1995 1994 1993
------------------ ---- ---- ----
(unaudited)
Operating Revenues $579,021 $690,823 $740,496 $707,536
Operating Income 93,900 111,769 98,258 72,156
Net Income Before Cumulative
Effect of Changes in
Accounting Principles -- -- -- 40,496
Cumulative Effect in Changes
in Accounting Principles -- -- -- 6,223
Net Income 32,272 81,828 68,266 46,719
Net Utility Plant 1,292,827 1,330,376 1,304,518 1,246,938
Capitalization at
September 30, 1996
------------------
(unaudited)
Amount
Amount Actual % as Adjusted(1) %
Long-Term Debt $ 419,921 45.5% $ 419,921 42.9%
Company Obligated Mandatorily
Redeemable Preferred Securities
of Subsidiary Trust Holding
Solely Parent Junior
Subordinated Debentures (2) -- -- 74,750 7.6
Preferred Stock 19,826 2.1 0 0
Common Equity 484,171 52.4 484,171 49.5
------- ---- ------- ----
Total $ 923,918 100% $ 978,842 100%
========= ==== ========= ====
Short-Term Debt $19,560 -- $ 0 --
Long-Term Debt and Preferred
Stock Currently Maturing -- -- -- --
- ----------------------------
(1) Adjusted to give effect to the consummation of the offering of 3,000,000
Preferred Securities and the application of the estimated net proceeds
therefrom to redeem preferred stock and short-term debt.
(2) As described herein, the sole assets of PSO Capital I will consist solely
of approximately $75 million of Series A Debentures, issued by PSO to PSO
Capital I, and certain rights under the Series A Guarantee. The Series A
Debentures will bear interest at the annual rate of ___% of the principal
amount thereof and will mature on _______, 2037 which date may be shortened
to a date not earlier than ________, 2002. PSO owns all of the Series A
Common Securities of PSO Capital I.
ACCOUNTING TREATMENT
For financial reporting purposes, PSO Capital I will be
treated as a subsidiary of PSO and, accordingly, the accounts of PSO
Capital I will be included in the financial statements of PSO. The
Series A Preferred Securities will be presented as a separate line item
in the balance sheet of PSO and appropriate disclosures about the
Series A Preferred Securities, the Series A Guarantee and the Series A
Debentures will be included in the notes to the financial statements.
For financial reporting purposes, PSO will record Distributions payable
on the Series A Preferred Securities as an expense.
CERTAIN TERMS OF THE SERIES A PREFERRED SECURITIES
GENERAL
The following summary of certain terms and provisions of the
Series A Preferred Securities supplements the description of the terms
and provisions of the Preferred Securities set forth in the
accompanying Prospectus under the heading "Description of Preferred
Securities," to which description reference is hereby made. This
summary of certain terms and provisions of the Series A Preferred
Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Trust Agreement. The
form of the Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and
accompanying Prospectus is a part.
DISTRIBUTIONS
The Series A Preferred Securities represent undivided
beneficial interests in the assets of PSO Capital I, and Distributions
on each Series A Preferred Security will be payable at the annual rate
of __% of the stated liquidation preference of $25, payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each
year. Distributions will accumulate from __________, 1997, the date of
original issuance. The first Distribution payment date for the Series A
Preferred Securities will be __________, 1997. The amount of
Distributions payable for any period will be computed on the basis of a
360-day year of twelve 30-day months and, for any period shorter than a
full calendar month, on the basis of the actual number of days elapsed
in such period. In the event that any date on which Distributions are
payable on the Series A Preferred Securities is not a Business Day,
then payment of the Distributions payable on such date will be made on
the next succeeding day that is a Business Day (and without any
additional Distributions or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar
year, payment of such Distribution shall be made on the immediately
preceding Business Day, in each such case with the same force and
effect as if made on the date such payment was originally payable.
Accrued and unpaid distributions will accumulate additional
Distributions thereon ("Additional Amounts") after the payment date
therefor in an amount equal to the additional interest accrued on
interest in arrears on the Series A Debentures. See "Certain Terms of
the Series A Debentures--General." The term "Distributions" as used
herein shall include any such Additional Amounts. See "Description of
Preferred Securities--Distributions" in the accompanying Prospectus.
So long as no Event of Default under the Indenture has
occurred and is continuing, PSO has the right under the Indenture to
defer the payment of interest on the Series A Debentures at any time or
from time to time for one or more Extension Periods, each of which,
together with all previous and further extensions of such Extension
Period prior to its termination, may not exceed 20 consecutive quarters
and may not extend beyond the maturity of the Series A Debentures. As a
consequence of any such election, quarterly Distributions on the Series
A Preferred Securities will be deferred by PSO Capital I during any
such Extension Period. Distributions to which holders of the Series A
Preferred Securities are entitled will accumulate additional
Distributions thereon at the rate of __% per annum thereof, compounded
quarterly from the relevant payment date for such Distributions. During
any such Extension Period, PSO may not, and may not permit any
subsidiary of PSO to, (i) declare, set aside or pay any dividend or
distribution on, or repurchase, redeem, or otherwise acquire or make
any sinking fund payment with respect to, any shares of PSO's capital
stock or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities (including
other Junior Subordinated Debentures) that rank PARI PASSU with or
junior in interest to the Series A Debentures or make any guarantee
payments with respect to the foregoing (other than (a) dividends or
distributions in shares of its capital stock or in rights to acquire
shares of its capital stock, (b) conversions into or exchanges for
shares of its capital stock, (c) redemptions, purchases or other
acquisitions of shares of its capital stock made for the purpose of an
employee incentive plan or benefit plan of PSO or any of its
subsidiaries and mandatory redemptions or sinking fund payments with
respect to any series of Preferred Stock of PSO that are subject to
mandatory redemption or sinking fund requirements, PROVIDED that the
aggregate stated value of all such series outstanding at the time of
any such payment does not exceed five percent of the aggregate of (1)
the total principal amount of all bonds or other securities
representing secured indebtedness issued or assumed by PSO and then
outstanding and (2) the capital and surplus of PSO to be stated on the
books of account of PSO after giving effect to such payment, PROVIDED,
HOWEVER, that any moneys deposited in any sinking fund and not in
violation of this provision may thereafter be applied to the purchase
or redemption of such Preferred Stock in accordance with the terms of
such sinking fund without regard to the restrictions contained in this
provision, and (d) payments under any guarantee by PSO with respect to
any securities of a subsidiary of PSO, provided that the proceeds from
the issuance of such securities were used to purchase Junior
Subordinated Debentures of any series under the Indenture). Upon the
termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date, PSO may elect to begin a new
Extension Period, subject to the above requirements. See "Certain Terms
of the Series A Debentures--Option to Extend Interest Payment Period"
and "Certain Federal Income Tax Considerations--Potential Extension of
Interest Payment Period and Original Issue Discount."
PSO has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Series A Debentures.
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the
Series A Debentures, whether at maturity or upon earlier redemption as
provided in the Indenture, the proceeds from such repayment or
redemption shall be applied by the Property Trustee to redeem a Like
Amount of the Series A Preferred Securities, upon not less than 30 nor
more than 60 days notice prior to the date fixed for repayment or
redemption (the "Redemption Date"), at a redemption price equal to the
aggregate liquidation preference of such Series A Preferred Securities
plus accumulated and unpaid Distributions thereon to the Redemption
Date (the "Redemption Price"). See "Description of Preferred
Securities--Redemption or Exchange" in the accompanying Prospectus and
"Certain Terms of the Series A Debentures--Redemption."
PSO will have the right to redeem the Series A Debentures (i)
on or after _______, 2002 in whole at any time or in part from time to
time, at a redemption price equal to the accrued and unpaid interest on
the Series A Debentures so redeemed to the date fixed for redemption,
plus 100% of the principal amount thereof or (ii) in whole (but not in
part), within 90 days following the occurrence of a Tax Event or an
Investment Company Event (each as defined in the accompanying
Prospectus, and as so collectively defined, a "Special Event"), at a
redemption price equal to the accrued and unpaid interest on the Series
A Debentures so redeemed to the date fixed for redemption, plus 100% of
the principal amount thereof, in each case subject to conditions
described under "Description of Junior Subordinated
Debentures--Redemption or Exchange" and "Description of Corresponding
Junior Subordinated Debentures--Optional Redemption" in the
accompanying Prospectus.
DISTRIBUTION OF SERIES A DEBENTURES
At any time, PSO will have the right to terminate PSO Capital
I and, after satisfaction of the liabilities of creditors of PSO
Capital I as provided by applicable law, cause the Series A Debentures
to be distributed to the holders of the Series A Preferred Securities
in liquidation of PSO Capital I. See "Certain Terms of the Series A
Debentures--Distribution of Series A Debentures." If such a
distribution should occur, PSO would continue to have the right to
shorten the maturity of the Series A Debentures, subject to certain
conditions as described under "Certain Terms of the Series A Debentures
- General." Under current United States federal income tax law,
provided PSO Capital I is treated as a "grantor trust" at the time of
such distribution, such distribution should not be a taxable event to
PSO Capital I or to holders of the Series A Preferred Securities. If
there were an occurrence of a Special Event pursuant to which PSO
Capital I was determined to be an association taxable as a corporation,
however, such a distribution would be a taxable event to PSO Capital I
and to such holders. See "Certain Federal Income Tax
Considerations--Distribution of Series A Debentures to Holders of
Series A Preferred Securities." If PSO does not elect to redeem or
distribute the Series A Debentures as described above, the Series A
Preferred Securities will remain outstanding until the repayment of the
Series A Debentures.
LIQUIDATION VALUE
The amount payable on the Series A Preferred Securities in the
event of any liquidation of PSO Capital I is $25 per Series A Preferred
Security plus accumulated and unpaid Distributions, which may be in the
form of a distribution of a Like Amount in Series A Debentures, subject
to certain exceptions. See "Description of Preferred
Securities--Liquidation Distribution Upon Termination" in the
accompanying Prospectus.
CERTAIN TERMS OF THE SERIES A DEBENTURES
GENERAL
The following summary of certain terms and provisions of the
Series A Debentures supplements the description of the terms and
provisions of the Corresponding Junior Subordinated Debentures set
forth in the accompanying Prospectus under the headings "Description of
Junior Subordinated Debentures" and "Description of Corresponding
Junior Subordinated Debentures," to which description reference is
hereby made. The summary of certain terms and provisions of the Series
A Debentures set forth below does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the
Indenture. The Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and
accompanying Prospectus is a part.
Concurrently with the issuance of the Series A Preferred
Securities, PSO Capital I will invest the proceeds thereof and the
consideration paid by PSO for the Series A Common Securities in the
Series A Debentures issued by PSO. The Series A Debentures will bear
interest at the annual rate of __% of the principal amount thereof,
payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year (each, an "Interest Payment Date"), commencing
_______, 1997, to the person in whose name each Series A Debenture is
registered, subject to certain exceptions, at the close of business on
the fifteenth day of the month immediately preceding the Interest
Payment Date.
It is anticipated that, until the liquidation, if any, of PSO
Capital I, each Series A Debenture will be held in the name of the
Property Trustee in trust for the benefit of the holders of the Series
A Preferred Securities. The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months
and, for any period shorter than a full calendar month, on the basis of
the actual number of days elapsed in such period. In the event that any
date on which interest is payable on the Series A Debentures is not a
Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day is in the next succeeding calendar year, payment of
such Distribution shall be made on the immediately preceding Business
Day, in each such case with the same force and effect as if made on the
date such payment was originally payable. Accrued interest that is not
paid on the applicable Interest Payment Date will bear additional
interest on the amount thereof (to the extent permitted by law) at the
rate per annum of __% thereof, compounded quarterly. The term
"interest" as used herein shall include quarterly interest payments,
interest on quarterly interest payments not paid on the applicable
Interest Payment Date and Additional Sums (as defined below), as
applicable.
The Series A Debentures will be issued as a series of Junior
Subordinated Debentures under the Indenture. The Series A Debentures
will mature on _____, 2037, which date may be shortened at any time and
from time to time at the election of PSO, but in no event to a date
earlier than _______, 2002 (such date, as it may be shortened, the
"Maturity Date"), provided, however, that, if PSO exercises its right
to liquidate PSO Capital I and distribute the Series A Debentures to
holders in exchange for the Series A Preferred Securities, effective
upon such exercise the Maturity Date of the Series A Debentures may be
changed to any date elected by PSO that is (i) no earlier than the date
five years after the initial issuance of the Series A Preferred
Securities and (ii) no later than ______, 2037. The Series A Debentures
will be unsecured and will rank junior and be subordinate in right of
payment to all Senior Indebtedness of PSO. In addition, the Series A
Debentures will be effectively subordinated to all existing and future
liabilities of PSO's subsidiaries, and holders of Series A Debentures
should look only to the assets of PSO for payments on the Series A
Debentures. PSO currently has no subsidiaries. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of
PSO, whether under the Indenture, any other existing or other indenture
that PSO may enter into in the future or otherwise. See "Description of
Junior Subordinated Debentures--Subordination" in the accompanying
Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Event of Default under the Indenture has
occurred and is continuing, PSO has the right under the Indenture at
any time during the term of the Series A Debentures to defer the
payment of interest at any time or from time to time for one or more
Extension Periods, each of which, together with all previous and
further extensions of such Extension Period prior to its termination,
may not exceed 20 consecutive quarters and may not extend beyond the
maturity of the Series A Debentures. At the end of such Extension
Period, PSO must pay all interest then accrued and unpaid (together
with interest thereon at the annual rate of __%, compounded quarterly,
to the extent permitted by applicable law). During an Extension Period,
interest will continue to accrue and holders of Series A Debentures (or
holders of Series A Preferred Securities while such series is
outstanding) will be required to accrue interest income (as original
issue discount) on an economic accrual basis for United States federal
income tax purposes. See "Certain Federal Income Tax
Considerations--Potential Extension of Interest Payment Period and
Original Issue Discount."
During any such Extension Period, PSO may not, and may not
permit any subsidiary of PSO to, (i) declare, set aside or pay any
dividend or distribution on, or repurchase, redeem, or otherwise
acquire or make any sinking fund payment with respect to, any shares of
PSO's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including other Junior Subordinated Debentures) that rank PARI PASSU
with or junior in interest to the Series A Debentures or make any
guarantee payments with respect to the foregoing (other than (a)
dividends or distributions in shares of its capital stock or in rights
to acquire shares of its capital stock, (b) conversions into or
exchanges for shares of its capital stock, (c) redemptions, purchases
or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of PSO or any of
its subsidiaries and mandatory redemptions or sinking fund payments
with respect to any series of Preferred Stock of PSO that are subject
to mandatory redemption or sinking fund requirements, PROVIDED that the
aggregate stated value of all such series outstanding at the time of
any such payment does not exceed five percent of the aggregate of (1)
the total principal amount of all bonds or other securities
representing secured indebtedness issued or assumed by PSO and then
outstanding and (2) the capital and surplus of PSO to be stated on the
books of account of PSO after giving effect to such payment, PROVIDED,
HOWEVER, that any moneys deposited in any sinking fund and not in
violation of this provision may thereafter be applied to the purchase
or redemption of such Preferred Stock in accordance with the terms of
such sinking fund without regard to the restrictions contained in this
provision, and (d) payments under any guarantee by PSO with respect to
any securities of a subsidiary of PSO, provided that the proceeds from
the issuance of such securities were used to purchase Junior
Subordinated Debentures of any series under the Indenture). Upon the
termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date, PSO may elect to begin a new
Extension Period, subject to the above requirements. No interest shall
be due and payable during an Extension Period, except at the end
thereof. PSO must give the Administrative Trustees and the Debenture
Trustee notice of its election of such Extension Period at least one
Business Day prior to the earlier of (i) the date the Distributions on
the Series A Preferred Securities would have been payable except for
the election to begin such Extension Period and (ii) the date the
Administrative Trustees are required to give notice to the NYSE or
other applicable self-regulatory organization or to holders of such
Series A Preferred Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business
Day prior to such record date. The Administrative Trustees shall give
notice of PSO's election to begin a new Extension Period to the holders
of the Series A Preferred Securities within five Business Days of the
receipt of notice thereof. See "Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date" in the accompanying
Prospectus.
ADDITIONAL SUMS
If PSO Capital I is required to pay any additional taxes,
duties or other governmental charges as a result of a Tax Event, PSO
will pay as additional amounts on the Series A Debentures such amounts
("Additional Sums") as shall be required so that the Distributions
payable by PSO Capital I shall not be reduced as a result of any such
additional taxes, duties or other governmental charges, subject to the
conditions described under "Description of Preferred
Securities--Redemption or Exchange--Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus.
REDEMPTION
The Series A Debentures are redeemable prior to maturity at
the option of PSO (i) on or after _______, 2002, in whole at any time
or in part from time to time, at a redemption price equal to the
accrued and unpaid interest on the Series A Debentures so redeemed to
the date fixed for redemption plus 100% of the principal amount thereof
or (ii) in whole (but not in part), within 90 days of the occurrence of
a Special Event, at a redemption price equal to the accrued and unpaid
interest on the Series A Debentures so redeemed to the date fixed for
redemption, plus 100% of the principal amount thereof, in each case
subject to the further conditions described under "Description of
Junior Subordinated Debentures--Redemption" and "Description of
Corresponding Junior Subordinated Debentures--Optional Redemption" in
the accompanying Prospectus.
DISTRIBUTION OF SERIES A DEBENTURES
Under certain circumstances involving the termination of PSO
Capital I, Series A Debentures may be distributed to the holders of the
Series A Preferred Securities in liquidation of PSO Capital I after
satisfaction of liabilities to creditors of PSO Capital I as provided
by applicable law. If distributed to holders of Series A Preferred
Securities in liquidation, the Series A Debentures will initially be
issued in the form of one or more global securities and DTC, or any
successor depositary for the Series A Preferred Securities, will act as
depositary for the Series A Debentures. It is anticipated that the
depositary arrangements for the Series A Debentures would be
substantially identical to those in effect for the Series A Preferred
Securities. If the Series A Debentures are distributed to the holders
of Series A Preferred Securities upon the liquidation of PSO Capital I,
PSO will use its best efforts to list the Series A Debentures on the
NYSE or such other stock exchanges or other organizations, if any, on
which the Series A Preferred Securities are then listed. There can be
no assurance as to the market price of any Series A Debentures that may
be distributed to the holders of Series A Preferred Securities. For a
description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemption and other
notices and other matters, see "Description of Preferred
Securities--Book-entry Issuance" in the accompanying Prospectus.
REGISTRATION OF SERIES A DEBENTURES
A global security shall be exchangeable for Series A
Debentures registered in the names of persons other than DTC or its
nominee only if (i) DTC notifies PSO that it is unwilling or unable to
continue as a depositary for such global security and no successor
depositary shall have been appointed, or if at any time DTC ceases to
be a clearing agency registered under the Exchange Act, at a time when
DTC is required to be so registered to act as such depositary, (ii) PSO
in its sole discretion determines that such global security shall be so
exchangeable or (iii) the global security was issued pursuant to a
liquidation of PSO Capital I as provided in the Trust Agreement and
there shall have occurred and be continuing a Debenture Event of
Default with respect to such global security and the holders of at
least a majority of the beneficial interests in such global security
advise the Property Trustee in writing that the continuation of a
book-entry system through DTC is no longer in their best interest. Any
global security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for definitive certificates registered in such
names as DTC shall direct. It is expected that such instructions will
be based upon directions received by DTC from its Participants with
respect to ownership of beneficial interests in such global security.
In the event that Series A Debentures are issued in definitive form,
such Series A Debentures will be in denominations of $25 and integral
multiples thereof and may be transferred or exchanged at the offices
described below.
Payments on Series A Debentures represented by a global
security will be made to DTC, as the depositary for the Series A
Debentures. In the event Series A Debentures are issued in definitive
form, principal and interest will be payable, the transfer of the
Series A Debentures will be registrable, and Series A Debentures will
be exchangeable for Series A Debentures of other denominations of a
like aggregate principal amount, at the corporate office of the
Debenture Trustee in New York, New York, or at the offices of any
paying agent or transfer agent appointed by PSO, PROVIDED that payment
of interest may be made at the option of PSO by check mailed to the
address of the persons entitled thereto or by wire transfer as provided
under "Description of Junior Subordinated Debentures--Payment and
Paying Agents" in the accompanying Prospectus. In addition, if the
Series A Debentures are issued in certificated form, the record dates
for payment of interest will be the 15th day of the month in which the
relevant Interest Payment Date occurs. For a description of DTC and the
terms of the depositary arrangements relating to payments, transfers,
voting rights, redemptions and other notices and other matters, see
"Description of Preferred Securities--Book-entry Issuance" in the
accompanying Prospectus.
ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee
benefit plan subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA")(a "Plan"), should consider the fiduciary
standards of ERISA in the context of the Plan's particular
circumstances before authorizing an investment in the Series A
Preferred Securities. Accordingly, among other factors, the fiduciary
should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA and would be consistent with the
documents and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code") prohibit Plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975
of the Code (also "Plans"), from engaging in certain transactions
involving "plan assets" with persons who are "parties in interest"
under ERISA or "disqualified persons" under the Code ("Parties in
Interest") with respect to such Plan. A violation of these "prohibited
transaction" rules may result in an excise tax or other liabilities
under ERISA and/or Section 4975 of the Code for such persons, unless
exemptive relief is available under an applicable statutory or
administrative exemption. Employee benefit plans that are governmental
plans (as defined in Section 3(32) of ERISA), certain church plans (as
defined in Section 3(33) of ERISA) and foreign plans (as described in
Section 4(b)(5) of ERISA) are not subject to the requirements of ERISA
or Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by
the U.S. Department of Labor (the "DOL"), the assets of PSO Capital I
would be deemed to be "plan assets" of a Plan for purposes of ERISA and
Section 4975 of the Code if "plan assets" of the Plan were used to
acquire an equity interest in PSO Capital I and no exception were
applicable under the Plan Assets Regulation. An "equity interest" is
defined under the Plan Assets Regulation as any interest in an entity
other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets
Regulation, the assets of PSO Capital I would not be deemed to be "plan
assets" of investing Plans if, immediately after the most recent
acquisition of any equity interest in PSO Capital I, less that 25% of
the value of each class of equity interests in PSO Capital I were held
by Plans, other employee benefit plans not subject to ERISA or Section
4975 of the Code (such as governmental, church and foreign plans), and
entities holding assets deemed to be "plan assets" of any Plan
(collectively, "Benefit Plan Investors"), or if the Series A Preferred
Securities were "publicly-offered securities" for purposes of the Plan
Assets Regulation. No assurance can be given that the value of the
Series A Preferred Securities held by Benefit Plan Investors will be
less than 25% of the total value of such Series A Preferred Securities
at the completion of the initial offering or thereafter, and no
monitoring or other measures will be taken with respect to the
satisfaction of the conditions to this exception. In addition, no
assurance can be given that the Series A Preferred Securities would be
considered to be "publicly-offered securities" under the Plan Assets
Regulation. All of the Series A Common Securities will be purchased and
initially held by PSO.
Certain transactions involving PSO Capital I could be deemed
to constitute direct or indirect prohibited transactions under ERISA
and Section 4975 of the Code with respect to a Plan if the Series A
Preferred Securities were acquired with "plan assets" of such Plan and
the assets of PSO Capital I were deemed to be "plan assets" of Plans
investing in PSO Capital I. For example, if PSO is a Party in Interest
with respect to an investing Plan, extensions of credit between PSO
Capital I and PSO (as represented by the Series A Debentures and the
Guarantee) would likely be prohibited by Section 406(a)(1)(B) of ERISA
and Section 4975(c)(1)(B) of the Code, UNLESS exemptive relief were
available under an applicable administrative exemption (see below). In
addition, if PSO were considered to be a fiduciary with respect to PSO
Capital I as a result of certain powers it holds (such as the powers to
remove and replace the Property Trustee and the Administrative
Trustees), certain operations of PSO Capital I, including the optional
redemption or acceleration of the Series A Debentures, could be
considered to be prohibited transactions under Section 406(b) of ERISA
and Section 4975(c)(1)(E) of the Code. IN ORDER TO AVOID SUCH POTENTIAL
PROHIBITED TRANSACTIONS, EACH INVESTING PLAN, BY PURCHASING THE SERIES
A PREFERRED SECURITIES, WILL BE DEEMED TO HAVE DIRECTED PSO CAPITAL I
TO INVEST IN THE SERIES A DEBENTURES AND TO HAVE APPOINTED THE PROPERTY
TRUSTEE.
The DOL has issued five prohibited transaction class
exemptions ("PTCEs") that may provide exemptive relief if required for
direct or indirect prohibited transactions that may arise from the
purchase or holding of the Series A Preferred Securities if assets of
PSO Capital I were deemed to be "plan assets" of Plans investing in PSO
Capital I as described above. Those class exemptions are PTCE 96-23
(for certain transactions determined by in-house asset managers), PTCE
95-60 (for certain transactions involving insurance company general
accounts), PTCE 91-38 (for certain transactions involving bank
collective investment funds), PTCE 90-1 (for certain transactions
involving insurance company pooled separate accounts), and PTCE 84-14
(for certain transactions determined by independent qualified asset
managers).
Because the Series A Preferred Securities may be deemed to be
equity interests in PSO Capital I for purposes of applying ERISA and
Section 4975 of the Code, the Series A Preferred Securities may not be
purchased or held by any Plan, any entity whose underlying assets
include "plan assets" by reason of any Plan's investment in the entity
or any person investing "plan assets" of any Plan (each, a "Plan Asset
Entity"), UNLESS such purchaser or holder is eligible for the exemptive
relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another applicable exemption. Any purchaser or holder of the Series A
Preferred Securities or any interest therein will be deemed to have
represented by its purchase and holding thereof that it either (a) is
not a Plan or a Plan Asset Entity or (b) is eligible for the exemptive
relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another applicable exemption with respect to such purchase or holding.
If a purchaser or holder of the Series A Preferred Securities that is a
Plan or a Plan Asset Entity elects to rely on an exemption other than
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, PSO and PSO Capital I may
require a satisfactory opinion of counsel or other evidence with
respect to the availability of such exemption for such purchase and
holding.
Due to the complexity of these rules and the penalties that
may be imposed upon persons involved in nonexempt prohibited
transactions, it is particularly important that fiduciaries or other
persons considering purchasing the Series A Preferred Securities on
behalf of or with "plan assets" of any Plan consult with their counsel
regarding the potential consequences if the assets of PSO Capital I
were deemed to be "plan assets" and the availability of exemptive
relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or any other
applicable exemption.
Government plans, as defined in Section 3(32) of ERISA, are
not subject to ERISA, and are also not subject to the prohibited
transaction provisions under Section 4975 of the Code. However, state
laws or regulations governing the investment and management of the
assets of such plans may contain fiduciary and prohibited transaction
requirements similar to those under ERISA and the Code discussed above.
Accordingly, fiduciaries of governmental plans, in consultation with
their advisors, should consider the impact of their respective state
pension codes on investments in the Series A Preferred Securities, and
the considerations discussed above, to the extent applicable.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain United States
federal income tax consequences of the purchase, ownership and
disposition of Series A Preferred Securities. This summary only
addresses the tax consequences to a person acquiring Series A Preferred
Securities on their original issue at their original offering price and
that is a "United States Person" within the meaning of the Code, which
includes (i) an individual citizen or resident of the United States,
(ii) a corporation or partnership organized in or under the laws of the
United States or any state thereof or the District of Columbia or (iii)
an estate or trust specified as being a United States Person in the
Code. This summary does not address all tax consequences that may be
applicable to a United States Person that is a beneficial owner of the
Series A Preferred Securities, nor does it address the tax consequences
to (i) persons that are not United States Persons, (ii) persons subject
to special treatment under United States federal income tax law, such
as banks, insurance companies, thrift institutions, regulated
investment companies, real estate investment trusts, tax-exempt
organizations and dealers in securities or currencies, (iii) persons
that will hold Preferred Securities as part of a position in a
"straddle" or as part of a "hedging," "conversion" or other integrated
investment transaction for United States federal income tax purposes,
(iv) persons whose "functional currency" is not the United States
dollar or (v) persons that do not hold the Series A Preferred
Securities as capital assets.
The statements of law or legal conclusion set forth in this
summary constitute the opinion of Christy & Viener, special tax counsel
to PSO and PSO Capital I. This summary is based upon the Code, Treasury
Regulations, Internal Revenue Service rulings and pronouncements and
judicial decisions now in effect, all of which are subject to change at
any time. Such changes may be applied retroactively in a manner that
could cause the tax consequences to vary substantially from the
consequences described below, possibly adversely affecting a beneficial
owner of a Series A Preferred Security. In particular, legislation has
been proposed that could adversely affect PSO's ability to deduct
interest on the Series A Debentures, which would in turn permit PSO to
cause a redemption of the Series A Preferred Securities. See
"--Possible Tax Law Changes." The authorities on which this summary is
based are subject to various interpretations and it is therefore
possible that the United States federal income tax treatment of the
Series A Preferred Securities may differ from the treatment described
below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN
TAX ADVISORS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE
UNITED STATES FEDERAL TAX CONSEQUENCES OF PURCHASE, OWNERSHIP AND
DISPOSITION OF SERIES A PREFERRED SECURITIES, AS WELL AS THE EFFECT OF
ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF PSO CAPITAL I
In connection with the issuance of the Series A Preferred
Securities, Christy & Viener will render its opinion to the effect
that, under then current law and assuming compliance with the terms of
the Trust Agreement and certain other documents, and based on certain
facts and assumptions contained in such opinion, PSO Capital I will be
classified as a "grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes. As a result,
each beneficial owner of a Series A Preferred Security (a
"Securityholder") will be treated as owning an undivided beneficial
interest in the Series A Debentures.
CLASSIFICATION OF THE SERIES A DEBENTURES
Based on the advice of its counsel, PSO believes and intends
to take the position that the Series A Debentures will constitute
indebtedness for United States federal income tax purposes. No
assurance can be given that such position will not be challenged by the
Internal Revenue Service or, if challenged, that such challenge will
not be successful. By purchasing and accepting Series A Preferred
Securities, each Securityholder agrees to treat the Series A Debentures
as indebtedness and the Series A Preferred Securities as evidence of an
indirect beneficial ownership in the Series A Debentures. The remainder
of this discussion assumes that the Series A Debentures will be
classified as indebtedness of PSO for United States federal income tax
purposes.
INCOME FROM SERIES A PREFERRED SECURITIES
Each Securityholder will be required to include in gross
income its pro rata share of the interest income paid or accrued with
respect to the Series A Debentures. Such income inclusion will be in
accordance with the Securityholder's regular method of accounting
except as set forth below under "--Potential Extension of Interest
Payment Period and Original Issue Discount." Because income on the
Series A Preferred Securities will constitute interest (or original
issue discount), no amount included in income with respect to the
Series A Preferred Securities will be eligible for the
dividends-received deduction.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE
DISCOUNT
Under recently issued Treasury regulations (the
"Regulations"), a contingency that stated interest will not be timely
paid that is "remote" because of the terms of the relevant debt
instrument will be ignored in determining whether such debt instrument
is issued with original issue discount ("OID"). As a result of terms
and conditions of the Series A Debentures that prohibit certain
payments with respect to PSO's capital stock and indebtedness if PSO
elects to extend interest payment periods (see "Certain Terms of the
Series A Debentures--Option to Extend Interest Payment Period"), PSO
believes that the likelihood of its exercising its option to defer
payments is remote. Based on the foregoing, PSO believes that the
Series A Debentures will not be considered to be issued with OID at the
time of their original issuance and, accordingly, a Securityholder
should include in gross income such holder's allocable share of
interest on the Series A Debentures in accordance with such holder's
regular method of tax accounting.
Under the Regulations, if PSO exercises its option to defer
any payment of interest, the Series A Debentures would at that time be
treated as issued with OID, and all stated interest on the Series A
Debentures would thereafter be treated as OID for so long as the Series
A Debentures remained outstanding. In such event, all of a
Securityholder's taxable interest income with respect to the Series A
Debentures would be accounted for as OID on an economic-accrual basis
regardless of such holder's method of tax accounting, and actual
distributions of stated interest would not be reported as taxable
income. Consequently, a Securityholder would be required to include OID
in gross income even though PSO would not make any actual cash payments
during an Extension Period.
The Regulations have not been addressed in any rulings or
other interpretations by the Internal Revenue Service (the "IRS"), and
it is possible that the IRS could take a position contrary to the
interpretation herein.
DISTRIBUTION OF SERIES A DEBENTURES TO HOLDERS OF SERIES A PREFERRED
SECURITIES
As described under the caption "Certain Terms of the Series A
Preferred Securities--Distribution of Series A Debentures," PSO will
have the right, at any time, to liquidate PSO Capital I and cause the
Series A Debentures to be distributed to the holders of the Series A
Preferred Securities. Under current United States federal income tax
law, provided PSO Capital I is treated as a "grantor trust" at the time
of such distribution, such distribution would not be a taxable event to
Securityholders. Such a distribution would result in a Securityholder
receiving directly such Securityholder's pro rata share of the Series A
Debentures previously held indirectly through PSO Capital I, with a
holding period and aggregate tax basis equal to the holding period and
aggregate tax basis such Securityholder had in such Securityholder's
Series A Preferred Securities before such distribution.
If, however, PSO Capital I were subject to United States
federal income tax as a corporation with respect to income accrued or
received on the Series A Debentures at the time of liquidation, the
distribution of Series A Debentures to Securityholders by PSO Capital I
would be a taxable event to PSO Capital I and each Securityholder, and
each Securityholder would recognize gain or loss as if the
Securityholder had exchanged its Series A Preferred Securities for the
Series A Debentures it received upon the liquidation of PSO Capital I.
A Securityholder would accrue interest in respect of Series A
Debentures received from PSO Capital I in the manner described above
under "--Income from Series A Preferred Securities" and "--Potential
Extension of Interest Payment Period and Original Issue Discount."
SALE OR REDEMPTION OF SERIES A PREFERRED SECURITIES
A Securityholder that sells (including a redemption for cash)
Series A Preferred Securities will recognize gain or loss equal to the
difference between its adjusted tax basis in the Series A Preferred
Securities and the amount of consideration paid for such Series A
Preferred Securities (excluding the portion that represents accrued and
unpaid interest that has not yet been included in income, which portion
will constitute ordinary income). Assuming that PSO does not exercise
its option to defer payment of interest on the Series A Debentures and
the Series A Debentures are not considered issued with OID, a
Securityholder's adjusted tax basis in the Series A Preferred
Securities generally will be its initial purchase price. If PSO does
exercise its option to defer payment of interest or the Series A
Debentures are otherwise deemed to have been issued with OID, a
Securityholder's adjusted tax basis in the Series A Preferred
Securities generally will be its initial purchase price, increased by
OID previously includible in such Securityholder's gross income to the
date of disposition and decreased by Distributions or other payments
received on the Series A Preferred Securities in respect of OID. Gain
or loss on the sale of the Series A Preferred Securities generally will
be a capital gain or loss and generally will be a long-term capital
gain or loss if the Series A Preferred Securities have been held for
more than one year.
The Series A Preferred Securities may trade at a price that
does not fully reflect the value of accrued but unpaid interest with
respect to the underlying Series A Debentures. A Securityholder that
disposes of such Securityholder's Series A Preferred Securities between
record dates for payments of Distributions (and consequently does not
receive a Distribution from PSO Capital I for the period prior to such
disposition) will nevertheless be required to include as ordinary
income accrued but unpaid interest on the Series A Debentures through
the date of disposition. Such Securityholder will recognize a capital
loss on the disposition of Series A Preferred Securities to the extent
the amount realized with respect to the Series A Preferred Securities
is less than the Securityholder's adjusted tax basis in the Series A
Preferred Securities. Subject to certain limited exceptions, capital
losses cannot be applied to offset ordinary income for United States
federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest income paid and OID accrued on the
Series A Preferred Securities will be reported to Securityholders and
to the Internal Revenue Service except in the case of corporations and
other exempt Securityholders. "Backup" withholding at a rate of 31%
will apply to payments of interest to non-exempt Securityholders unless
the Securityholder furnishes its taxpayer identification number in the
manner prescribed in applicable Treasury Regulations, certifies that
such number is correct and meets certain other conditions.
Payment of proceeds from disposition of Series A Preferred
Securities to or through the United States office of a broker is
subject to information reporting and backup withholding unless the
Securityholder establishes an exemption from information reporting and
backup withholding.
Any amounts withheld from a Securityholder under the backup
withholding rules will be allowed as a refund or a credit against such
Securityholder's United States federal income tax liability, provided
the required information is furnished to the IRS.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill, the
revenue portion of President Clinton's budget proposal, was introduced
in the 104th Congress. If enacted, the Revenue Reconciliation Bill
generally would have treated as equity, for federal income tax
purposes, an instrument issued by a corporation that has a maximum term
of more than 20 years and that is not shown as indebtedness on the
separate balance sheet of the issuer or, where the instrument is issued
to a related party (other than a corporation), where the holder or some
other related party issues a related instrument that is not shown as
indebtedness on the issuer's consolidated balance sheet. The
above-described provision of the Revenue Reconciliation Bill was
proposed to be effective generally for instruments issued on or after
December 7, 1995. If the proposed provision were applied to the Series
A Debentures, PSO would be unable to deduct interest on the Series A
Debentures. However, on March 29, 1996, the Chairmen of the Senate
Finance and House Ways and Means Committees issued a joint statement to
the effect that it was their intention that the effective date of the
President's legislative proposals, if adopted, would be no earlier than
the date of appropriate Congressional action. Under current law, PSO
believes and intends to take the position that it is able to deduct
interest on the Series A Debentures. Although the 104th Congress
adjourned without enacting the above-described provision of the Revenue
Reconciliation Bill, there can be no assurance that current or future
legislative proposals or final legislation will not affect the ability
of PSO to deduct interest on the Series A Debentures. Such a change
could give rise to a Tax Event, which may permit PSO to cause a
redemption of the Series A Preferred Securities as described more fully
under "Description of Preferred Securities--Redemption or
Exchange--Special Event Redemption or Distribution of Corresponding
Junior Subordinated Debentures" in the accompanying Prospectus.
UNDERWRITING
Subject to the terms and conditions of the Underwriting
Agreement, PSO and PSO Capital I have agreed that PSO Capital I will
sell to each of the Underwriters named below, and each of such
Underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated
and Smith Barney Inc. are acting as representatives (the
"Representatives"), has severally agreed to purchase from PSO Capital I
the respective number of Series A Preferred Securities set forth
opposite its name below:
Number of
Series A
Preferred
UNDERWRITER SECURITIES
Merrill Lynch, Pierce, Fenner & Smith _________
Incorporated.........................
Goldman, Sachs & Co..................................
Morgan Stanley & Co. Incorporated....................
Smith Barney Inc.................................... _________
Total....................................... 3,000,000
Subject to the terms and conditions set forth in the
Underwriting Agreement, the Underwriters are committed to take and pay
for all such Series A Preferred Securities offered hereby, if any are
taken.
The Underwriters propose to offer the Series A Preferred
Securities in part directly to the public at the initial public
offering price set forth on the cover page of this Prospectus
Supplement and in part to certain securities dealers at such price less
a concession of $____ per Series A Preferred Security. The Underwriters
may allow, and such dealers may reallow, a concession not in excess of
$____ per Series A Preferred Security to certain brokers and dealers.
After the Series A Preferred Securities are released for sale to the
public, the offering price and other selling terms may from time to
time be varied by the Representatives.
In view of the fact that the proceeds from the sale of the
Series A Preferred Securities will be used to purchase the Series A
Debentures issued by PSO, the Underwriting Agreement provides that PSO
will pay as Underwriters' Compensation for the Underwriters arranging
the investment therein of such proceeds an amount of $____ per Series A
Preferred Security ($____ per Series A Preferred Security sold to
certain institutions) for the accounts of the several Underwriters.
PSO and PSO Capital I have agreed that, during the period
beginning from the date of the Underwriting Agreement and continuing to
and including the earlier of (i) the termination of trading
restrictions on the Series A Preferred Securities, as determined by the
Underwriters, and (ii) 30 days after the closing date, they will not
offer, sell, contract to sell or otherwise dispose of any Preferred
Securities, any other beneficial interests in the assets of PSO Capital
I, or any preferred securities or any other securities of PSO Capital I
or PSO which are substantially similar to the Series A Preferred
Securities, including any guarantee of such securities, or any
securities convertible into or exchangeable for or that represent the
right to receive securities, preferred securities or any such
substantially similar securities of either PSO Capital I or PSO,
without the prior written consent of the Representatives, except for
the Series A Preferred Securities and the Series A Guarantee offered in
connection with the offering.
Prior to this offering, there has been no public market for
the Series A Preferred Securities. The Series A Preferred Securities
will be listed on the NYSE under the symbol "______". Trading of the
Series A Preferred Securities on the NYSE is expected to commence
within thirty days after the initial delivery of the Series A Preferred
Securities. In order to meet one of the requirements for listing the
Series A Preferred Securities on the NYSE, the Underwriters will
undertake to sell lots of 100 or more Series A Preferred Securities to
a minimum of 400 beneficial holders. Trading of the Series A Preferred
Securities on the NYSE is expected to commence within a seven-day
period after the initial delivery of the Series A Preferred Securities.
The Representatives have advised PSO that they intend to make a market
in the Series A Preferred Securities prior to commencement of trading
on the NYSE, but are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Series A Preferred Securities.
PSO and PSO Capital I have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended, or to contribute to payments
the Underwriters may be required to make in respect thereof.
Certain of the Underwriters or their affiliates have provided
from time to time, and expect to provide in the future, investment or
commercial banking services to PSO and its affiliates, for which such
Underwriters or their affiliates have received or will receive
customary fees and commissions.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of
the Series A Preferred Securities, the enforceability of the Trust
Agreement and the creation of PSO Capital I will be passed upon by
Richards, Layton & Finger, special Delaware counsel to PSO and PSO
Capital I. The validity of the Series A Guarantee and the Series A
Debentures will be passed upon for PSO by Milbank, Tweed, Hadley &
McCloy, New York, New York, and for the Underwriters by Sidley &
Austin, Chicago, Illinois. Sidley & Austin has from time to time
represented CSW and certain of its affiliates, including PSO, in
connection with certain matters. All matters of Oklahoma law will be
passed upon by Doerner, Saunders, Daniel & Anderson, Tulsa, Oklahoma.
Certain matters relating to United States federal income tax
considerations will be passed upon by Christy & Viener, New York, New
York, special tax counsel to PSO and PSO Capital I.
(THIS PAGE INTENTIONALLY LEFT BLANK)
===============================================================================
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such jurisdiction.
===============================================================================
SUBJECT TO COMPLETION, DATED February 5, 1997
PROSPECTUS $75,000,000
PUBLIC SERVICE COMPANY OF OKLAHOMA
JUNIOR SUBORDINATED DEBENTURES
------------------
PSO CAPITAL I
PSO CAPITAL II
PREFERRED SECURITIES
GUARANTEED, AS DESCRIBED HEREIN, BY
PUBLIC SERVICE COMPANY OF OKLAHOMA
------------------
Public Service Company of Oklahoma, an Oklahoma corporation ("PSO"),
may from time to time offer in one or more series or issuances its junior
subordinated deferrable interest debentures (the "Junior Subordinated
Debentures"). The Junior Subordinated Debentures will be unsecured and
subordinate and junior in right of payment to Senior Indebtedness (as defined
herein) of PSO. See "Description of the Junior Subordinated
Debentures--Subordination." If provided in a related prospectus supplement
accompanying this Prospectus (the "Prospectus Supplement"), PSO will have the
right to defer payments of interest on any series of Junior Subordinated
Debentures at any time or from time to time for such number of consecutive
interest payment periods (which shall not extend beyond the maturity of the
Junior Subordinated Debentures) with respect to each deferral period as may be
specified in the Prospectus Supplement (each, an "Extension Period"). See
"Description of Junior Subordinated Debentures--Option to Extend Interest
Payments" and "--Certain Covenants of PSO."
PSO Capital I and PSO Capital II, each a statutory business trust
created under the laws of the State of Delaware (each, an "Issuer Trust," and
collectively, the "Issuer Trusts"), may severally offer, from time to time,
their respective preferred securities (the "Preferred Securities") representing
preferred undivided beneficial interests in the assets of each Issuer Trust. PSO
will be the owner of the common securities (the "Common Securities")
representing common undivided beneficial interests in the assets of each Issuer
Trust. The payment of periodic cash distributions ("Distributions") with respect
to Preferred Securities of each Issuer Trust, and payments on liquidation or
redemption with respect to such Preferred Securities are each guaranteed by PSO
as described herein (each, a "Guarantee," and collectively, the "Guarantees").
See "Description of Guarantees." PSO's obligations under each Guarantee will be
subordinate and junior in right of payment to all Senior Indebtedness of PSO.
Concurrently with the issuance by an Issuer Trust of its Preferred Securities,
such Issuer Trust will invest the proceeds thereof and any contributions made
(CONTINUED ON NEXT PAGE)
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997
(CONTINUED FROM PREVIOUS PAGE)
by PSO in respect of PSO's purchase of the Common Securities in a corresponding
series of Junior Subordinated Debentures (the "Corresponding Junior Subordinated
Debentures") with terms corresponding to the terms of such Issuer Trust's
Preferred Securities. The Corresponding Junior Subordinated Debentures will be
the sole assets of each Issuer Trust, and payments under the Corresponding
Junior Subordinated Debentures and the related Expense Agreement (as defined
herein) will be the only revenue of each Issuer Trust. PSO may redeem the
Corresponding Junior Subordinated Debentures (and cause the redemption of the
related Preferred Securities) or may terminate each Issuer Trust at any time and
cause the Corresponding Junior Subordinated Debentures to be distributed to the
holders of Preferred Securities in liquidation of their interests in such Issuer
Trust. See "Description of Preferred Securities--Liquidation Distribution Upon
Termination."
Holders of the Preferred Securities will be entitled to receive
preferential cumulative cash Distributions accumulating from the date of
original issuance and payable periodically as specified in the related
Prospectus Supplement. If provided in the related Prospectus Supplement, PSO
will have the right to defer payments of interest on any series of Junior
Subordinated Debentures at any time or from time to time for one or more
Extension Periods (which shall not extend beyond the maturity of such Junior
Subordinated Debentures). If Corresponding Junior Subordinated Debentures are
issued and interest payments on such Corresponding Junior Subordinated
Debentures are so deferred, Distributions on the related series of Preferred
Securities will also be deferred and PSO will not be permitted, subject to
certain exceptions set forth herein, to declare, set aside or pay any cash
distributions with respect to PSO's capital stock or debt securities that rank
PARI PASSU with or junior to the Corresponding Junior Subordinated Debentures.
During an Extension Period, interest on the Corresponding Junior Subordinated
Debentures will continue to accrue (and the amount of Distributions to which
holders of Preferred Securities are entitled will accumulate) at the rate per
annum set forth in the related Prospectus Supplement. See "Description of Junior
Subordinated Debentures--Option to Extend Interest Payment Date" and "--Certain
Covenants of PSO" and "Description of Preferred Securities--Distributions."
The Junior Subordinated Debentures and the Preferred Securities (the
"Offered Securities") may be offered in amounts, at prices and on terms to be
determined at the time of offering, PROVIDED that the aggregate initial public
offering price of all Junior Subordinated Debentures (other than Corresponding
Junior Subordinated Debentures) and Preferred Securities shall not exceed
$75,000,000. Certain specific terms of the Offered Securities will be described
in the Prospectus Supplement, including, without limitation and where applicable
and to the extent not set forth herein: (i) in the case of Junior Subordinated
Debentures, the specific designation, aggregate principal amount, denominations,
maturity (including any provision for shortening thereof), interest payment
dates, interest rate (which may be fixed or variable) or method of calculating
interest, if any, applicable Extension Period or interest deferral terms, if
any, place or places where principal, premium, if any, and interest, if any,
will be payable, terms of redemption, if any, sinking fund provisions, if any,
terms for conversion or exchange, if any, into other securities, the initial
offering or purchase price, methods of distribution and any other special terms;
and (ii) in the case of Preferred Securities, the identity of the Issuer Trust,
specific title, aggregate amount, stated liquidation preference, distribution
rate or the method of calculating such rate, applicable Extension Period or
Distribution deferral terms, if any, dates on which and place or places where
Distributions will be payable, voting rights, any redemption provisions, terms
for any conversion or exchange into other securities, initial offering or
purchase price, methods of distribution, and any other special terms.
The Prospectus Supplement will also contain information, as applicable,
concerning certain United States federal income tax considerations relating to
the Offered Securities.
The Offered Securities may be sold directly by PSO, PSO Capital I
and/or PSO Capital II, as the case may be (each, an "Issuer"), through agents
designated from time to time or through underwriters or dealers. See "Plan of
Distribution." If any agents of an Issuer or underwriters are involved in the
sale of any Offered Securities in respect of which this Prospectus is being
delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in a Prospectus Supplement. The net
proceeds to an Issuer or Issuers, as the case may be, from such sale also will
be set forth in a Prospectus Supplement or Prospectus Supplements. The
Prospectus Supplement will state whether the Offered Securities will be listed
on any national securities exchange or the Nasdaq National Market. If the
Offered Securities are not listed on any national securities exchange or the
Nasdaq National Market, there can be no assurance that there will be a liquid
secondary market for such Offered Securities.
This Prospectus may not be used to consummate sales of Offered
Securities unless accompanied by a Prospectus Supplement relating to such
Offered Securities.
AVAILABLE INFORMATION
PSO is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information (including
proxy and information statements) filed by PSO can be inspected and copied at
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at the following Regional Offices
of the Commission: New York Regional Office, 7 World Trade Center, 13th Floor,
New York, New York 10048, and Chicago Regional Office, Citicorp Center, 500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of the prescribed rates. The
Commission also maintains a web site (http://www.sec.gov.) that contains
reports, proxy statements and other information regarding PSO.
PSO and the Issuer Trusts have filed with the Commission a joint
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in such
Registration Statement and the exhibits thereto, certain portions of which have
been omitted as permitted by the rules and regulations of the Commission. For
further information with respect to PSO, the Issuer Trusts and the Offered
Securities, reference is hereby made to such Registration Statement, including
the exhibits thereto, which may be examined at the Commission's principal
office, 450 Fifth Street, N.W., Washington, D.C. 20549 or through the
Commission's home page on the Internet, or copies of which may be obtained from
the Commission at such office upon payment of the fees prescribed by the
Commission. Statements made in this Prospectus concerning the contents of any
documents referred to herein are not necessarily complete, and in each instance
are qualified in all respects by reference to the copy of such document filed as
an exhibit to the Registration Statement.
No separate financial statements of the Issuer Trusts have been
included herein. PSO and the Issuer Trusts do not consider that such financial
statements would be material to holders of Preferred Securities offered hereby
because each Issuer Trust is a newly formed special purpose entity, has no
operating history, has no independent operations and is not engaged in, and does
not propose to engage in, any activity other than as set forth below.
Furthermore, taken together, PSO's obligations under each series of
Corresponding Junior Subordinated Debentures, the Indenture, the related Trust
Agreement, the related Expense Agreement and the related Guarantee, provide in
the aggregate, a guarantee of Distributions and other amounts due on the related
Preferred Securities of the Issuer Trusts. See "The Issuer Trusts," "Description
of the Preferred Securities," "Description of Guarantees" and "Description of
Corresponding Junior Subordinated Debentures." In addition, PSO does not expect
that any of the Issuer Trusts will be filing reports under the Exchange Act with
the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by PSO with the Commission pursuant to
the Exchange Act are incorporated in this Prospectus by reference:
(1) PSO's Annual Report on Form 10-K for the year ended December 31,
1995;
(2) PSO's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996; and
(3) PSO's Current Reports on Form 8-K dated February 23, 1996, March 4,
1996 and June 24, 1996.
All documents filed by PSO pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents"; PROVIDED, HOWEVER, that all documents
subsequently filed by PSO pursuant to Section 13 or 14 of the Exchange Act in
each year during which the offering made by this Prospectus is in effect prior
to the filing with the Commission of PSO's Annual Report on Form 10-K covering
such year shall not be Incorporated Documents or be incorporated by reference in
this Prospectus or be a part hereof from and after such filing of such Annual
Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
PSO HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM
A COPY OF THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY
SUCH PERSON, A COPY OF ANY OR ALL OF THE INCORPORATED DOCUMENTS, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE THEREIN. REQUESTS SHOULD BE DIRECTED TO CENTRAL AND SOUTH WEST
CORPORATION, 1616 WOODALL RODGERS FREEWAY, DALLAS, TEXAS 75202, ATTENTION:
DIRECTOR, FINANCE, TELEPHONE NUMBER (214) 777-1000. THE INFORMATION RELATING TO
PSO CONTAINED IN THIS PROSPECTUS DOES NOT PURPORT TO BE COMPREHENSIVE AND SHOULD
BE READ TOGETHER WITH THE INFORMATION CONTAINED IN THE INCORPORATED DOCUMENTS.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR IN ANY PROSPECTUS SUPPLEMENT,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY OR THEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PSO OR ITS
SUBSIDIARIES SINCE THE DATE OF THIS PROSPECTUS OR THE DATE OF THE LATEST
PROSPECTUS SUPPLEMENT, AS THE CASE MAY BE.
PUBLIC SERVICE COMPANY OF OKLAHOMA
Public Service Company of Oklahoma, an Oklahoma corporation, is a
public utility company engaged in the production, purchase, transmission,
distribution and sale of electricity in eastern and southwestern Oklahoma. PSO
serves approximately 473,000 retail customers in the eastern and southwestern
Oklahoma area. Central and South West Corporation ("CSW"), a registered public
utility holding company under the Public Utility Holding Company Act of 1935, as
amended, owns all of the issued and outstanding Common Stock of PSO. PSO's
executive offices are located at 212 East Sixth Street, Tulsa, Oklahoma
74119-1212, telephone number (918) 599-2000.
The foregoing information relating to PSO does not purport to be
comprehensive and should be read together with the financial statements and
other information contained in the Incorporated Documents.
THE ISSUER TRUSTS
Each Issuer Trust is a statutory business trust created under Delaware
law pursuant to (i) a trust agreement executed by PSO, as depositor of such
Issuer Trust, the Delaware Trustee (as defined herein) of such Issuer Trust, the
Property Trustee (as defined herein) of such Issuer Trust and the Administrative
Trustees (as defined herein) of such Issuer Trust and (ii) the filing of a
certificate of trust with the Delaware Secretary of State. Each trust agreement
will be amended and restated in its entirety (each, as so amended and restated,
a "Trust Agreement") substantially in the form filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Each Trust
Agreement will be qualified as an indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). Each Issuer Trust exists for the
exclusive purposes of (i) issuing and selling its Preferred Securities and
Common Securities, (ii) using the proceeds from the sale of such Preferred
Securities and Common Securities to acquire a corresponding series of
Corresponding Junior Subordinated Debentures issued by PSO and (iii) engaging in
only those other activities necessary, convenient or incidental thereto.
Accordingly, such Corresponding Junior Subordinated Debentures will be the sole
assets of such Issuer Trust, and payments under such Corresponding Junior
Subordinated Debentures and the related Expense Agreement (as defined herein)
will be the sole source of revenue of such Issuer Trust.
All of the Common Securities of each Issuer Trust will be owned by PSO.
The Common Securities of an Issuer Trust will rank PARI PASSU, and payments will
be made thereon PRO RATA, with the Preferred Securities of such Issuer Trust,
except that upon the occurrence and continuance of an event of default under a
Trust Agreement resulting from a Debenture Event of Default (as defined herein),
the rights of PSO as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Preferred Securities of such
Issuer Trust. See "Description of Preferred Securities--Subordination of Common
Securities." PSO will acquire Common Securities having an aggregate Liquidation
Amount (as defined herein) equal to not less than 3% of the total capital of
each Issuer Trust.
Unless otherwise specified in the applicable Prospectus Supplement,
each Issuer Trust has a term of up to 45 years, but may terminate earlier as
provided in the applicable Trust Agreement. Each Issuer Trust's business and
affairs are conducted by its trustees, which will be appointed by PSO as holder
of the Common Securities.
Unless otherwise specified in the applicable Prospectus Supplement, the
trustees will be The Bank of New York, as Property Trustee, (the "Property
Trustee"), The Bank of New York (Delaware), as the Delaware Trustee (the
"Delaware Trustee"), and two individual trustees (the "Administrative Trustees")
who are employees or officers of or affiliated with PSO (collectively, the
"Issuer Trustees"). The Bank of New York, as Property Trustee, will act as sole
indenture trustee under each Trust Agreement for purposes of compliance with the
Trust Indenture Act. The Bank of New York will also act as trustee under the
Guarantee and the Indenture (each as defined herein). See "Description of
Guarantees" and "Description of Junior Subordinated Debentures." The holder of
the Common Securities, or the holders of a majority in liquidation preference of
the Preferred Securities if a Debenture Event of Default under the Trust
Agreement has occurred and is continuing, will be entitled to appoint, remove or
replace the Property Trustee and/or the Delaware Trustee. In no event will the
holders of the Preferred Securities have the right to vote to appoint, remove or
replace the Administrative Trustees; such voting rights are vested exclusively
in the holder of the Common Securities. The duties and obligations of each
Issuer Trustee are governed by the applicable Trust Agreement. PSO will pay all
fees and expenses related to each Issuer Trust and the offering of the Preferred
Securities and will pay, directly or indirectly, all ongoing costs, expenses and
liabilities of each Issuer Trust. The principal executive office of each Issuer
Trust is 212 East Sixth Street, Tulsa, Oklahoma 74119-2121; telephone number
(918) 599-2000.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, the net
proceeds to be received by PSO from the issuance and sale of the Junior
Subordinated Debentures (including Corresponding Junior Subordinated Debentures
issued to the Issuer Trusts in connection with the investment by the Issuer
Trusts of all of the proceeds from the sale of Preferred Securities) will
initially become part of the general funds of PSO and will be used to replace or
retire, through redemption, repurchase or otherwise, one or more series of
outstanding first mortgage bonds or preferred stock, or any combination thereof,
to repay all or a portion of PSO's short-term borrowings outstanding at the time
of issuance of the Offered Securities and for other general corporate purposes,
subject to applicable regulatory requirements. Reference is made to the
Incorporated Documents with respect to PSO's capital requirements and its
general financing plans. Each Issuer Trust will invest all proceeds received
from the sale of Preferred Securities in Corresponding Junior Subordinated
Debentures.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND
REQUIREMENTS
Year Ended December 31,
Twelve Months Ended
September 30, 1996 1995 1994 1993 1992 1991
------------------- ---- ---- ---- ---- ----
(unaudited)
Earnings to Fixed Charges 2.58 4.32 4.03 2.78 2.95 3.33
Earnings to Combined Fixed
Charges and Preferred
Stock Dividend
Requirements (unaudited) 2.52 4.18 3.69 2.68 2.85 3.21
For computation of the foregoing ratios: (i) earnings consist of net
income plus fixed charges, federal and state income taxes, deferred income taxes
and investment tax credits and (ii) fixed charges consist of interest on
long-term debt, other interest charges, the interest component of leases and
amortization of debt discount, premium and expense. Pretax earnings required for
preferred stock dividends were computed using the effective tax rate for the
applicable year.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures may be issued from time to time in
one or more series under an Indenture dated as of , as supplemented and amended
from time to time (the "Indenture"), between PSO and The Bank of New York, as
trustee (the "Debenture Trustee"). The Corresponding Junior Subordinated
Debentures may be issued from time to time in one or more series of
Corresponding Junior Subordinated Debentures under the Indenture between PSO and
the Debenture Trustee. PSO may issue Junior Subordinated Debentures to the
public or to institutional investors as described under "Plan of Distribution"
or Corresponding Junior Subordinated Debentures to the Issuer Trusts in
connection with the issuance of Preferred Securities. The following summary is
subject to the provisions of and is qualified by reference to the Indenture,
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and to the Trust Indenture Act. Whenever particular
provisions or defined terms in the Indenture are referred to herein or in a
Prospectus Supplement, such provisions or defined terms are incorporated herein
or therein by reference. Section and Article references used herein are
references to provisions of the Indenture unless otherwise noted. Except as
otherwise provided herein, this summary of certain terms and provisions of
Junior Subordinated Debentures is also applicable to the Corresponding Junior
Subordinated Debentures. For additional terms and provisions applicable only to
the Corresponding Junior Subordinated Debentures, see "Description of
Corresponding Junior Subordinated Debentures."
GENERAL
Each series of Junior Subordinated Debentures will rank PARI PASSU with
all other series of Junior Subordinated Debentures, will be unsecured and will
be subordinated and junior in right of payment to the extent and in the manner
set forth in the Indenture to all Senior Indebtedness (as defined below) of PSO.
See "--Subordination." As the Junior Subordinated Debentures will be issued by
PSO, the Junior Subordinated Debentures effectively will be subordinate to all
obligations of any PSO subsidiaries, and the rights of PSO's creditors,
including holders of Junior Subordinated Debentures, to participate in the
assets of such subsidiaries upon liquidation or reorganization will be junior to
the rights of the holders of all preferred stock, indebtedness and other
liabilities of such subsidiaries, which may include trade payables, obligations
to banks under credit facilities, guarantees, pledges, support arrangements,
bonds, capital leases, notes and other obligations. PSO currently has no
subsidiaries. Except as otherwise provided in the applicable Prospectus
Supplement, the Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of PSO, whether under the Indenture, any other
indenture that PSO may enter into in the future or otherwise. See
"--Subordination" and the Prospectus Supplement relating to any offering of
Preferred Securities or Junior Subordinated Debentures.
The Indenture provides that Junior Subordinated Debentures may be
issued from time to time in one or more series pursuant to an indenture
supplemental to the Indenture or a resolution of PSO's Board of Directors or an
Officer's Certificate (each, a "Supplemental Indenture"). (Section 2.01) The
Indenture does not limit the aggregate principal amount of Junior Subordinated
Debentures that may be issued thereunder. PSO's Restated Certificate of
Incorporation, as amended (the "Articles"), currently limit the amount of
unsecured debt that PSO may issue to (i) the equivalent of 20% of the total of
all secured indebtedness and total equity or (ii) as to unsecured debt maturing
in less than ten years, the equivalent of 10% of such aggregate. PSO is
currently seeking to amend its Articles to eliminate such limitations. The
Indenture does not contain any provisions that would limit the ability of PSO to
incur indebtedness or that would afford holders of Junior Subordinated
Debentures protection in the event of a highly leveraged or similar transaction
involving PSO or in the event of a change of control.
Reference is made to the Prospectus Supplement for the following terms
of the series of Junior Subordinated Debentures being offered thereby: (i) the
specific title of such Junior Subordinated Debentures; (ii) any limit on the
aggregate principal amount of such Junior Subordinated Debentures; (iii) the
date or dates on which the principal of such Junior Subordinated Debentures is
payable or the method of determination thereof (including any provision for the
shortening thereof); (iv) the rate or rates at which such Junior Subordinated
Debentures will bear interest, if any, or the manner of calculation of such rate
or rates; (v) the date or dates from which such interest shall accrue, the
interest payment dates on which such interest will be payable or the manner of
determination of such interest payment dates and the record dates for the
determination of holders to whom interest is payable on any such interest
payment dates; (vi) the right, if any, of PSO to extend or defer the interest
payment periods and the duration of such extension or deferral; (vii) the period
or periods within which, the price or prices at which and the terms and
conditions upon which such Junior Subordinated Debentures may be redeemed, in
whole or in part, at the option of PSO; (viii) the obligation, if any, of PSO to
redeem or purchase such Junior Subordinated Debentures pursuant to any sinking
fund or analogous provisions or at the option of a holder thereof and the period
or periods during which, the price or prices at which and the terms and
conditions upon which such Junior Subordinated Debentures shall be redeemed or
purchased, in whole or part, pursuant to such obligation; (ix) the form of such
Junior Subordinated Debentures; (x) if other than denominations of $25 or any
integral multiple thereof, the denominations in which such Junior Subordinated
Debentures shall be issuable; (xi) whether such Junior Subordinated Debentures
are issuable as a global security, and in such case, the identity of the
depositary; and (xii) any and all other terms with respect to such series not
inconsistent with the provisions of the Indenture. (Section 2.01)
SUBORDINATION
The Indenture provides that Junior Subordinated Debentures are
subordinate and junior in right of payment to the prior payment in full of all
Senior Indebtedness of PSO, whether outstanding on the date of such issuance of
Junior Subordinated Debentures or thereafter incurred, as provided in the
Indenture. No payment of principal of (including redemption and sinking fund
payments), or premium, if any, or interest on, the Junior Subordinated
Debentures may be made if any Senior Indebtedness is not paid when due, any
applicable grace period with respect to such default has ended and such default
has not been cured or waived, or if the maturity of any Senior Indebtedness has
been accelerated because of a default. Upon any payment or distribution of
assets to creditors upon any dissolution, winding-up, liquidation or
reorganization of PSO, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due or to become due
on all Senior Indebtedness must be paid in full before the holders of the Junior
Subordinated Debentures are entitled to receive or retain any payment. The
rights of the holders of the Junior Subordinated Debentures will be subrogated
to the rights of the holders of Senior Indebtedness to receive payments or
distributions applicable to Senior Indebtedness until all amounts owing on the
Junior Subordinated Debentures are paid in full. (Sections 14.01 to 14.04) The
Junior Subordinated Debentures effectively will also be subordinate to all
obligations of PSO's subsidiaries, if any. See "--General."
The term "Senior Indebtedness" is defined in the Indenture to mean the
principal of and premium, if any, and interest on and any other payment due
pursuant to any of the following, whether outstanding at the date of execution
of the Indenture or thereafter incurred, created or assumed:
(a) all indebtedness of PSO evidenced by notes, debentures, bonds or
other securities sold by PSO for money;
(b) all indebtedness of others of the kinds described in paragraph (a)
above assumed by or guaranteed in any manner by PSO or in effect guaranteed by
PSO through an agreement to purchase, contingent or otherwise;
(c) all renewals, extensions or refundings of indebtedness of the kinds
described in either of paragraphs (a) and (b) above; and
(d) all payments of money relating to any lease which is capitalized on
the balance sheet or consolidated balance sheet, as the case may be, of PSO or
its subsidiaries, if any, in accordance with generally accepted accounting
principles as in effect from time to time;
unless, in the case of any particular indebtedness, renewal, extension,
refunding or lease payment, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension, refunding or lease payment is not superior in
right of payment to or is PARI PASSU with the Junior Subordinated Debentures.
Such Senior Indebtedness shall continue to be Senior Indebtedness and entitled
to the benefits of the subordination provisions contained in the Indenture
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness. (Section 1.01)
The Indenture does not limit the aggregate amount of Senior
Indebtedness which may be issued. As of December 31, 1996, Senior Indebtedness
of PSO aggregated approximately $485.2 million. PSO expects from time to time to
incur additional indebtedness constituting Senior Indebtedness.
CERTAIN COVENANTS OF PSO
If there shall have occurred any event that would, with the giving of
notice or the passage of time, or both, constitute a Debenture Event of Default
under the Indenture, as described under "--Debenture Events of Default" below,
or PSO exercises its option to extend or defer the interest payment period
described in clause (vi) under "--General" above, PSO will not, until all
defaulted interest on the Junior Subordinated Debentures and all interest
accrued on the Junior Subordinated Debentures during any such extended or
deferred interest payment period and all principal and premium, if any, then due
and payable on the Junior Subordinated Debentures shall have been paid in full,
(i) declare, set aside or pay any dividend or distribution on any capital stock
of PSO, except for dividends or distributions in shares of its capital stock or
in rights to acquire shares of its capital stock, or (ii) repurchase, redeem or
otherwise acquire, or make any sinking fund payment for the purchase or
redemption of, any shares of its capital stock (except by conversion into or
exchange for shares of its capital stock and except for a redemption, purchase
or other acquisition of shares of its capital stock made for the purpose of an
employee incentive plan or benefit plan of PSO or any of its subsidiaries and
except for mandatory redemption or sinking fund payments with respect to any
series of Preferred Stock of PSO that are subject to mandatory redemption or
sinking fund requirements, PROVIDED that the aggregate stated value of all such
series outstanding at the time of any such payment does not exceed five percent
of the aggregate of (1) the total principal amount of all bonds or other
securities representing secured indebtedness issued or assumed by PSO and then
outstanding and (2) the capital and surplus of PSO to be stated on the books of
account of PSO after giving effect to such payment); PROVIDED, HOWEVER, that any
moneys deposited in any sinking fund and not in violation of this provision may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund without regard to the
restrictions contained in this provision. (Section 4.06) As of October 31, 1996,
PSO had no such series of Preferred Stock outstanding. With respect to any
issuance of Corresponding Junior Subordinated Debentures in connection with the
issuance of Preferred Securities, PSO will make certain additional covenants as
described under "Description of Corresponding Junior Subordinated Debentures."
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Each series of Junior Subordinated Debentures will be issued in
registered form and in certificated form or will be represented by one or more
global securities. If not represented by one or more global securities, Junior
Subordinated Debentures may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) or exchange, at the office of
the Registrar or at the office of any transfer agent designated by PSO for such
purpose with respect to any series of Junior Subordinated Debentures and
referred to in an applicable Prospectus Supplement, without service charge and
upon payment of any taxes and other governmental charges as described in the
Indenture. Such transfer or exchange will be effected upon the Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. (Section 2.05) If a Prospectus
Supplement refers to any transfer agent (in addition to the Registrar) initially
designated by PSO with respect to any series of Junior Subordinated Debentures,
PSO may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer agent acts,
except that PSO will be required to maintain a transfer agent in each Place of
Payment for such series. (Section 4.02) PSO may at any time designate additional
transfer agents with respect to any series of Junior Subordinated Debentures.
The Junior Subordinated Debentures may be transferred or exchanged without
service charge, other than any tax or governmental charge imposed in connection
therewith. (Section 2.05)
In the event of any redemption in part, PSO shall not be required to
(i) issue, register the transfer of or exchange any Junior Subordinated
Debenture during a period beginning at the opening of business 15 days before
any selection for redemption of Junior Subordinated Debentures of like tenor and
of the series of which such Junior Subordinated Debenture is a part, and ending
at the close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures of like tenor and of such series to be redeemed and (ii) register the
transfer of or exchange any Junior Subordinated Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Debenture being redeemed in part. (Section 2.05)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the Prospectus Supplement, payment of
principal of and premium, if any, on any Junior Subordinated Debenture will be
made only against surrender to the Paying Agent of such Junior Subordinated
Debenture. Unless otherwise indicated in the Prospectus Supplement, principal of
and premium, if any, and interest on Junior Subordinated Debentures will be
payable, subject to any applicable laws and regulations, at the office of such
Paying Agent or Paying Agents as PSO may designate from time to time, except
that at the option of PSO payments on the Junior Subordinated Debentures may be
made (i) by checks mailed by the Debenture Trustee to the holders entitled
thereto at their registered addresses as specified in the Register for such
Junior Subordinated Debentures or (ii) to a holder of $1,000,000 or more in
aggregate principal amount of such Junior Subordinated Debentures who has
delivered a written request to the Debenture Trustee at least 14 days prior to
the relevant Interest Payment Date electing to have payments made by wire
transfer to a designated account in the United States, by wire transfer of
immediately available funds to such designated account; PROVIDED that, in either
case, the payment of principal with respect to any Junior Subordinated Debenture
will be made only upon surrender of such Junior Subordinated Debenture to the
Debenture Trustee. Unless otherwise indicated in the Prospectus Supplement,
payment of interest on a Junior Subordinated Debenture on any Interest Payment
Date will be made to the person in whose name such Junior Subordinated Debenture
(or Predecessor Junior Subordinated Debenture) is registered at the close of
business on the record date for such interest payment.
(Sections 2.03 and 4.03)
The Debenture Trustee will initially act as Paying Agent with respect
to the Junior Subordinated Debentures. PSO may at any time designate additional
Paying Agents or rescind the designation of any Paying Agents or approve a
change in the office through which any Paying Agent acts, except that PSO will
be required to maintain a Paying Agent in each Place of Payment for each series
of the Junior Subordinated Debentures.
(Sections 4.02 and 4.03)
All moneys paid by PSO to a Paying Agent for the payment of the
principal of or premium, if any, or interest on any Junior Subordinated
Debenture of any series that remain unclaimed at the end of two years after such
principal, premium, if any, or interest shall have become due and payable will
be repaid to PSO and the holder of such Junior Subordinated Debenture will
thereafter look only to PSO for payment thereof. (Section 11.06)
GLOBAL DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole
or in part in the form of one or more global securities ("Global Junior
Subordinated Debentures") that will be deposited with, or on behalf of, a
depositary (the "Depositary") identified in the Prospectus Supplement relating
to such series. Global Junior Subordinated Debentures may be issued only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Junior Subordinated
Debentures represented thereby, a Global Junior Subordinated Debenture may not
be transferred except as a whole by the Depositary for such Global Junior
Subordinated Debenture to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor Depositary. (Section 2.11)
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debentures to be represented by a
Global Junior Subordinated Debenture will be described in the Prospectus
Supplement relating to such series. PSO anticipates that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the
deposit of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or its
nominee will credit on its book-entry registration and transfer system, the
respective principal amounts of the individual Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture to the accounts of
persons that have accounts with such Depositary ("Participants"). Such accounts
shall be designated by the dealers, underwriters or agents with respect to such
Junior Subordinated Debentures or by PSO if such Junior Subordinated Debentures
are offered and sold directly by PSO. Ownership of beneficial interests in a
Global Junior Subordinated Debenture will be limited to Participants or persons
that may hold interests through Participants. Ownership of beneficial interests
in such Global Junior Subordinated Debenture will be shown on, and the transfer
of that ownership will be effected only through, records maintained by the
applicable Depositary or its nominee (with respect to interests of Participants)
and the records of Participants (with respect to interests of persons who hold
through Participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Junior Subordinated Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture,
or its nominee, is the registered owner of such Global Junior Subordinated
Debenture, such Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture for all purposes under
the Indenture governing such Junior Subordinated Debentures. Except as provided
below, owners of beneficial interests in a Global Junior Subordinated Debenture
will not be entitled to have any of the individual Junior Subordinated
Debentures of the series represented by such Global Junior Subordinated
Debenture registered in their names, will not receive or be entitled to receive
physical delivery of any such Junior Subordinated Debentures of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payments of principal of, premium, if any, and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Junior Subordinated Debenture representing such Junior Subordinated
Debentures. None of PSO, the Debenture Trustee, any Paying Agent, or the
Registrar for such Junior Subordinated Debentures will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Global Junior Subordinated
Debentures representing such Junior Subordinated Debentures or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
PSO expects that the Depositary for a series of Junior Subordinated
Debentures or its nominee, upon receipt of any payment of principal, premium, if
any, or interest in respect of a permanent Global Junior Subordinated Debenture
representing any of such Junior Subordinated Debentures, immediately will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Junior
Subordinated Debenture representing such Junior Subordinated Debentures as shown
on the records of such Depositary or its nominee. PSO also expects that payments
by Participants to owners of beneficial interests in such Global Junior
Subordinated Debenture held through such Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name." Such payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if
a Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by PSO within 90 days, PSO will issue individual
Junior Subordinated Debentures of such series in exchange for the Global Junior
Subordinated Debenture representing such series of Junior Subordinated
Debentures. In addition, PSO may at any time and in its sole discretion, subject
to any limitations described in the Prospectus Supplement relating to such
Junior Subordinated Debentures, determine not to have any Junior Subordinated
Debentures of such series represented by one or more Global Junior Subordinated
Debentures and, in such event, will issue individual Junior Subordinated
Debentures of such series in exchange for the Global Junior Subordinated
Debenture representing such series of Junior Subordinated Debentures. Further,
if PSO so specifies with respect to the Junior Subordinated Debentures of a
series, an owner of a beneficial interest in a Global Junior Subordinated
Debenture representing Junior Subordinated Debentures of such series may, on
terms acceptable to PSO, the Debenture Trustee and the Depositary for such
Global Junior Subordinated Debenture, receive individual Junior Subordinated
Debentures of such series in exchange for such beneficial interest, subject to
any limitations described in the Prospectus Supplement relating to such Junior
Subordinated Debentures. In any such instance, an owner of a beneficial interest
in a Global Junior Subordinated Debenture will be entitled to physical delivery
of individual Junior Subordinated Debentures of the series represented by such
Global Junior Subordinated Debenture equal in principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures of such series so issued
will be issued in denominations, unless otherwise specified by PSO, of $25 and
integral multiples thereof. (Section 2.11)
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement,
Junior Subordinated Debentures will not be subject to any sinking fund.
The applicable Prospectus Supplement will specify the period or periods
within which, the price or prices at which and the terms and conditions upon
which the Junior Subordinated Debentures of any series may be redeemed, in whole
or in part, at the option of PSO. Junior Subordinated Debentures in
denominations larger than $25 may be redeemed in part but only in integral
multiples of $25. Except as otherwise specified in the applicable Prospectus
Supplement, the redemption price for any Junior Subordinated Debenture so
redeemed shall equal any accrued and unpaid interest thereon to the redemption
date, plus 100% of the principal amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement,
if a Debenture Tax Event (as defined below) in respect of a series of Junior
Subordinated Debentures shall occur and be continuing, PSO may, at its option,
redeem such series of Junior Subordinated Debentures in whole (but not in part)
at any time within 90 days of the occurrence of such Debenture Tax Event, at a
redemption price equal to 100% of the principal amount of such Junior
Subordinated Debentures then outstanding plus accrued and unpaid interest to the
date fixed for redemption.
"Debenture Tax Event" means the receipt by PSO of an opinion of
counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such pronouncement or
decision is announced on or after the date of issuance of the applicable series
of Junior Subordinated Debentures under the Indenture, there is more than an
insubstantial risk that interest payable by PSO on such series of Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion,
will not be, deductible by PSO, in whole or in part, for United States federal
income tax purposes.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Junior Subordinated
Debentures to be redeemed at its registered address (Section 3.02). Unless PSO
defaults in payment of the redemption price, on and after the redemption date
interest will cease to accrue on such Junior Subordinated Debentures or portions
thereof called for redemption.
OPTION TO EXTEND INTEREST PAYMENT DATE
If provided in the applicable Prospectus Supplement, PSO shall have the
right at any time or from time to time during the term of any series of Junior
Subordinated Debentures to defer the payment of interest for such number of
consecutive interest payment periods with respect to each deferred period as may
be specified in the applicable Prospectus Supplement (each, an "Extension
Period"), subject to the terms, conditions and covenants, if any, specified in
such Prospectus Supplement, provided that such Extension Period may not extend
beyond the maturity of such series of Junior Subordinated Debentures. Certain
United States federal income tax consequences and special considerations
applicable to any such Junior Subordinated Debentures will be described in the
applicable Prospectus Supplement. In the event that PSO exercises this right,
certain restrictions will be applicable to PSO as described under "--Certain
Covenants of PSO."
AGREED TAX TREATMENT
The Indenture provides that each holder of a Junior Subordinated
Debenture, each person that acquires a beneficial ownership interest in a Junior
Subordinated Debenture and PSO agree that for United States federal, state and
local tax purposes it is intended that such Junior Subordinated Debenture
constitute indebtedness.
(Section 13.12)
MODIFICATION OF INDENTURE
The Indenture contains provisions permitting PSO and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Junior Subordinated Debentures of each series which are
affected by the modification, to modify the Indenture or any supplemental
indenture affecting that series or the rights of the holders of that series of
Junior Subordinated Debentures; PROVIDED that no such modification may, without
the consent of the holder of each outstanding Junior Subordinated Debenture
affected thereby, (i) extend the fixed maturity of any Junior Subordinated
Debentures of any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof or (ii) reduce the percentage of Junior
Subordinated Debentures, the holders of which are required to consent to any
such supplemental indenture. (Section 9.02) In the case of Corresponding Junior
Subordinated Debentures, so long as any of the related series of Preferred
Securities remain outstanding, PSO will covenant in the applicable Supplemental
Indenture that no such modification may be made that adversely affects the
holders of such Preferred Securities in any material respect, and no termination
of the Indenture may occur, and no waiver of any Debenture Event of Default or
non-compliance with any covenant under the Indenture may be effective, without
the prior consent of the holders of at least a majority of the aggregate
liquidation preference of such Preferred Securities unless and until the
principal of the Corresponding Junior Subordinated Debentures and all accrued
and unpaid interest thereon have been paid in full and certain other conditions
are satisfied. See "Description of Corresponding Junior Subordinated
Debentures."
In addition, PSO and the Debenture Trustee may execute, without the
consent of any holder of Junior Subordinated Debentures (including the Junior
Subordinated Debentures being offered hereby), any supplemental indenture for
certain other usual purposes, including the creation of any new series of Junior
Subordinated Debentures. (Sections 2.01, 9.01 and 10.01)
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures, which has
occurred and is continuing, constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(a) failure for 60 days to pay interest on the Junior Subordinated
Debentures of that series when due and payable (subject to PSO's right to defer
interest payments pursuant to an Extension Period as described under "--Option
to Extend Interest Payment Date"); or
(b) failure for 3 days to pay principal of or premium, if any, on the
Junior Subordinated Debentures of that series when due whether at maturity, upon
redemption, by declaration or otherwise, or to make any sinking or analogous
fund payment if established with respect to that series; or
(c) failure to observe or perform any other covenant (other than those
specifically relating to one or more other series of Junior Subordinated
Debentures) contained in the Indenture for 90 days after notice; or
(d) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging PSO a bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation or reorganization of PSO under the
Federal Bankruptcy Code or any other similar applicable federal or state law,
and such decree or order shall have continued unvacated and unstayed for a
period of 90 days; an involuntary case shall be commenced under such Code in
respect of PSO and shall continue undismissed for a period of 90 days or an
order for relief in such case shall have been entered; or a decree or order of a
court having jurisdiction in the premises shall have been entered for the
appointment on the ground of insolvency or bankruptcy of a receiver, custodian,
liquidator, trustee or assignee in bankruptcy or insolvency of PSO or of its
property, or for the winding up or liquidation of its affairs, and such decree
or order shall have remained in force unvacated and unstayed for a period of 90
days; or
(e) PSO shall institute proceedings to be adjudicated a voluntary
bankrupt, shall consent to the filing of a bankruptcy proceeding against it,
shall file a petition or answer or consent seeking liquidation or reorganization
under the Federal Bankruptcy Code or other similar applicable federal or state
law, shall consent to the filing of any such petition or shall consent to the
appointment on the ground of insolvency or bankruptcy of a receiver or custodian
or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its
property, or shall make an assignment for the benefit of creditors; or
(f) any other Event of Default specified with respect to the Junior
Subordinated Debentures of that series (Section 6.01).
The holders of a majority in aggregate outstanding principal amount of
any series of the Junior Subordinated Debentures have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Debenture Trustee for that series. (Section 6.06) The Debenture Trustee or
the holders of not less than 33% in aggregate outstanding principal amount of
any particular series of the Junior Subordinated Debentures may declare the
principal due and payable immediately upon a Debenture Event of Default with
respect to such series and, in the case of Corresponding Junior Subordinated
Debentures, should the Debenture Trustee or such holders of such Corresponding
Junior Subordinated Debentures fail to make such declaration, the holders of at
least 33% in aggregate liquidation preference of the related series of Preferred
Securities shall have such right.
At any time after a declaration of acceleration with respect to the
Junior Subordinated Debentures of any series has been made and before a judgment
or decree for payment of the money due has been obtained, the Debenture Event or
Events of Default giving rise to such declaration of acceleration will, without
further act, be deemed to have been waived, and such declaration and its
consequences will, without further act, be deemed to have been rescinded and
annulled, if:
(a) PSO has paid or deposited with the Debenture Trustee a sum
sufficient to pay:
(1) all overdue interest on all Junior Subordinated Debentures
of such series;
(2) the principal of and premium, if any, on any Junior
Subordinated Debentures of such series which have become due otherwise
than by such declaration of acceleration and interest thereon at the
rate or rates prescribed therefor in such Junior Subordinated
Debentures;
(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Junior Subordinated Debentures, to the
extent that payment of such interest is lawful;
(4) all amounts due to the Debenture Trustee under the
Indenture; and
(b) any other Debenture Event or Events of Default with respect to
Junior Subordinated Debentures of such series, other than the
nonpayment of the principal of the Junior Subordinated Debentures of
such series which has become due solely by such declaration of
acceleration, have been cured or waived as provided in the Indenture.
(Section 6.01)
The holders of a majority in aggregate outstanding principal amount of
all series of the Junior Subordinated Debentures affected thereby may, on behalf
of the holders of all the Junior Subordinated Debentures of such series, waive
any past default, except a default in the payment of principal, premium, if any,
or interest. (Section 6.06) In the case of Corresponding Junior Subordinated
Debentures, should the holders of such Corresponding Junior Subordinated
Debentures fail to waive such default, the holders of a majority in aggregate
liquidation preference of the related series of Preferred Securities shall have
such right. PSO is required to file annually with the Debenture Trustee a
certificate as to whether or not PSO is in compliance with all the conditions
and covenants under the Indenture. (Section 5.03(d))
In case a Debenture Event of Default shall occur and be continuing as
to a series of Corresponding Junior Subordinated Debentures, the Property
Trustee will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debentures and any other amounts payable under
the Indenture, to be forthwith due and payable and to enforce its other rights
as a creditor with respect to such Corresponding Junior Subordinated Debentures.
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of PSO to pay interest or principal on the
Corresponding Junior Subordinated Debentures on the date such interest or
principal is otherwise payable, then a holder of Preferred Securities may
institute a Direct Action (as defined below under "Description of Preferred
Securities--Enforcement of Certain Rights by Holders of Preferred Securities")
for payment after the respective due dates specified in the Corresponding Junior
Subordinated Debentures. PSO may not amend the Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of the holders
of all of the Preferred Securities. PSO shall be subrogated to the rights of the
holder of such Preferred Securities with respect to payments on the Preferred
Securities to the extent of any payments made by PSO to such holder in any
Direct Action.
The holders of the Preferred Securities would not be able to exercise
directly any rights against PSO other than those set forth in the preceding
paragraph available to the holders of the Corresponding Junior Subordinated
Debentures unless the Property Trustee or the Debenture Trustee, acting for the
benefit of the Property Trustee, fails to do so for 60 days. In such event, to
the fullest extent permitted by law, the holders of at least 33% in aggregate
liquidation preference of the outstanding Preferred Securities would have the
right to directly institute proceedings for enforcement of such rights. See
"Description of Preferred Securities--Enforcement of Certain Rights by Holders
of Preferred Securities."
CONSOLIDATION, MERGER AND SALE
The Indenture does not contain any covenant which restricts PSO's
ability to merge or consolidate with or into any other corporation, sell or
convey all or substantially all of its assets to any corporation or otherwise
engage in restructuring transactions. (Section 10.01)
CONVERSION OR EXCHANGE
Unless otherwise indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures of any series may be convertible or exchangeable
into Preferred Securities or other securities. The specific terms on which
Junior Subordinated Debentures of any series may be so converted or exchanged
will be set forth in the applicable Prospectus Supplement. Such terms may
include provisions for conversion or exchange, either mandatory, at the option
of the holder, or at the option of PSO, in which case the number of shares of
Preferred Securities or other securities to be received by the holders of Junior
Subordinated Debentures would be calculated as of a time and in the manner
stated in the applicable Prospectus Supplement.
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, if PSO deposits with the Debenture
Trustee, in trust, moneys or Government Obligations, in an amount sufficient to
pay all the principal of, and interest on, the Junior Subordinated Debentures of
any series on the dates such payments are due in accordance with the terms of
such Junior Subordinated Debentures and if PSO delivers to the Debenture Trustee
an Opinion of Counsel to the effect that the holders of Junior Subordinated
Debentures of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and the release of certain
obligations of the Company (as described below) and will be subject to federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit and release had not occurred:
(a) PSO will be released from substantially all of its covenants and
other obligations contained in the Indenture and thereafter any failure
to comply with any such covenant or obligation will not constitute a
Default or a Debenture Event of Default with respect to the Junior
Subordinated Debentures of such series;
(b) the occurrence of an event described in clause (c) under "Debenture
Events of Default" above will no longer constitute a Default or a
Debenture Event of Default with respect to the Junior Subordinated
Debentures of such series; and
(c) the Junior Subordinated Debentures of such series will thereafter
be deemed not to be outstanding for purposes of determining whether the
holders of the requisite aggregate principal amount of Junior
Subordinated Debentures have approved any amendment, modification or
waiver with respect to any covenant or obligation described in clause
(a) above or any event described in clause (b) above;
PROVIDED that the foregoing will not relieve PSO of its obligations to make
payments in respect of the Junior Subordinated Debentures of such series.
In addition to discharging certain obligations under the Indenture as
stated above, if PSO delivers to the Debenture Trustee an Opinion of Counsel (in
lieu of the Opinion of Counsel referred to above) to the effect that (a) PSO has
received from, or there has been published by, the Internal Revenue Service a
ruling or (b) since the date of the Indenture there has been a change in
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the holders of Junior
Subordinated Debentures of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount and in
the same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred, and (c) the trust resulting
from the defeasance is a valid trust and will not constitute a regulated
investment company under the Investment Company Act of 1940, as amended, then,
in such event, PSO will be deemed to have paid and discharged the entire
indebtedness on the Junior Subordinated Debentures (except as to any surviving
rights such as rights of registration of transfer or exchange expressly provided
for in the Indenture). In the event of any such defeasance and discharge of
Junior Subordinated Debentures of such series, holders of Junior Subordinated
Debentures of such series would be able to look only to such trust fund for
payment of principal of (and premium, if any) and interest, if any, on the
Junior Subordinated Debentures of such series. (Sections 11.01, 11.02 and 11.03)
Prospective investors are urged to consult their own tax advisors as to the
specific consequences to them of such deposit.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed
by, and construed in accordance with, the laws of the State of New York.
(Section 13.04)
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee, prior to default, undertakes to perform only
such duties as are specifically set forth in the Indenture and, after default,
shall exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. (Section 7.01) Subject to such provision,
the Debenture Trustee is under no obligation to exercise any of the powers
vested in it by the Indenture at the request of any holder of Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
(Section 7.02) The Debenture Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the Debenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it. (Section 7.01)
The Bank of New York serves as trustee and agent under agreements
involving PSO and its affiliates.
MISCELLANEOUS
PSO will have the right at all times to assign any of its rights or
obligations under the Indenture to a direct or indirect wholly-owned subsidiary
of PSO; PROVIDED that, in the event of any such assignment, PSO will remain
liable for all such obligations. Subject to the foregoing, the Indenture will be
binding upon and inure to the benefit of the parties thereto and their
respective successors and permitted assigns. The Indenture provides that it may
not otherwise be assigned by the parties thereto. (Section 13.11)
DESCRIPTION OF PREFERRED SECURITIES
The Preferred Securities and the Common Securities of each Issuer Trust
will be created pursuant to the terms of the Trust Agreement for each Issuer
Trust. The Preferred Securities of a particular issue will represent preferred
undivided beneficial interests in the assets of the related Issuer Trust and the
holders thereof will be entitled to a preference in certain circumstances with
respect to Distributions and amounts payable on redemption or liquidation over
the Common Securities of such Issuer Trust, as well as other benefits as
described in the corresponding Trust Agreement. This summary of certain
provisions of the Preferred Securities and each Trust Agreement does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, all the provisions of each Trust Agreement, including the definitions
therein of certain terms, and the Trust Indenture Act. Wherever particular
defined terms of a Trust Agreement (as supplemented or amended from time to
time) are referred to herein or in a Prospectus Supplement, such defined terms
are incorporated herein or therein by reference. The form of each Trust
Agreement has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. Each of the Issuer Trusts is a legally separate
entity and the assets of one are not available to satisfy the obligations of any
of the others.
GENERAL
The Preferred Securities of an Issuer Trust will rank PARI PASSU, and
payments will be made thereon PRO RATA, with the Common Securities of that
Issuer Trust except as described below under "--Subordination of Common
Securities." Legal title to the Corresponding Junior Subordinated Debentures
will be held by the Property Trustee in trust for the benefit of the holders of
the related Preferred Securities and Common Securities. Each Guarantee Agreement
executed by PSO for the benefit of the holders of an Issuer Trust's Preferred
Securities (each, a "Guarantee") will be a guarantee on a subordinated basis
with respect to the related Preferred Securities but will not guarantee payment
of Distributions or amounts payable on redemption or liquidation of such
Preferred Securities when the related Issuer Trust does not have funds on hand
available to make such payments. See "Description of Guarantees."
DISTRIBUTIONS
Each Issuer Trust's Preferred Securities represent preferred undivided
beneficial interests in the assets of such Issuer Trust, and the Distributions
on each Preferred Security will be payable at a rate specified in the Prospectus
Supplement for such Preferred Securities. The amount of Distributions payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months unless otherwise specified in the applicable Prospectus Supplement.
Distributions to which holders of Preferred Securities are entitled will
accumulate additional Distributions ("Additional Amounts") if and as specified
in the applicable Prospectus Supplement. The term "Distributions" as used herein
includes any Additional Amounts unless otherwise stated.
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable Prospectus Supplement. In the event that any date
on which Distributions are payable on the Preferred Securities is not a Business
Day (as defined below), payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, payment of such Distribution shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed or a day on which the corporate trust office of
the Property Trustee or the Debenture Trustee is closed for business.
If provided in the applicable Prospectus Supplement, PSO has the right
under the Indenture to defer the payment of interest on any series of the
Corresponding Junior Subordinated Debentures at any time or from time to time
for one or more Extension Periods, subject to the terms, conditions and
covenants, if any, specified in the applicable Prospectus Supplement, PROVIDED
that no Extension Period may extend beyond the maturity of such series of
Corresponding Junior Subordinated Debentures. As a consequence of any such
extension, Distributions on the corresponding Preferred Securities would be
deferred (but would continue to accumulate additional Distributions thereon at
the rate per annum set forth in the Prospectus Supplement for such Preferred
Securities) by the Issuer Trust of such Preferred Securities during any such
Extension Period. During such Extension Period PSO may not, and may not permit
any subsidiary of PSO to, (i) declare, set aside or pay any dividend or
distribution on, or repurchase, redeem, or otherwise acquire or make any sinking
fund payment with respect to, any shares of PSO's capital stock, including the
Common Stock of PSO, or (ii) make any payment of principal, interest or premium,
if any, on or repay, repurchase or redeem any debt securities that rank PARI
PASSU with or junior in interest to the Corresponding Junior Subordinated
Debentures or make any guarantee payments with respect to the foregoing (other
than (a) dividends or distributions in shares of its capital stock or in rights
to acquire shares of its capital stock, (b) conversions into or exchanges for
shares of its capital stock, (c) redemptions, purchases or other acquisitions of
shares of its capital stock made for the purpose of an employee incentive plan
or benefit plan of PSO or any of its subsidiaries and mandatory redemptions or
sinking fund payments with respect to any series of Preferred Stock of PSO that
are subject to mandatory redemption or sinking fund requirements, PROVIDED that
the aggregate stated value of all such series outstanding at the time of any
such payment does not exceed five percent of the aggregate of (1) the total
principal amount of all bonds or other securities representing secured
indebtedness issued or assumed by PSO and then outstanding and (2) the capital
and surplus of PSO to be stated on the books of account of PSO after giving
effect to such payment, PROVIDED, HOWEVER, that any moneys deposited in any
sinking fund and not in violation of this provision may thereafter be applied to
the purchase or redemption of such Preferred Stock in accordance with the terms
of such sinking fund without regard to the restrictions contained in this
provision, and (d) payments under any guarantee by PSO with respect to any
securities of a subsidiary of PSO, provided that the proceeds from the issuance
of such securities were issued to purchase Junior Subordinated Debentures of any
series under the Indenture). See "Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date," and "--Certain Covenants of
PSO" and "Description of Corresponding Junior Subordinated Debentures--Certain
Covenants of PSO."
The revenue of each Issuer Trust available for distribution to holders
of its Preferred Securities will be limited to payments under the Corresponding
Junior Subordinated Debentures in which such Issuer Trust will invest the
proceeds from the issuance and sale of its Preferred Securities and its Common
Securities. See "Description of Corresponding Junior Subordinated Debentures."
If PSO does not make interest payments on such Corresponding Junior Subordinated
Debentures, the Property Trustee will not have funds available to pay
Distributions on the related Preferred Securities. The payment of Distributions
(if and to the extent the Issuer Trust has funds available for the payment of
such Distributions and cash sufficient to make such payments) is guaranteed by
PSO on a limited basis as set forth herein under "Description of Guarantees."
Distributions on the Preferred Securities of each Issuer Trust will be
payable to the holders thereof as they appear on the register of such Issuer
Trust on the relevant record dates, which, as long as the Preferred Securities
remain in book-entry form, will be one Business Day prior to the relevant
Distribution Date. Subject to any applicable laws and regulations and the
provisions of the applicable Trust Agreement, each such payment will be made as
described under "--Book-entry Issuance." In the event any Preferred Securities
are not in book-entry form, the relevant record date for such Preferred
Securities shall be a date at least 15 days prior to the relevant Distribution
Date, as specified in the applicable Prospectus Supplement.
REDEMPTION OR EXCHANGE
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Subordinated Debentures, whether at maturity
or upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the related Preferred Securities and Common
Securities, upon not less than 30 nor more than 60 days' notice prior to the
date fixed for repayment or redemption (the "Redemption Date"), at a redemption
price equal to the aggregate liquidation preference of such Preferred Securities
plus accumulated and unpaid Distributions thereon to the Redemption Date (the
"Redemption Price") and the related amount of the premium, if any, paid by PSO
upon the concurrent redemption of such Corresponding Junior Subordinated
Debentures. See "Description of Corresponding Junior Subordinated Debentures
Optional Redemption." If less than all of any series of Corresponding Junior
Subordinated Debentures are to be repaid or redeemed on a Redemption Date, then
the proceeds from such repayment or redemption shall be allocated to the
redemption PRO RATA of the related Preferred Securities and the Common
Securities. The amount of premium, if any, paid by PSO upon the redemption of
all or any part of any series of any Corresponding Junior Subordinated
Debentures to be repaid or redeemed on a Redemption Date shall be allocated to
the redemption PRO RATA of the related Preferred Securities and the Common
Securities.
PSO will have the right to redeem any series of Corresponding Junior
Subordinated Debentures at any time, in whole (but not in part), upon the
occurrence of a Tax Event or an Investment Company Event (each as defined below,
a "Special Event") and subject to the further conditions described under
"Description of Corresponding Junior Subordinated Debentures--Optional
Redemption." In addition, the applicable Prospectus Supplement will specify the
period or periods within which, the price or prices at which and the terms and
conditions upon which the Corresponding Junior Subordinated Debentures of any
series may be redeemed, in whole or in part, at the option of PSO. Corresponding
Junior Subordinated Debentures in denominations larger than $25 may be redeemed
in part but only in integral multiples of $25. Except as otherwise specified in
the applicable Prospectus Supplement, the Redemption Price for any Corresponding
Junior Subordinated Debenture so redeemed shall equal any accrued and unpaid
interest thereon to the Redemption Date, plus 100% of the principal amount
thereof.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF CORRESPONDING
JUNIOR SUBORDINATED DEBENTURES.
If a Special Event in respect of a series of Preferred Securities and
Common Securities shall occur and be continuing, PSO has the right to redeem the
Corresponding Junior Subordinated Debentures in whole (but not in part) and
thereby cause a mandatory redemption of such Preferred Securities and Common
Securities in whole (but not in part) within 90 days following the occurrence of
such Special Event at the Redemption Price. Whether or not a Special Event has
occurred, PSO has the right to terminate the related Issuer Trust at any time
and, after satisfaction of liabilities to creditors of such Issuer Trust, if
any, as provided by applicable law, cause such Corresponding Junior Subordinated
Debentures to be distributed to the holders of such Preferred Securities and
Common Securities in liquidation of the Issuer Trust. If PSO does not elect
either option described above, the applicable series of Preferred Securities
will remain outstanding and, in the event a Tax Event has occurred and is
continuing, Additional Sums (as defined below) may be payable on the
Corresponding Junior Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by an Issuer Trust
on the outstanding Preferred Securities and Common Securities of the Issuer
Trust shall not be reduced as a result of any additional taxes, duties and other
governmental charges to which such Issuer Trust has become subject as a result
of a Tax Event.
"Investment Company Event" means the receipt by the applicable Issuer
Trust of an opinion of counsel, rendered by a law firm having a recognized
national tax and securities practice, to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law") the applicable
Issuer Trust is or will be considered an "investment company" that is required
to be registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), which Change in 1940 Act Law becomes effective on or
after the date of original issuance of the series of Preferred Securities issued
by the applicable Issuer Trust.
"Like Amount" means (i) with respect to a redemption of any series of
Preferred Securities, Preferred Securities and Common Securities of such series
having a Liquidation Amount (as defined below) equal to that portion of the
principal amount of Corresponding Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture and the proceeds of
which will be used to pay the Redemption Price of such Preferred Securities and
Common Securities, and (ii) with respect to a distribution of Corresponding
Junior Subordinated Debentures to holders of any series of Preferred Securities
in connection with a termination or liquidation of the related Issuer Trust,
Corresponding Junior Subordinated Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities or Common Securities of the
holder to whom such Corresponding Junior Subordinated Debentures are
distributed.
"Liquidation Amount" means the stated amount of $25 per Preferred
Security and Common Security.
"Tax Event" means the receipt by the applicable Issuer Trust of an
opinion of counsel, rendered by a law firm having a recognized national tax and
securities practice, to the effect that, as a result of any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States, or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the related Trust Agreement, there is more than an
insubstantial risk that (i) the applicable Issuer Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the corresponding series of
Corresponding Junior Subordinated Debentures, (ii) interest payable by PSO on
such series of Corresponding Junior Subordinated Debentures is not, or within 90
days of the date of such opinion, will not be, deductible by PSO, in whole or in
part, for United States federal income tax purposes, or (iii) the applicable
Issuer Trust is, or will be within 90 days of the date of such opinion, subject
to more than a DE MINIMIS amount of other taxes, duties or other governmental
charges.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debentures for any series of Preferred Securities and Common
Securities (i) such series of Preferred Securities and Common Securities will no
longer be deemed to be outstanding, (ii) The Depository Trust Company ("DTC") or
its nominee, as the record holder of such series of Preferred Securities, will
receive a registered global certificate or certificates representing the
Corresponding Junior Subordinated Debentures to be delivered upon such
distribution and (iii) any certificates representing such series of Preferred
Securities not held by DTC or its nominee will be deemed to represent the
Corresponding Junior Subordinated Debentures having a principal amount equal to
the stated liquidation preference of such series of Preferred Securities, and
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on such series of Preferred Securities until such certificates are
presented to the Administrative Trustees or their agent for transfer or
reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debentures that may be
distributed in exchange for Preferred Securities if a termination and
liquidation of an Issuer Trust were to occur. Accordingly, the Preferred
Securities that an investor may purchase, or the Corresponding Junior
Subordinated Debentures that the investor may receive on termination and
liquidation of an Issuer Trust, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debentures. Redemptions of
the Preferred Securities shall be made and the Redemption Price shall be payable
on each Redemption Date only to the extent that the related Issuer Trust has
funds on hand available for the payment of such Redemption Price. See also
"--Subordination of Common Securities."
If an Issuer Trust gives a notice of redemption in respect of its
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are available, the Property Trustee will deposit
irrevocably with DTC, funds sufficient to pay the applicable Redemption Price
and will give DTC irrevocable instructions and authority to pay the Redemption
Price to the holders of such Preferred Securities. See "--Book-entry Issuance."
If such Preferred Securities are no longer in book-entry form, such Issuer
Trust, to the extent funds are available, will irrevocably deposit with the
paying agent for such Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing such Preferred Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Preferred Securities called for redemption shall be
payable to the holder of such Preferred Securities as of the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date of such deposit,
all rights of the holders of such Preferred Securities so called for redemption
will cease, except the right of the holders of such Preferred Securities to
receive the Redemption Price, but without interest on such Redemption Price, and
such Preferred Securities will cease to be outstanding. In the event that any
date fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the Redemption Price in
respect of Preferred Securities called for redemption is improperly withheld or
refused and not paid either by the Issuer Trust or by PSO pursuant to the
Guarantee as described under "Description of Guarantees," Distributions on such
Preferred Securities will continue to accrue at the then applicable rate, from
the Redemption Date originally established by the Issuer Trust for such
Preferred Securities to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), PSO or its subsidiaries, if any, may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debentures to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; PROVIDED, HOWEVER, that in the event that any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be the fifteenth day prior to the Redemption
Date or liquidation date, as applicable, as specified in the applicable
Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities
issued by an Issuer Trust are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of such Preferred Securities and Common Securities
to be redeemed shall be allocated PRO RATA among the Preferred Securities and
Common Securities. The particular Preferred Securities to be redeemed shall be
selected on a PRO RATA basis not more than 60 days prior to the Redemption Date
by the Property Trustee from the outstanding Preferred Securities not previously
called for redemption, by such method as the Property Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $25 or an integral multiple of $25 in excess thereof) of the
liquidation preference of Preferred Securities of a denomination larger than
$25. The Property Trustee shall promptly notify the trust registrar in writing
of the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the liquidation preference
thereof to be redeemed. For all purposes of each Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the aggregate
liquidation preference of Preferred Securities which has been or is to be
redeemed.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each holder of Preferred Securities
to be redeemed at its registered address.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions (including Additional Sums, if applicable) on,
and the Redemption Price of, each Issuer Trust's Preferred Securities and Common
Securities, as applicable, shall be made PRO RATA based on the Liquidation
Amount of such Preferred Securities and Common Securities; PROVIDED, HOWEVER,
that if on any Distribution Date or Redemption Date any Event of Default
resulting from a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Sums, if
applicable) on, or Redemption Price of, any of the Issuer Trust's Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions (including Additional
Amounts, if applicable) on all of the Issuer Trust's outstanding Preferred
Securities for all Distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all of the Issuer Trust's outstanding Preferred Securities then called
for redemption, shall have been made or provided for, and all funds available to
the Property Trustee shall first be applied to the payment in full in cash of
all Distributions (including Additional Sums, if applicable) on, or Redemption
Price of, the Issuer Trust's Preferred Securities then due and payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, PSO as holder of each Issuer Trust's Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
the applicable Trust Agreement until the effect of all such Events of Default
with respect to such Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Events of Default under the applicable Trust
Agreement with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
holders of such Preferred Securities and not on behalf of PSO as holder of the
Common Securities, and only the holders of such Preferred Securities will have
the right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Issuer Trust shall automatically
terminate upon expiration of its term and shall be terminated on the first to
occur of: (i) certain events of bankruptcy, dissolution or liquidation of PSO;
(ii) the distribution of a Like Amount of the Corresponding Junior Subordinated
Debentures to the holders of its Preferred Securities and Common Securities if
PSO, as Depositor, has given written direction to the Property Trustee to
terminate such Issuer Trust (which direction is optional and wholly within the
discretion of PSO as Depositor); (iii) the redemption of all of such Issuer
Trust's Preferred Securities as described under "--Redemption or Exchange"; and
(iv) the entry by a court of competent jurisdiction of an order for the
dissolution of such Issuer Trust.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, such Issuer Trust shall be liquidated by the Issuer Trustees as
expeditiously as the Issuer Trustees determine to be possible by distributing,
after satisfaction of liabilities to creditors of such Issuer Trust as provided
by applicable law, to the holders of such Preferred Securities and Common
Securities a Like Amount of the Corresponding Junior Subordinated Debentures,
unless such distribution is determined by the Property Trustee not to be
practical, in which event such holders will be entitled to receive out of the
assets of the Issuer Trust available for distribution to holders, after
satisfaction of liabilities to creditors of such Issuer Trust as provided by
applicable law, an amount equal to, in the case of holders of Preferred
Securities, the aggregate of the liquidation preference plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because such Issuer Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by such
Issuer Trust on its Preferred Securities shall be paid on a PRO RATA basis. The
holders of such Issuer Trust's Common Securities will be entitled to receive
distributions upon any such liquidation PRO RATA with the holders of its
Preferred Securities, except that if a Debenture Event of Default has occurred
and is continuing, such Preferred Securities shall have a priority over such
Common Securities. A supplemental indenture may provide that if an early
termination occurs as described in clause (iv) above, the Corresponding Junior
Subordinated Debentures may be subject to optional redemption in whole (but not
in part).
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
each Trust Agreement (an "Event of Default") with respect to the Preferred
Securities issued thereunder (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the
Indenture with respect to the Corresponding Junior Subordinated
Debentures (see "Description of Junior Subordinated Debentures--
Debenture Events of Default"); or
(ii) default by an Issuer Trust in the payment of any
Distribution with respect to Preferred Securities of that issue when it
becomes due and payable, and continuation of such default for a period
of 30 days; or
(iii) default by an Issuer Trust in the payment of any
Redemption Price of any Preferred Security or Common Security of that
issue when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in such
Trust Agreement (other than a covenant or warranty a default in the
performance of which or the breach of which is dealt with in clause
(ii) or (iii) above), and continuation of such default or breach for a
period of 60 days after there has been given, by registered or
certified mail, to the defaulting Issuer Trustee or Trustees by the
holders of at least 33% in aggregate liquidation preference of the
outstanding Preferred Securities of that issue, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" under such Trust
Agreement; or
(v) the occurrence of certain events of bankruptcy or
insolvency with respect to the Property Trustee and the failure by PSO
to appoint a successor Property Trustee within 60 days thereof.
Within 15 Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such Issuer Trust's Preferred
Securities, the Administrative Trustees and PSO, as Depositor, unless such Event
of Default shall have been cured or waived. PSO, as Depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under each Trust Agreement.
If, in the event of a Debenture Event of Default, the Debenture Trustee
fails or the holders of not less than 33% in aggregate principal amount of the
Corresponding Junior Subordinated Debentures fail to declare the principal due
and payable, the holders of at least 33% in aggregate liquidation preference of
the related series of Preferred Securities shall have such right. Except as set
forth above, the existence of an Event of Default does not entitle the holders
of Preferred Securities to accelerate the maturity thereof or declare amounts
due and payable.
If a Debenture Event of Default with respect to any Corresponding
Junior Subordinated Debentures has occurred and is continuing, the corresponding
Preferred Securities shall have a preference over the related Common Securities
upon termination of the applicable Issuer Trust as described above. See
"--Liquidation Distribution Upon Termination."
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing, then
the holders of Preferred Securities would rely on the enforcement by the
Property Trustee or the Debenture Trustee, acting for the benefit of the
Property Trustee, of its rights as a holder of the Corresponding Junior
Subordinated Debentures against PSO. Notwithstanding the foregoing, if a
Debenture Event of Default has occurred and is continuing and such event is
attributable to the failure of PSO to pay interest or principal on the
Corresponding Junior Subordinated Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a holder of Preferred Securities may directly institute a proceeding
against PSO for enforcement of payment to such holder of the principal of or
interest on the Corresponding Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation preference of the Preferred Securities
of such holder (a "Direct Action") after the respective due dates specified in
the Corresponding Junior Subordinated Debentures. In connection with such Direct
Action, PSO will be subrogated to the rights of such holder of Preferred
Securities with respect to payments on the Preferred Securities to the extent of
any payment made by PSO to such holder of Preferred Securities in such Direct
Action.
The holders of the Preferred Securities would not be able to exercise
directly against PSO any rights other than those set forth in the preceding
paragraph available to the holders of the Corresponding Junior Subordinated
Debentures unless the Property Trustee or the Debenture Trustee, acting for the
benefit of the Property Trustee, fails to do so for 60 days. In such event, to
the fullest extent permitted by law, the holders of at least 33% in aggregate
liquidation preference of the outstanding Preferred Securities would have the
right to directly institute proceedings for enforcement of such rights.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default with respect to any Corresponding
Junior Subordinated Debentures shall have occurred and be continuing, the
applicable Issuer Trustee may be removed at any time by the holder of the
related Common Securities. If such a Debenture Event of Default has occurred and
is continuing, the Property Trustee and the Delaware Trustee may be removed at
such time by the holders of a majority in Liquidation Amount of the outstanding
corresponding Preferred Securities. In no event will the holders of the
Preferred Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in PSO as
the holder of the Common Securities. No resignation or removal of an Issuer
Trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the applicable
Trust Property may at the time be located, PSO, as the holder of the Common
Securities, shall have power to appoint one or more persons either to act as a
co-trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such person or persons in such capacity any property, title, right or
power deemed necessary or desirable, subject to the provisions of the applicable
Trust Agreement. In case a Debenture Event of Default with respect to any
Corresponding Junior Subordinated Debentures has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
entity succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under each Trust Agreement,
provided such entity shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER TRUSTS
An Issuer Trust may not merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. An Issuer Trust may, at the request of PSO, with the consent of
the Administrative Trustees and without the consent of the holders of the
Preferred Securities of such Issuer Trust, merge with or into, consolidate,
amalgamate, be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the laws
of any State; PROVIDED that (i) such successor entity either (a) expressly
assumes all of the obligations of such Issuer Trust with respect to such
Preferred Securities or (b) substitutes for such Preferred Securities other
securities having substantially the same terms as such Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as
such Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) PSO expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Corresponding Junior Subordinated
Debentures, (iii) the Successor Securities are listed or traded, or any
Successor Securities will be listed or traded upon notification of issuance, on
any national securities exchange or other organization on which such Preferred
Securities are then listed, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause such
Preferred Securities (including any Successor Securities) to be downgraded by
any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of such
Preferred Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose substantially identical to
that of such Issuer Trust, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, PSO has received an
opinion from independent counsel to such Issuer Trust experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of such Preferred Securities
(including any Successor Securities) in any material respect, and (b) following
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, neither such Issuer Trust nor such successor entity will be required to
register as an "investment company" under the Investment Company Act and (viii)
PSO or any permitted successor or assignee owns all of the common securities of
such successor entity and guarantees the obligations of such successor entity
under the Successor Securities at least to the extent provided by the applicable
Guarantee. Notwithstanding the foregoing, an Issuer Trust shall not, except with
the consent of holders of 100% in aggregate liquidation preference of the
Preferred Securities of such Issuer Trust, consolidate, amalgamate, merge with
or into, be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause such Issuer Trust or the successor entity to be classified as other
than a "grantor trust" for United States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "Description of
Guarantees--Amendments and Assignment" and as otherwise required by law and the
applicable Trust Agreement, the holders of the Preferred Securities will have no
voting rights.
Each Trust Agreement may be amended from time to time by PSO and the
Administrative Trustees, without the consent of the holders of the related
Preferred Securities, (i) to reflect the acceptance of appointment by a
successor Issuer Trustee, (ii) to cure any ambiguity, correct or supplement any
provisions in such Trust Agreement that may be inconsistent with any other
provision, or to make any other provisions with respect to matters or questions
arising under such Trust Agreement, that shall not be inconsistent with the
other provisions of such Trust Agreement, or (iii) to modify, eliminate or add
to any provisions of such Trust Agreement to such extent as shall be necessary
to ensure that the related Issuer Trust will be classified for United States
federal income tax purposes as a "grantor trust" at all times that any Preferred
Securities and Common Securities of such Issuer Trust are outstanding or to
ensure that such Issuer Trust will not be required to register as an "investment
company" under the Investment Company Act, PROVIDED, HOWEVER, that in the case
of clause (ii) above, such action shall not adversely affect in any material
respect the interests of any holder of Preferred Securities or Common Securities
of such Issuer Trust, and, in the case of clause (iii), any amendments of such
Trust Agreement shall become effective when notice thereof is given to the
holders of such Preferred Securities and Common Securities. Such Trust Agreement
may be amended by the Administrative Trustees and PSO with (i) the consent of
holders representing not less than a majority (based upon Liquidation Amounts)
of such outstanding Preferred Securities and Common Securities and (ii) receipt
by the Issuer Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Issuer Trustees in
accordance with such amendment will not affect such Issuer Trust's status as a
"grantor trust" for United States federal income tax purposes or such Issuer
Trust's exemption from status as an "investment company" under the Investment
Company Act, PROVIDED, FURTHER that without the consent of each holder of such
Preferred Securities and Common Securities, such Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on such Preferred
Securities and Common Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of such Preferred Securities and
Common Securities as of a specified date or (ii) restrict the right of holders
of such Preferred Securities and Common Securities to institute suit for the
enforcement of any such payment on or after such date as described under
"--Events of Default; Notice" above.
So long as any Corresponding Junior Subordinated Debentures are held by
the Property Trustee, the Issuer Trustees shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee or executing any trust or power conferred on the Property Trustee with
respect to such Corresponding Junior Subordinated Debentures, (ii) waive any
past default that is waivable under the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Corresponding
Junior Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or such Corresponding
Junior Subordinated Debentures, where such consent shall be required, without,
in each case, obtaining the prior approval of the holders of a majority in
aggregate liquidation preference of all outstanding corresponding Preferred
Securities; PROVIDED, HOWEVER, that where a consent under the Indenture would
require the consent of each holder of Corresponding Junior Subordinated
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior consent of each holder of the corresponding Preferred
Securities. The Issuer Trustees shall not revoke any action previously
authorized or approved by a vote of the holders of the Preferred Securities
except by subsequent vote of the holders of the Preferred Securities. The
Property Trustee shall notify each holder of record of the Preferred Securities
of any notice of default with respect to the Corresponding Junior Subordinated
Debentures. In addition to obtaining the foregoing approvals of the holders of
the Preferred Securities, prior to taking any of the foregoing actions, the
Issuer Trustees shall obtain an opinion of counsel experienced in such matters
to the effect that the applicable Issuer Trust will be classified as a "grantor
trust" and will not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given
at a meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be given to each holder of record of Preferred Securities in the manner set
forth in the applicable Trust Agreement.
No vote or consent of the holders of Preferred Securities will be
required for an Issuer Trust to redeem and cancel its Preferred Securities in
accordance with the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by PSO, the Issuer Trustees or any affiliate
of PSO or any Issuer Trustees shall, for purposes of such vote or consent, be
treated as if they were not outstanding.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to DTC,
which shall credit the relevant accounts at DTC on the applicable Distribution
Dates or, if any Issuer Trust's Preferred Securities are not held by DTC, such
payments shall be made by check mailed to the address of the holder entitled
thereto as such address shall appear on the Register. Unless otherwise specified
in the applicable Prospectus Supplement, the paying agent (the "Paying Agent")
shall initially be the Property Trustee and any co-paying agent chosen by the
Property Trustee and acceptable to the Administrative Trustees and PSO. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Property Trustee and PSO. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the Property
Trustee and PSO) to act as Paying Agent.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the Preferred
Securities. The Preferred Securities will be issued only as fully-registered
securities registered in the name of Cede & Co. (DTC's nominee). One or more
fully-registered global certificates will be issued for the Preferred Securities
of each Issuer Trust, representing in the aggregate the total number of such
Issuer Trust's Preferred Securities, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain custodial
relationships with Direct Participants, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchases of Preferred Securities within the DTC system must be made by
or through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Preferred Securities, except in the event that use
of the book-entry system for the Preferred Securities of such Issuer Trust is
discontinued.
To facilitate subsequent transfers, all of the Preferred Securities
deposited by the Participants with DTC are registered in the name of DTC's
nominee, Cede & Co. The deposit of Preferred Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Redemption notices shall be sent to Cede & Co. as the registered holder
of the Preferred Securities. If less than all of an Issuer Trust's Preferred
Securities are being redeemed, DTC's current practice is to determine by lot the
amount of the interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities is limited to
the holders of record of the Preferred Securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Preferred Securities. Under its usual procedures, DTC would mail an
omnibus proxy (the "Omnibus Proxy") to the Property Trustee as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts such Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Distribution payments on the Preferred Securities will be made by the
Property Trustee to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participant and not of DTC, the
Property Trustee, the Issuer Trust thereof or PSO, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
Distributions to DTC is the responsibility of the Property Trustee, disbursement
of such payments to Direct Participants is the responsibility of DTC, and
disbursements of such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary
with respect to any of the Preferred Securities at any time by giving reasonable
notice to the Property Trustee and PSO. In the event that a successor securities
depositary is not obtained, definitive Preferred Security certificates
representing such Preferred Securities are required to be printed and delivered.
PSO, at its option, may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor depositary). After a Debenture Event of
Default, the holders of a majority in liquidation preference of Preferred
Securities may determine to discontinue the system of book-entry transfers
through DTC. In any such event, definitive certificates for such Issuer Trust's
Preferred Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Issuer Trusts and PSO believe to
be accurate, but the Issuer Trusts and PSO assume no responsibility for the
accuracy thereof. None of the Issuer Trusts, any Issuer Trustee nor PSO has any
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected
without charge by or on behalf of each Issuer Trust, but upon payment of any tax
or other governmental charges that may be imposed in connection with any
transfer or exchange. The Issuer Trusts will not be required to register or
cause to be registered the transfer of their Preferred Securities after such
Preferred Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance
of an Event of Default, undertakes to perform only such duties as are
specifically set forth in each Trust Agreement and, after such Event of Default,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the applicable Trust Agreement at the request of any
holder of Preferred Securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities that might be incurred thereby. If no Event
of Default has occurred and is continuing and the Property Trustee is required
to decide between alternative causes of action, construe ambiguous provisions in
the applicable Trust Agreement or is unsure of the application of any provision
of the applicable Trust Agreement, and the matter is not one on which holders of
Preferred Securities are entitled under such Trust Agreement to vote, then the
Property Trustee shall take such action as is directed by PSO and if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Preferred Securities and the Common Securities and will
have no liability except for its own bad faith, negligence or willful
misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuer Trusts in such a way that no Issuer Trust
will be deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Corresponding
Junior Subordinated Debentures will be treated as indebtedness of PSO for United
States federal income tax purposes. In this connection, PSO and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of each Issuer Trust or each Trust
Agreement, that PSO and the Administrative Trustees determine in their
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
related Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar
rights.
No Issuer Trust may borrow money or issue debt or mortgage or pledge
any of its assets.
DESCRIPTION OF GUARANTEES
Each Guarantee will be executed and delivered by PSO concurrently with
the issuance by each Issuer Trust of its Preferred Securities for the benefit of
the holders from time to time of such Preferred Securities. The Bank of New York
will act as indenture trustee ("Guarantee Trustee") under each Guarantee for the
purposes of compliance with the Trust Indenture Act and each Guarantee will be
qualified as an indenture under the Trust Indenture Act. This summary of certain
provisions of the Guarantees does not purport to be complete and is subject to,
and qualified in its entirety by reference to, all of the provisions of each
Guarantee, including the definitions therein of certain terms, and the Trust
Indenture Act. The form of each Guarantee has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Reference in this
summary to the Preferred Securities and the Issuer Trust mean the Preferred
Securities of an Issuer Trust and such Issuer Trust, respectively, to which a
Guarantee relates. The Guarantee Trustee will hold each Guarantee for the
benefit of the holders of the related Issuer Trust's Preferred Securities.
GENERAL
PSO will irrevocably agree to pay in full on a subordinated basis, to
the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Preferred Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that such Issuer Trust may have or assert other
than the defense of payment. The following payments with respect to the
Preferred Securities, to the extent not paid by or on behalf of the related
Issuer Trust (the "Guarantee Payments"), will be subject to the Guarantees: (i)
any accumulated and unpaid Distributions required to be paid on such Preferred
Securities, to the extent that such Issuer Trust has funds on hand available
therefor, (ii) the Redemption Price with respect to any Preferred Securities
called for redemption to the extent that such Issuer Trust has funds on hand
available therefor, and (iii) upon a voluntary or involuntary termination,
winding up or liquidation of such Issuer Trust (unless the Corresponding Junior
Subordinated Debentures are distributed to holders of such Preferred
Securities), the lesser of (a) the Liquidation Amount plus accumulated and
unpaid Distributions on the Preferred Securities to the date of payment to the
extent that such Issuer Trust has funds on hand available therefor and (b) the
amount of assets of such Issuer Trust remaining available for distribution to
holders of Preferred Securities. PSO's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by PSO to the holders
of the applicable Preferred Securities or by causing the Issuer Trust to pay
such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis
of the related Issuer Trust's obligations under the Preferred Securities, but
will apply only to the extent that such related Issuer Trust has funds
sufficient to make such payments, and is not a guarantee of collection.
If PSO does not make interest payments on the Corresponding Junior
Subordinated Debentures held by the Issuer Trust, it is expected the Issuer
Trust will not be able to pay Distributions on the Preferred Securities and will
not have funds available therefor. Each Guarantee will rank subordinate and
junior in right of payment to all Senior Indebtedness of PSO. See "--Status of
the Guarantees." Except as otherwise provided in the applicable Prospectus
Supplement, the Guarantees do not limit the incurrence or issuance of other
secured or unsecured debt of PSO, whether under the Indenture or any existing or
other indenture that PSO may enter into in the future or otherwise.
PSO has, through the applicable Guarantee, the applicable Trust
Agreement, the Junior Subordinated Debentures, the Indenture and the Expense
Agreements (as defined below), taken together, fully, irrevocably and
unconditionally guaranteed all of the Issuer Trust's obligations under the
Preferred Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such a
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer Trust's obligations under the Preferred Securities. See "Relationship
Among the Preferred Securities, the Corresponding Junior Subordinated Debentures
and the Guarantees."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of PSO and will
rank subordinate and junior in right of payment to all Senior Indebtedness of
PSO.
Each Guarantee will rank PARI PASSU with all other Guarantees issued by
PSO. Each Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
PSO to enforce its rights under the Guarantee without first instituting a legal
proceeding against any other person or entity). Each Guarantee will be held for
the benefit of the holders of the related Preferred Securities. Each Guarantee
will not be discharged except by payment of the related Guarantee Payments in
full to the extent not paid by the related Issuer Trust or upon distribution to
the holders of the Preferred Securities of the Corresponding Junior Subordinated
Debentures. None of the Guarantees places a limitation on the amount of
additional Senior Indebtedness that may be incurred by PSO. PSO may, from time
to time, incur additional indebtedness constituting Senior Indebtedness.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of the related Preferred Securities (in which case
no vote will be required), no Guarantee may be amended without the prior
approval of the holders of not less than a majority of the aggregate Liquidation
Amount of such outstanding Preferred Securities. The manner of obtaining any
such approval will be as set forth under "Description of the Preferred
Securities -- Voting Rights; Amendment of Trust Agreement." All guarantees and
agreements contained in each Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of PSO and shall inure to the benefit of
the holders of the related Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of
PSO to perform any of its payment or other obligations thereunder. The holders
of not less than a majority in aggregate Liquidation Amount of the related
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the related Preferred Securities may institute a legal
proceeding directly against PSO to enforce its rights under such related
Guarantee without first instituting a legal proceeding against the Issuer Trust,
the Guarantee Trustee or any other person or entity.
PSO, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not PSO is in compliance with all the
conditions and covenants applicable to it under the Guarantees.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance
of a default by PSO in performance of any Guarantee, undertakes to perform only
such duties as are specifically set forth in each Guarantee and, after default
with respect to any Guarantee, must exercise the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her own
affairs. Notwithstanding this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by any Guarantee at the
request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect
upon full payment of the Redemption Price of the related Preferred Securities,
upon full payment of the amounts payable upon liquidation of the related Issuer
Trust or upon distribution of Corresponding Junior Subordinated Debentures to
the holders of the related Preferred Securities. Each Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of the related Preferred Securities must restore payment of any sums paid
under such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
THE EXPENSE AGREEMENTS
Pursuant to the related Agreement as to Expenses and Liabilities
entered into by PSO under each Trust Agreement (the "Expense Agreement"), PSO
will, as holder of the Common Securities, irrevocably and unconditionally
guarantee to each person or entity to whom the Issuer Trust becomes indebted or
liable, the full payment of any costs, expenses or liabilities of the Issuer
Trust, other than obligations of the Issuer Trust to pay to the holders of any
Preferred Securities or other similar interests in the Issuer Trust the amounts
due such holders pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be.
DESCRIPTION OF CORRESPONDING
JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures are to be issued in
one or more series under the Indenture with terms corresponding to the terms of
the related Preferred Securities. For a summary of certain terms and provisions
of Junior Subordinated Debentures that, except where noted, pertains in all
respects to the Corresponding Junior Subordinated Debentures, see "Description
of Junior Subordinated Debentures." This summary of certain terms and provisions
of, or relating to, Corresponding Junior Subordinated Debentures and the
Indenture does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, the Indenture, the form of which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
to the Trust Indenture Act. Whenever particular defined terms of the Indenture
(as supplemented or amended from time to time) are referred to herein or in a
Prospectus Supplement, such defined terms are incorporated herein or therein by
reference.
GENERAL
Concurrently with the issuance of each Issuer Trust's Preferred
Securities, such Issuer Trust will invest the proceeds thereof and the
consideration paid by PSO for the Common Securities in a series of Corresponding
Junior Subordinated Debentures issued by PSO to such Issuer Trust. Each series
of Corresponding Junior Subordinated Debentures will be in the principal amount
equal to the aggregate stated Liquidation Amount of the related Preferred
Securities plus PSO's concurrent investment in the Common Securities and will
rank PARI PASSU with all other series of Junior Subordinated Debentures. The
Corresponding Junior Subordinated Debentures will be unsecured and subordinate
and junior in right of payment to the extent and in the manner set forth in the
Indenture to all Senior Indebtedness of PSO. See "Description of Junior
Subordinated Debentures--Subordination" and the Prospectus Supplement relating
to any offering of related Preferred Securities.
OPTIONAL REDEMPTION
The applicable Prospectus Supplement will specify the period or periods
within which, the price or prices at which and the terms and conditions upon
which the Corresponding Junior Subordinated Debentures of any series may be
redeemed, in whole or in part, at the option of PSO. Except as otherwise set
forth in the applicable Prospectus Supplement, the redemption price for any
Corresponding Junior Subordinated Debentures so redeemed shall be equal to any
accrued and unpaid interest thereon to the date fixed for redemption, plus 100%
of the principal amount thereof. See "Description of Junior Subordinated
Debentures--Redemption."
If a Special Event in respect of an Issuer Trust shall occur and be
continuing, PSO may, at its option, redeem the Corresponding Junior Subordinated
Debentures at any time within 90 days of the occurrence of such Special Event,
in whole but not in part, subject to the provisions of the Indenture. The
redemption price for any Corresponding Junior Subordinated Debentures shall be
equal to 100% of the principal amount of such Corresponding Junior Subordinated
Debentures then outstanding plus accrued and unpaid interest to the date fixed
for redemption.
For so long as the applicable Issuer Trust is the holder of all the
outstanding series of Corresponding Junior Subordinated Debentures, the proceeds
of any such redemption will be used by the Issuer Trust to redeem the related
Preferred Securities in accordance with their terms. PSO may not redeem a series
of Corresponding Junior Subordinated Debentures in part unless all accrued and
unpaid interest has been paid in full on all outstanding Corresponding Junior
Subordinated Debentures of such series for all interest periods terminating on
or prior to the Redemption Date.
CERTAIN COVENANTS OF PSO
PSO will covenant in the applicable Supplemental Indenture as to each
series of Corresponding Junior Subordinated Debentures, that if and so long as
(i) the Issuer Trust of the corresponding series of Preferred Securities and
Common Securities is the holder of all such Corresponding Junior Subordinated
Debentures, (ii) a Tax Event in respect of such Issuer Trust has occurred and is
continuing and (iii) PSO has elected, and has not revoked such election, to pay
Additional Sums in respect of such Preferred Securities and Common Securities,
PSO will pay to such Issuer Trust such Additional Sums. PSO will also covenant,
as to each series of Corresponding Junior Subordinated Debentures, that it will
not, and will not permit any subsidiary of PSO to, (i) declare, set aside or pay
any dividend or distribution on, or repurchase, redeem or otherwise acquire, or
make any sinking fund payment for the purchase or redemption of, any shares of
its capital stock, including the Common Stock of PSO, or (ii) make any payment
of principal, interest or premium, if any, on or repay or repurchase or redeem
any debt securities (including other Corresponding Junior Subordinated
Debentures) that rank PARI PASSU with or junior in interest to the Corresponding
Junior Subordinated Debentures or make any guarantee payments with respect to
the foregoing (other than (a) dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, (b)
conversions into or exchanges for shares of its capital stock, (c) redemptions,
purchases or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of PSO or any of its
subsidiaries and mandatory redemptions or sinking fund payments with respect to
any series of Preferred Stock of PSO that are subject to mandatory redemption or
sinking fund requirements, PROVIDED that the aggregate stated value of all such
series outstanding at the time of any such payment does not exceed five percent
of the aggregate of (1) the total principal amount of all bonds or other
securities representing secured indebtedness issued or assumed by PSO and then
outstanding and (2) the capital and surplus of PSO to be stated on the books of
account of PSO after giving effect to such payment, PROVIDED, HOWEVER, that any
moneys deposited in any sinking fund and not in violation of this provision may
thereafter be applied to the purchase or redemption of such Preferred Stock in
accordance with the terms of such sinking fund without regard to the
restrictions contained in this provision, and (d) payments under any guarantee
by PSO with respect to any securities of a subsidiary of PSO, provided that the
proceeds from the issuance of such securities were used to purchase Junior
Subordinated Debentures of any series under the Indenture) if at such time (i)
there shall have occurred any event of which PSO has actual knowledge that (a)
with the giving of notice or the lapse of time, or both, would constitute a
"Debenture Event of Default" under the Indenture with respect to Corresponding
Junior Subordinated Debentures of such series and (b) in respect of which PSO
shall not have taken reasonable steps to cure, (ii) PSO shall be in default with
respect to its payment of any obligations under the related Guarantee or (iii)
PSO shall have given notice of its selection of an Extension Period as provided
in the Indenture with respect to Corresponding Junior Subordinated Debentures of
such series and shall not have rescinded such notice, or such Extension Period,
or any extension thereof, shall be continuing.
PSO will also covenant, as to each series of Corresponding Junior
Subordinated Debentures, (i) to maintain directly or indirectly 100% ownership
of the Common Securities of the Issuer Trust to which Corresponding Junior
Subordinated Debentures have been issued, provided that certain successors which
are permitted pursuant to the Indenture may succeed to PSO's ownership of the
Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate any
Issuer Trust, except (a) in connection with a distribution of Corresponding
Junior Subordinated Debentures to the holders of the Preferred Securities and
Common Securities in liquidation of such Issuer Trust or (b) in connection with
certain mergers, consolidations or amalgamations permitted by the related Trust
Agreement and (iii) to use its reasonable efforts, consistent with the terms and
provisions of the related Trust Agreement, to cause such Issuer Trust to remain
classified as a "grantor trust" and not to be classified as an association
taxable as a corporation for United States federal income tax purposes. PSO will
also make certain additional agreements relating to the Indenture as provided in
the last sentence of the first paragraph under "Description of Junior
Subordinated Debentures--Modification of Indenture."
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEES
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Subordinated Debentures, such payments will
be sufficient to cover Distributions and other payments due on the related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debentures will be equal to the
sum of the aggregate Liquidation Amount of the related Preferred Securities and
related Common Securities; (ii) the interest rate and interest and other payment
dates on each series of Corresponding Junior Subordinated Debentures will match
the Distribution rate and Distribution and other payment dates for the related
Preferred Securities; (iii) PSO shall pay for all and any costs, expenses and
liabilities of such Issuer Trust except the Issuer Trust's obligations to
holders of its Preferred Securities under such Preferred Securities; and (iv)
each Trust Agreement further provides that the Issuer Trust will not engage in
any activity that is not consistent with the limited purposes of such Issuer
Trust.
Payments of Distributions and other amounts due on the Preferred
Securities (to the extent the Issuer Trust has funds available for the payment
of such Distributions) are irrevocably guaranteed by PSO as and to the extent
set forth under "Description of Guarantees." Taken together, PSO's obligations
under each series of Corresponding Junior Subordinated Debentures, the
Indenture, the related Trust Agreement, the related Expense Agreement, and the
related Guarantee provide a full, irrevocable and unconditional guarantee of
payments of distributions and other amounts due on the related series of
Preferred Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer Trust's obligations under the Preferred Securities. If and to the extent
that PSO does not make payments on any series of Corresponding Junior
Subordinated Debentures, such Issuer Trust will not pay Distributions or other
amounts due on related Preferred Securities. The Guarantees do not cover payment
of Distributions when the related Issuer Trust does not have sufficient funds to
pay such Distributions. In such event, the remedies of a holder of a series of
Preferred Securities are as described above under "Description of Junior
Subordinated Debentures--Debenture Events of Default," "Description of Preferred
Securities--Events of Default; Notice" and "--Enforcement of Certain Rights by
Holders of Preferred Securities." The obligations of PSO under each Guarantee
are subordinate and junior in right of payment to all Senior Indebtedness of
PSO.
Notwithstanding anything to the contrary in the Indenture, PSO has the
right to set off any payment it is otherwise required to make thereunder with
and to the extent PSO has theretofore made, or is concurrently on the date of
such payment making, a payment under the related Guarantee.
A holder of any related Preferred Security may institute a legal
proceeding directly against PSO to enforce its rights under the related
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the related Issuer Trust or any other person or entity.
Each Issuer Trust's Preferred Securities evidence a beneficial interest
in such Issuer Trust, and each Issuer Trust exists for the sole purpose of
issuing its Preferred Securities and Common Securities and investing the
proceeds thereof in Corresponding Junior Subordinated Debentures. A principal
difference between the rights of a holder of a Preferred Security and the rights
of a holder of a Corresponding Junior Subordinated Debenture is that a holder of
a Corresponding Junior Subordinated Debenture is entitled to receive from PSO
the principal amount of and interest accrued on Corresponding Junior
Subordinated Debentures held, while a holder of Preferred Securities is entitled
to receive Distributions from such Issuer Trust (or from PSO under the
applicable Guarantee) if and to the extent such Issuer Trust has funds available
for the payment of such Distributions.
Upon any voluntary or involuntary termination, winding-up or
liquidation of any Issuer Trust involving the liquidation of the Corresponding
Junior Subordinated Debentures, the holders of the related Preferred Securities
will be entitled to receive, out of assets held by such Issuer Trust and after
satisfaction of liabilities to creditors of such Issuer Trust as provided by
applicable law, the Liquidation Distribution in cash. See "Description of
Preferred Securities--Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of PSO, the Property Trustee,
as holder of the Corresponding Junior Subordinated Debentures, would be a
subordinated creditor of PSO, subordinated in right of payment to all Senior
Indebtedness, but entitled to receive payment in full of principal and interest,
before any shareholders of PSO receive payments or distributions. Since PSO is
the guarantor under each Guarantee and has agreed to pay for all costs, expenses
and liabilities of each Issuer Trust (other than the Issuer Trust's obligations
to the holders of its Preferred Securities), the positions of a holder of such
Preferred Securities and a holder of such Corresponding Junior Subordinated
Debentures relative to other creditors and to shareholders of PSO in the event
of liquidation or bankruptcy of PSO would be substantially the same.
A default or event of default under any Senior Indebtedness of PSO will
not constitute a default or Event of Default under the Indenture. However, in
the event of payment defaults under, or acceleration of, Senior Indebtedness of
PSO, the subordination provisions of the Indenture provide that no payments may
be made in respect of the Corresponding Junior Subordinated Debentures until
such Senior Indebtedness has been paid in full or any payment default thereunder
has been cured or waived. Failure to make required payments on any series of
Corresponding Junior Subordinated Debentures would constitute a Debenture Event
of Default under the Indenture with respect to such series.
PLAN OF DISTRIBUTION
PSO may sell any series of the Junior Subordinated Debentures, and each
Issuer Trust may sell any series of Preferred Securities, through underwriters,
dealers or agents, or directly to one or more purchasers. The Prospectus
Supplement with respect to the securities offered thereby will set forth the
terms of the offering of such Offered Securities, including the name or names of
any underwriters, dealers or agents, the purchase price of such Offered
Securities and the proceeds to PSO or the Issuer Trust, as the case may be, from
such sale, any underwriting discounts and other items constituting underwriters'
or agents' compensation, any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers.
If underwriters are involved in the sale of any Offered Securities,
such Offered Securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The underwriter or underwriters
with respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover page of such Prospectus Supplement. Unless otherwise set
forth in such Prospectus Supplement, the obligations of the underwriters to
purchase the Offered Securities will be subject to certain conditions precedent,
and the underwriters will be obligated to purchase all such Offered Securities
if any are purchased.
If a dealer is used in the sale of any Offered Securities, PSO will
sell such Offered Securities to the dealer, as principal. The dealer may then
resell such Offered Securities to the public at varying prices to be determined
by such dealer at the time of resale. The name of any dealer involved in a
particular offering of Offered Securities and any discounts or concessions
allowed or reallowed or paid to the dealer will be set forth in the Prospectus
Supplement relating to such offering.
The Offered Securities may be sold directly by PSO or through agents
designated by PSO from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the offer
or sale of any of the Offered Securities will be named, and any commissions
payable by PSO to such agent will be set forth, in the Prospectus Supplement
relating to such offer or sale. Unless otherwise indicated in such Prospectus
Supplement, any such agent will be acting on a reasonable best efforts basis for
the period of its appointment.
Certain of the underwriters, dealers or agents and their associates may
be customers of, engage in the transactions with or perform services for PSO
and/or the applicable Issuer Trust and/or any of their respective affiliates in
the ordinary course of business.
PSO will indicate in a Prospectus Supplement the extent to which it
anticipates that a secondary market for the Offered Securities will be
available.
Underwriters, dealers and agents participating in the distribution of
the Offered Securities may be deemed to be "underwriters" within the meaning of,
and any discounts and commissions received by them and any profit realized by
them on resale of such Offered Securities may be deemed to be underwriting
discounts and commissions under, the Securities Act. Subject to certain
conditions, PSO and the applicable Issuer Trustee may agree to indemnify the
several underwriters, dealers or agents and their controlling persons against
certain civil liabilities, including certain liabilities under the Securities
Act, or to contribute to payments any such person may be required to make in
respect thereof.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement,
certain legal matters in connection with the Offered Securities, including the
validity of the Junior Subordinated Debentures, the Indenture and the
Guarantees, will be passed upon for PSO and each Issuer Trust by Milbank, Tweed,
Hadley & McCloy, New York, New York, and for the underwriters by Sidley &
Austin, Chicago, Illinois. Sidley & Austin has from time to time represented CSW
and certain of its affiliates, including PSO, in connection with certain
matters. All matters of Oklahoma law will be passed upon by Doerner, Saunders,
Daniel & Anderson, Tulsa, Oklahoma. Certain matters of Delaware law relating to
the validity of the Preferred Securities, the enforceability of each Trust
Agreement and the creation of each Issuer Trust will be passed upon by Richards,
Layton & Finger, P.A., as special Delaware counsel to PSO and the Issuer Trusts.
Certain tax matters in connection with the Preferred Securities will be passed
upon for PSO and each Issuer Trust by Christy & Viener, New York, New York.
EXPERTS
The financial statements and schedules incorporated in this Prospectus
by reference from PSO's Annual Report on Form 10-K have been audited by Arthur
Andersen LLP, independent public accountants, as stated in their reports, which
are incorporated herein by reference and have been so incorporated herein in
reliance upon the authority of such firm as experts in accounting and auditing
in giving such reports.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS OR ANY OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PSO SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
3,000,000 PREFERRED SECURITIES
PSO CAPITAL I
% TRUST ORIGINATED
PREFERRED SECURITIES,
SERIES A ("TOPRSSM")
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
Risk Factors...................................................S- 6
PSO Capital I..................................................S- 9
Public Service Company of Oklahoma.............................S-10
Use of Proceeds................................................S-10
Consolidated Ratios of Earnings to Fixed
Charges and Earnings to Combined Fixed
Charges and Preferred Stock Dividend
Requirements.................................................S-11
Selected Financial Information.................................S-11
Accounting Treatment...........................................S-12
Certain Terms of the Series A Preferred
Securities...................................................S-12
Certain Terms of the Series A Debentures.......................S-14
ERISA Considerations...........................................S-16
Certain Federal Income Tax Considerations......................S-18
Underwriting...................................................S-21
Legal Opinions.................................................S-22
PROSPECTUS
Available Information......................................... 2
Incorporation of Certain Documents by
Reference................................................... 2
Public Service Company of Oklahoma............................ 4
The Issuer Trusts............................................. 4
Use of Proceeds............................................... 5
Consolidated Ratios of Earnings to Fixed
Charges and Earnings to Combined Fixed Charges
and Preferred Stock Dividend Requirements................... 5
Description of Junior Subordinated Debentures................. 6
Description of Preferred Securities........................... 18
Description of Guarantees..................................... 34
Description of Corresponding Junior
Subordinated Debentures.................................... 37
Relationship Among the Preferred Securities,
the Corresponding Junior Subordinated
Debentures and the Guarantees.............................. 39
Plan of Distribution.......................................... 40
Legal Opinions................................................ 42
Experts....................................................... 42
GUARANTEED, AS DESCRIBED HEREIN, BY
PSO
PUBLIC SERVICE
COMPANY OF OKLAHOMA
--------------------
PROSPECTUS SUPPLEMENT
--------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
INCORPORATED
SMITH BARNEY INC.
___________, 1997
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Registration fee......................................... $ 22,728
*Public Utility Holding Company Act filing fee............ 2,000
*Counsel fees.......................................... 80,000
*Accountants' fees.................................... 8,000
*Stock exchange listing fees.......................... 36,900
*Trustee fees.......................................... 10,000
*Rating agency fees................................... 18,000
*Blue sky expenses..................................... 1,250
*Printing and delivery of registration statement,
prospectus, certificates, etc...................... 20,000
*Expenses of Central and South West Services, Inc......... 3,000
*Miscellaneous expenses................................... 4,689
-----
Total................................................ $206,567
- -------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 1031 of the Oklahoma General Corporation Act provides broadly
for indemnification of directors and officers against claims and liabilities
against them in their capacities as such. PSO's bylaws also provide for the
indemnification of officers and directors by PSO. In addition, PSO has purchased
Directors' and Officers' Liability and Company Reimbursement Liability Insurance
which, in certain circumstances, provide for payments to the directors and
officers of PSO, in the event of such liabilities.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
A list of exhibits included as part of this Registration
Statement is set forth in an Exhibit Index, which immediately
precedes such exhibits.
(b) Financial Statement Schedules
None.
ITEM 17. UNDERTAKINGS.
(a) Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)
(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement;
PROVIDED, HOWEVER, that any increase or decrease in volume of
securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) That, for purposes of determining liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) To provide to the underwriters at the closing specified in
the underwriting agreements certificates in such denominations and
registered in such names as required by the underwriter to permit prompt
delivery to each purchaser.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the provisions described under Item 15,
or otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrants in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PSO
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tulsa, State of Oklahoma, on February 5, 1997.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By: /S/ WENDY G. HARGUS
Wendy G. Hargus
Treasurer
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes and appoints
Wendy G. Hargus and Stephen D. Wise or either of them, as his or her
attorney-in-fact, with full power of substitution and resubstitution to sign and
file on his or her behalf individually and in each such capacity stated below
any and all amendments and post-effective amendments to this Registration
Statement and any registration statement of PSO relating to the Preferred
Securities, Junior Subordinated Debentures (including Corresponding Junior
Subordinated Debentures) or Guarantees filed after the date hereof pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, as fully as such
person could in person, hereby verifying and confirming all that said
attorney-in-fact, or either of them, or their or his substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on February 5, 1997.
SIGNATURE TITLE
/S/ T.D. CHURCHWELL President (principal executive officer);
T.D. Churchwell Director
/S/ WENDY G. HARGUS Treasurer (principal financial officer)
Wendy G. Hargus
/S/ R. RUSSELL DAVIS Controller and Chief Accounting Officer
R. Russell Davis (principal accounting officer)
Director
E.R. Brooks
/S/ GLENN FILES Director
Glenn Files
<PAGE>
/S/ DR. ROBERT B. TAYLOR, JR. Director
Dr. Robert B. Taylor, Jr.
/S/ WILLIAM R. MCKAMEY Director
William R. McKamey
Director
Paula Marshall-Chapman
/S/ PAUL K. LACKEY, JR. Director
Paul K. Lackey, Jr.
/S/ HARRY A. CLARK Director
Harry A. Clark
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PSO Capital
I certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on February 5, 1997.
PSO CAPITAL I
By /S/ WENDY G. HARGUS
Wendy G. Hargus, as
Administrative Trustee
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PSO Capital
II certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on February 5, 1997.
PSO CAPITAL II
By/S/ WENDY G. HARGUS
Wendy G. Hargus, as
Administrative Trustee
EXHIBIT INDEX
Exhibit Sequential
NO. DESCRIPTION PAGE
1(a) Form of Underwriting Agreement relating to Junior Subordinated
Debentures not issued in connection with Preferred Securities.
1(b) Form of Underwriting Agreement to be used in connection with the
issuance of Preferred Securities.
4(a) Form of Indenture between PSO and The Bank of New York, as Trustee, to
be used in connection with the issuance of the Junior Subordinated
Debentures and Corresponding Junior Subordinated Debentures.
4(b) Form of Supplemental Indenture to Indenture to be used in connection
with the issuance of Junior Subordinated Debentures (other than
Corresponding Junior Subordinated Debentures).
4(c) Form of Supplemental Indenture to Indenture to be used in connection
with the issuance of Corresponding Junior Subordinated Debentures and
Preferred Securities.
4(d) Form of Junior Subordinated Debenture (included in Exhibit 4(c) above).
4(e) Certificate of Trust of PSO Capital I (Certificate for PSO Capital II
will be substantially identical except for names and dates).
4(f) Trust Agreement of PSO Capital I (Trust Agreement for PSO Capital II
will be substantially identical except for names and dates).
4(g) Form of Amended and Restated Trust Agreement (Agreements for PSO Capital
I and PSO Capital II are substantially identical except for names and
dates).
4(h) Form of Preferred Security Certificate for PSO Capital I and PSO
Capital II. (included in Exhibit 4(g) above).
4(i) Form of Guarantee Agreement (Agreements for PSO Capital I and PSO
Capital II are substantially identical except for names and dates).
5(a) Opinion of Milbank, Tweed, Hadley & McCloy with respect to the Junior
Subordinated Debentures and Guarantees.
5(b) Opinion of Richards, Layton & Finger, special Delaware counsel, with
respect to the Preferred Securities of PSO Capital I.
5(c) Opinion of Richards, Layton & Finger, special Delaware counsel, with
respect to the Preferred Securities of PSO Capital II.
5(d) Opinion of Doerner, Saunders, Daniel & Anderson, with respect to the
Junior Subordinated Debentures and Guarantees.
8 Opinion of Christy & Viener with respect to United States Federal Income
Tax Matters.
*12(a) Statements re Computation of Ratios of Earnings to Fixed Charges
(Exhibit 12.2, Form 10-K for the Year ended December 31, 1995 and
Exhibit 12.2, Form 10-Q for the Quarter ended September 30, 1996).
12(b) Statements re Computation of Ratios of Earnings to Combined Fixed
Changes and Preferred Stock Dividend Requirements.
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of Milbank, Tweed, Hadley & McCloy (included in Exhibit 5(a)
above).
23(c) Consents of Richards, Layton & Finger (included in Exhibits 5(b) and 5(c)
above).
23(d) Consent of Christy & Viener (included in Exhibit 8 above).
23(e) Consent of Doerner, Saunders, Daniel & Anderson (included in Exhibit 5(d)
above).
24 Powers of Attorney (included on page II-3 of Registration Statement).
25(a) Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Indenture between
PSO and The Bank of New York.
25(b) Statement of Eligibility under the Trust Indenture Act of 1939 of The
Bank of New York, as Guarantee Trustee for the Guarantee for PSO Capital
I.
25(c) Statement of Eligibility under the Trust Indenture Act of 1939 of The
Bank of New York, as Property Trustee for the Amended and Restated Trust
Agreement of PSO Capital I.
25(d) Statement of Eligibility under the Trust Indenture Act of 1939 of The
Bank of New York, as Guarantee Trustee for the Guarantee for PSO Capital
II.
25(e) Statement of Eligibility under the Trust Indenture Act of 1939 of The
Bank of New York, as Property Trustee for the Amended and Restated Trust
Agreement of PSO Capital II.
- ------------------
* Incorporated by reference.
Exhibit 1(a)
Public Service Company of Oklahoma
Junior Subordinated Debentures
- -------------------------------------------------------------------------------
UNDERWRITING AGREEMENT
............. ,1997
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
[Names of Co-Representatives,]
c/o Merrill Lynch & Co.
World Financial Center - North Tower
New York, New York 10281
Ladies and Gentlemen:
From time to time Public Service Company of Oklahoma, an Oklahoma
corporation (the "Company"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of the Company's Junior Subordinated
Deferrable Interest Debentures (the "Securities"), to be issued pursuant to an
Indenture (the "Indenture") between the Company and The Bank of New York, as
trustee, as heretofore supplemented and amended, including by the supplemental
indenture relating to the Designated Securities (as hereinafter defined). The
Securities specified in Schedule II to such Pricing Agreement are referred to as
the "Designated Securities" with respect to such Pricing Agreement.
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the Indenture.
1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase any of the Securities. The obligation of
the Company to issue and sell any of the Securities and the obligation of any of
the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified therein.
Each Pricing Agreement shall specify the aggregate principal amount of such
Designated Securities, the initial public offering price of such Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters and the principal amount of
such Designated Securities to be purchased by each Underwriter and shall set
forth the date, time and manner of delivery of such Designated Securities, and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333- ) (the
"Initial Registration Statement") in respect of the Securities,
including a prospectus relating to the Securities, and the offering
thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "Act"), has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to such registration statement, but including
all documents incorporated by reference in the prospectus included
therein, to the Representatives for each of the other Underwriters, has
been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Act, which becomes effective upon filing, no other document
with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed, or
transmitted for filing, with the Commission (other than prospectuses
filed pursuant to Rule 424 of the rules and regulations of the
Commission under the Act, each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of the
Initial Registration Statement, and post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened, to the
knowledge of the Company, by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) under the Act, is hereinafter called
a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the 462(b) Registration Statement, if any,
including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the Initial Registration Statement
became effective (but excluding Form T-1) or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, each as amended at the time such part of the Initial
Registration Statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the
Securities in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of
this Agreement is hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to the applicable form under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a)
or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the
form in which it is filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such
filing).
(b) The documents incorporated by reference in the Prospectus, as
amended or supplemented when they became effective or were filed with
the Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and any further documents so
filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter of Designated
Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities.
(c) The Registration Statement, as of its effective date, and the
Prospectus, at the time it is filed with the Commission, conform and
will conform, as the case may be, and any further amendments or
supplements to the Registration Statement or the Prospectus will
conform, in all material respects with the applicable requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission
thereunder; neither the Registration Statement, nor any amendment
thereto, as of the applicable effective date, contains an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and the Prospectus and any amendment or supplement thereto
at the time it is filed with the Commission, does not include and will
not include an untrue statement of a material fact and does not omit and
will not omit to state a material fact necessary to make the statements
therein in light of the circumstances under which they were made not
misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to the part of the Registration Statement that
constitutes the statement of eligibility on Form T-1 under the Trust
Indenture Act of the Property Trustee, the Delaware Trustee and the
Guarantor Trustee (as defined in the Registration Statement) and any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in
the Prospectus as amended or supplemented relating to such Securities.
(d) Since the respective dates as of which information is given in
the Registration Statement and in the Prospectus as amended or
supplemented, there has been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, or
(ii) adverse development concerning the business or assets of the
Company and its subsidiaries, taken as a whole, which would result in a
material adverse change in the prospective financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended or supplemented
(including the financial statements and notes thereto included or
incorporated by reference therein).
(e) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Oklahoma, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus as amended or
supplemented, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business so as to require such qualification except where
the failure to so qualify would not have a material adverse effect on
the financial condition of the Company and its subsidiaries, taken as a
whole.
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable.
(g) The Company has no significant subsidiaries, as "significant
subsidiary" is defined in Rule 405 of Regulation C of the rules and
regulations promulgated by the Commission under the Act.
(h) This Agreement has been duly authorized, executed and delivered
by the Company.
(i) The Securities have been duly and validly authorized by the
Company, and, when executed, authenticated and delivered in accordance
with the Indenture and pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Securities, such Designated
Securities will be duly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture; the Indenture has
been duly and validly authorized and duly qualified under the Trust
Indenture Act and, at the Time of Delivery (as defined in Section 4
hereof) for such Designated Securities, the Indenture will constitute a
valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Securities conform in all material respects to the description thereof
contained in the Registration Statement and the Designated Securities
will conform in all material respects to the description thereof
contained in the Prospectus as amended or supplemented.
(j) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject, which are required to be
described in the Prospectus, as amended or supplemented; and there are
no contracts or other documents that are required to be described in the
Registration Statement or the Prospectus as amended or supplemented or
to be filed as exhibits to the Registration Statement that are not
described or filed as required.
(k) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its
business and (iii) is in compliance with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(l) The Commission has entered an order (the "Order") under the
Public Utility Holding Company Act of 1935, as amended (the "1935 Act"),
permitting to become effective the Form U-1 Application-Declaration
filed by the Company authorizing, among other things, the issuance and
sale of the Securities by the Company. A copy of such order heretofore
entered by the Commission has been or will be delivered to Merrill
Lynch, Pierce, Fenner & Smith Incorporated on behalf of the
Representatives.
(m) The Corporation Commission of Oklahoma has entered an order
authorizing or approving, among other things, the issuance and sale of
the Securities by the Company. A copy of such order heretofore entered
by the Commission has been or will be delivered to Merrill Lynch,
Pierce, Fenner & Smith Incorporated on behalf of the Representatives.
(n) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture,
this Agreement and any Pricing Agreement, and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture or other material agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the provisions
of the Restated Certificate of Incorporation or By-laws of the Company
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body, other than the Order and the order of the Corporation
Commission of Oklahoma, which have been duly obtained and are in full
force and effect, is required, for the issue and sale of the Securities
or the consummation by the Company of the transactions contemplated by
this Agreement or any Pricing Agreement or the Indenture, except such as
have been, or will have been prior to the Time of Delivery, obtained
under the Act, the Exchange Act and the Trust Indenture Act and such
consents, approvals, authorizations, orders, licenses, certificates,
permits, registrations or qualifications as have already been obtained,
or as may be subsequently obtained in the ordinary course of business,
or as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters.
(o) The Company is not in violation of its organizational documents
or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture
or other material agreement or instrument to which it is a party or by
which it or any of its properties may be bound.
(p) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(q) There are no contracts, agreements or understandings between the
Company and any person that grant such person the right to require the
Company to file a registration statement under the Act with respect to
any capital stock of the Company owned or to be owned by such person or
to require the Company to include such securities in the securities
registered pursuant to the Registration Statement.
(r) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Securities, the several Underwriters propose to offer the Designated Securities
for sale upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor in immediately
available funds by wire transfer to an account designated in writing by the
Company as specified in such Pricing Agreement, all in the manner and at the
place and time and date as the Representatives and the Company may agree upon in
writing, such time and date being herein called the "Time of Delivery".
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities, or, if
applicable, such time as may be required by Rule 424(b) under the Act;
to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of the
Pricing Agreement relating to such Securities and prior to any Time of
Delivery for such Securities which shall be disapproved in writing by
the Representatives for such Securities promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment or
supplement after any Time of Delivery for such Securities and furnish
the Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a prospectus
is required in connection with the offering or sale of such Securities,
and during such same period to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
with the Commission, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any prospectus
relating to the Securities, of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, promptly to use its
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of such
Securities, provided that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to qualify as a
dealer in Securities or to file any general consents to service of
process in any jurisdiction;
(c) To use its best efforts to furnish, prior to 12:00 noon, New
York City time, on the New York Business Day next succeeding the date of
the applicable Pricing Agreement and from time to time during the period
when a prospectus is required to be delivered under the Act by any
Underwriter or dealer, the Underwriters with copies of the Prospectus as
amended or supplemented in New York City in such quantities as the
Representatives may reasonably request, and if, in the opinion of
counsel for the Company, the delivery of a prospectus is required, at
any time in connection with the offering or sale of the Securities and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would in the opinion of
counsel for the Company, include an untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply in the
opinion of counsel for the Company, with the Act, the Exchange Act or
the Trust Indenture Act, to notify the Representatives and upon their
request to file such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many copies as
the Representatives may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus, if any, which will
correct such statement or omission or effect such compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the earlier of (i) the date, after the Time of Delivery, on which the
distribution of the Securities ceases, as determined by the
Representatives on behalf of the Underwriters and (ii) 30 days after the
Time of Delivery for such Designated Securities, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder,
any debt securities of the Company which mature more than one year after
such Time of Delivery, that are substantially similar to the Designated
Securities, without the prior consent of the Representatives; and
(f) If the Company elects to rely upon Rule 462(b), to file a Rule
462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m. Washington, D.C. time, on the date of the
applicable Pricing Agreement, and at the time of filing either pay to
the Commission the filing fee for the Rule 462(b) Registration Statement
or give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that it
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers, excluding the fees and disbursements of counsel for
the Underwriters, except as set forth in clause (iii) below and Section 11
hereof; (ii) the cost of printing or producing any Agreement among Underwriters,
this Agreement, any Pricing Agreement, the Indenture, any Blue Sky Memorandum
and any other documents in connection with the offering, purchase, sale and
delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky surveys, not exceeding however $6,000 in the
aggregate; (iv) any fees charged by securities rating services for rating the
Securities; (v) the cost of qualifying the Securities with The Depository Trust
Company; (vi) the cost of preparing the Securities; (vii) all reasonable fees
and expenses of any trustee and its counsel; and (viii) the cost of preparing
certificates for the Securities. It is understood, however, that, except as
provided in this Section and Sections 8 and 11 hereof, the Underwriters will pay
all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of each Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Securities shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m. Washington, D.C. time, on the date of the
applicable Pricing Agreement; no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Company or the Representatives, threatened by the
Commission;
(b) Sidley & Austin, counsel for the Underwriters shall have
furnished to the Representatives such opinion or opinions (a draft of
each such opinion is attached as Annex II(a) hereto), dated each Time of
Delivery for such Designated Securities, with respect to the
incorporation of the Company; insofar as the federal laws of the United
States or the General Corporation Law of the State of Delaware is
concerned, the validity of the Securities; the Registration Statement
and the Prospectus; and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) Milbank, Tweed, Hadley & McCloy, counsel for the Company shall
have furnished to the Representatives their written opinion (a draft of
such opinion is attached as Annex II(b) hereto), dated each Time of
Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect set forth in such
Annex;
(d) Doerner, Saunders, Daniel & Anderson, special Oklahoma counsel
for the Company, shall have furnished to the Representatives their
written opinion (a draft of such opinion is attached as Annex II(c)
hereto), dated each Time of Delivery for such Designated Securities, in
form and substance satisfactory to the Representatives, to the effect
set forth in such Annex;
(e) [ ], special Texas counsel for the Company, shall have furnished
to the Representatives their written opinion (a draft of such opinion is
attached as Annex II(d) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(f) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to the Designated Securities and at each Time of Delivery
for such Designated Securities, Arthur Andersen LLP shall have furnished
to the Representatives a letter, dated the effective date of the
Registration Statement or the date of the most recent report filed with
the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex III hereto, and
with respect to such letter dated such Time of Delivery, as to such
other matters as the Representatives may reasonably request and in form
and substance satisfactory to the Representatives (a draft of the form
of letter to be delivered at a time prior to the execution of the
Pricing Agreement, on the effective date of any post-effective amendment
to the Registration Statement and as of each Time of Delivery may be
attached as Annex III hereto);
Subsequent to the respective dates as of which information is
given in each of the Registration Statement and the Prospectus, there
shall not have been any change or decrease specified in the letters
required by subsection (e) of this Section 7 which is, in the judgment
of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the
delivery of the Designated Securities as contemplated by the
Registration Statement and the Prospectus;
(g) The Indenture shall have been executed and delivered, in a form
reasonably satisfactory to the Representatives;
(h) Since the respective dates as of which information is given in
each of the Registration Statement and in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated
Securities there shall have been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, or
(ii) any adverse development concerning the business or assets of the
Company and its subsidiaries, taken as a whole, which would result in a
material adverse change in the prospective financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended prior to the date of
the Pricing Agreement relating to the Designated Securities (including
the financial statements and notes thereto included or incorporated by
reference in the Registration Statement);
(i) On or after the date of the Pricing Agreement relating to the
Designated Securities no downgrading shall have occurred in the rating
accorded the Securities or the Company's debt securities or preferred
stock by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2)
under the Act;
(j) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Company's securities on the New
York Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or
(iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of war, if the effect of
any such event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Designated Securities on the
terms and in the manner contemplated in the Prospectus as first amended
or supplemented relating to the Designated Securities; and
(k) The Company shall have furnished or caused to be furnished to
the Representatives at each Time of Delivery for Designated Securities
certificates of officers of the Company satisfactory to the
Representatives, as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder to
be performed at or prior to such Time of Delivery, as to the matters set
forth in subsections (a) and (h) of this Section and as to such other
matters as the Representatives may reasonably request. 8. (a) The
Company agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become
subject under the Securities Act, the Exchange Act or the common law or
otherwise, and to reimburse each such Underwriter or such controlling
person for any reasonable legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) incurred by it or
them in connection with defending against any such losses, claims,
damages or liabilities, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) or any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the indemnity agreement contained in
this subsection (a) shall not apply to any such losses, claims, damages
or liabilities arising out of or based upon (i) any such untrue
statement or alleged untrue statement, or any such omission or alleged
omission, if such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by any
of the Underwriters for use in the Registration Statement or the
Prospectus or any amendment or supplement to either thereof or (ii) the
failure of any Underwriter to deliver (either directly or through the
Representatives) a copy of the Prospectus (excluding the documents
incorporated therein by reference), or of the Prospectus as amended or
supplemented after it shall have been amended or supplemented by the
Company (excluding the documents incorporated therein by reference), to
any person to whom a copy of any preliminary prospectus shall have been
delivered by or on behalf of such Underwriter and to whom any Designated
Securities shall have been sold by such Underwriter, as such delivery
may be required by the Securities Act and the rules and regulations of
the Commission thereunder.
(b) Each of the Underwriters, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its officers who signs the
Registration Statement, each of its directors, each person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, each other Underwriter and each person, if any, who so
controls such other Underwriter, from and against any and all losses, claims,
damages or liabilities, joint or several, to which any one or more of them may
become subject under the Securities Act, the Exchange Act or the common law or
otherwise, and to reimburse each of them for any reasonable legal or other
expenses (including, to the extent hereinafter provided, reasonable counsel
fees) incurred by them in connection with defending against any such losses,
claims, damages or liabilities of the character above specified arising out of
or based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus or any amendment
to the Registration Statement or amendment or supplement to the Prospectus or
upon any omission or alleged omission to state in any thereof a material fact
required to be stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by such
Underwriter for use in the Registration Statement or the Prospectus or any
amendment or supplement to either thereof or (ii) the failure of such
Underwriter, due to the negligence of such Underwriter, to deliver (either
directly or through the Representatives) a copy of the Prospectus (excluding the
documents incorporated therein by reference), or of the Prospectus as amended or
supplemented after it shall have been amended or supplemented by the Company
(excluding the documents incorporated therein by reference), to any person to
whom a copy of any preliminary prospectus shall have been delivered by or on
behalf of such Underwriter and to whom any Designated Securities shall have sold
by such Underwriter, as such delivery may be required by the Securities Act and
the rules and regulations of the Commission thereunder.
(c) Promptly after receipt by a party indemnified under this
Section 8 (an "indemnified party") of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made against
a party granting an indemnity under this Section 8 (the "indemnifying party"),
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof (thereby conceding that the action in question is subject to
indemnification by the indemnifying party), with counsel reasonably satisfactory
to such indemnified party, and shall pay the fees and disbursements of such
counsel related to such action; provided, however, that if the defendants in any
such action include both the indemnified party and the indemnifying party and
representation of both parties would be inappropriate due to actual or potential
differing interests between them, the indemnified party or parties shall have
the right to select separate counsel. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel), approved by the
Representatives in the case of subsection (a), representing the indemnified
parties under subsection (a) who are parties to such action and that all such
fees and expenses shall be reimbursed as they are incurred) or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that such liability
shall be only in respect of the counsel referred to in clause (i) or (ii). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section 8 shall be
unenforceable under applicable law by an indemnified party, the Company agrees
to contribute to such indemnified party with respect to any and all losses,
claims, damages and liabilities for which such indemnification provided for in
this Section 8 shall be unenforceable, in such proportion as shall be
appropriate to reflect the relative fault of the Company on the one hand and the
indemnified party on the other hand in connection with the statements or
omissions which have resulted in such losses, claims, damages and liabilities,
as well as any other relevant equitable considerations; provided, however, that
no indemnified party guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
the Company if the Company is not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the indemnified party and each such party's relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and each of the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
subparagraph were to be determined solely by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to above.
(e) The amount paid or payable by an indemnified party as a result
of the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
(f) The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company in the
Underwriting Agreement shall remain operative and in full force regardless of
(i) any termination of the Underwriting Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, their directors or officers or any person
controlling the Company and (iii) acceptance of and payment for any of the
Designated Securities.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
twenty-four hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of twenty-four hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall have the right
to postpone a Time of Delivery for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
may be required in the opinion of counsel for the Guarantor. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities with respect to which such Pricing
Agreement shall have been terminated except as provided in Sections 6 and 8
hereof; but, if any Pricing Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of the Pricing
Agreement (excluding those conditions set forth in Section 7(i) hereof), or if
for any reason the Company shall be unable to perform its obligations under the
Pricing Agreement, the Company will reimburse the Underwriters or such
Underwriters who have so terminated the Pricing Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of Underwriters' counsel) reasonably incurred by such Underwriters
in connection with the Pricing Agreement or the offering contemplated
thereunder. The Company shall not in any event be liable to any of the
Underwriters for damages on account of loss of anticipated profits.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us ____ counterparts hereof.
Very truly yours,
Public Service Company of Oklahoma
By:
-----------------------------
Name:
Title:
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
[Names of Co-Representatives]
By: _______________________________
(Merrill Lynch, Pierce, Fenner
& Smith Incorporated)
On behalf of each of the Underwriters
ANNEX I
PRICING AGREEMENT
Merrill Lynch, Pierce, Fenner & Smith Incorporated
[Names of Co-Representative(s)],
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Merrill Lynch & Co.,
World Financial Center - North Tower,
New York, New York 10281
......... , 1997
Ladies and Gentlemen:
Public Service Company of Oklahoma, an Oklahoma corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated __________, 1997 (the "Underwriting Agreement"),
between the Company on the one hand and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, [and (names of Co-Representatives named therein)] on the other
hand, to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the "Designated
Securities"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us______ counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
Public Service Company of Oklahoma
By:
-------------------------
Name:
Title:
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
[Name(s) of Co-Representative(s)]
By: _____________________________
(Merrill Lynch, Pierce, Fenner
& Smith Incorporated.)
On behalf of each of the Underwriters
SCHEDULE I
Principal
Amount of
Designated
Securities
to be
UNDERWRITER PURCHASED
Merrill Lynch, Pierce, Fenner & Smith Incorporated $
[Name(s) of Co-Representative(s)]
[Names of other Underwriters]
Total $
SCHEDULE II
Title of Designated Securities:
[ %] Junior Subordinated Deferrable Interest
Debentures due ,
Aggregate principal amount:
[$]
Price to Public:
% of the principal amount of the Designated Securities, plus accrued
interest[, if any,] from
to [and accrued amortization[, if any,]
from to ]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus
accrued interest from
to [and accrued amortization[, if any,] from
to ]
Form of Designated Securities:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the
Representatives]] [Book-entry only form represented by one or more global
securities deposited with The Depository Trust Company ("DTC") or its
designated custodian for trading in the Same Day Funds Settlement System
of DTC, and to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
Specified Funds for Payment of Purchase Price:
[Federal (same day) Funds [by wire transfer]]
[Describe any blackout provisions with respect to the Designated
Securities]
Time of Delivery:
a.m. (New York City time), , 19
Indenture:
Indenture dated ,19 , between the Company and ,
as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates, commencing ....................., 19..]
Extension of Interest Payment Period:
[No provisions for extension]
[The Company has the right, [at any time] during the term of the
Designated Securities, to extend any interest payment period of such Designated
Securities [at any time and from time to time] for a period not to exceed [ ]
and not to extend beyond the Maturity Date] Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of [$ ] or an integral multiple thereof, [on or after , at the
following redemption prices (expressed in percentages of principal
amount). If [redeemed on or before , %, and if] redeemed during the
12-month period beginning ,
Redemption
YEAR PRICE
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at the election of
the Company, at a redemption price equal to the principal amount thereof,
plus accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund
to retire [$ ] principal amount of Designated Securities on in each of the
years through
at 100% of their principal amount plus accrued interest[, together
with [cumulative] [noncumulative] redemptions at the option of the Company
to retire an additional [$ ] principal amount of Designated Securities in
the years through at 100% of their principal amount plus accrued
interest.]
[IF DESIGNATED SECURITIES ARE EXTENDABLE DEBT SECURITIES, INSERT--
Extendable provisions:
Designated Securities are repayable on , [insert date and years], at the
option of the holder, at their principal amount with accrued interest. The
initial annual interest rate will be %, and thereafter the annual interest
rate will be adjusted on , and to a rate not less than % of the effective
annual interest rate on U.S. Treasury obligations with -year maturities as
of the [insert date 15 days prior to maturity date] prior to such [insert
maturity date].]
[IF DESIGNATED SECURITIES ARE FLOATING RATE DEBT SECURITIES,
INSERT-- Floating rate provisions:
Initial annual interest rate will be % through [and thereafter will
be adjusted [monthly][on each , , and ][to an annual rate
of % above the average rate for -year [month][securities]
[certificates of deposit] issued by
and [insert names of banks].][and the annual interest rate
[thereafter][from
through ] will be the interest yield equivalent of the weekly
average per annum market discount rate for -month Treasury bills plus % of
Interest Differential (the excess, if any, of (i) the then current weekly
average per annum secondary market yield for -month certificates of
deposit over (ii) the then current interest yield equivalent of the weekly
average per annum market discount rate for -month Treasury bills); [from
and thereafter the rate will be the then current interest yield equivalent
plus % of Interest Differential].]
Defeasance provisions:
Closing location for delivery of Designated Securities:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Additional Closing Conditions:
PARAGRAPH 7(G) OF THE UNDERWRITING AGREEMENT SHOULD BE MODIFIED IN THE EVENT
THAT THE SECURITIES ARE DENOMINATED IN OR INDEXED TO, A CURRENCY OTHER THAN
THE U.S. DOLLAR, MORE THAN ONE CURRENCY OR IN A COMPOSITE CURRENCY. THE
COUNTRY OR COUNTRIES ISSUING SUCH CURRENCY SHOULD BE ADDED TO THE BANKING
MORATORIUM AND HOSTILITIES CLAUSES AND THE FOLLOWING ADDITIONAL CLAUSE
SHOULD BE ADDED TO THE PARAGRAPH (THE ENTIRE PARAGRAPH SHOULD BE RESTATED,
AS AMENDED):
"; ( ) the imposition of the proposal of exchange controls by any
governmental authority n [INSERT THE COUNTRY OR COUNTRIES ISSUING SUCH
CURRENCY, CURRENCIES OR COMPOSITE CURRENCY]".
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]* :
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* A DESCRIPTION OF PARTICULAR TAX, ACCOUNTING OR OTHER UNUSUAL FEATURES (SUCH AS
THE ADDITION OF EVENT RISK PROVISIONS) OF THE DESIGNATED SECURITIES SHOULD BE
SET FORTH, OR REFERENCED TO AN ATTACHED AND ACCOMPANYING DESCRIPTION, IF
NECESSARY, TO ENSURE AGREEMENT AS TO THE TERMS OF THE DESIGNATED SECURITIES TO
BE PURCHASED AND SOLD. SUCH A DESCRIPTION MIGHT APPROPRIATELY BE IN THE FORM IN
WHICH SUCH FEATURES WILL BE DESCRIBED IN THE PROSPECTUS SUPPLEMENT FOR THE
OFFERING.
ANNEX III
Form of letter of Arthur Andersen LLP
to be delivered pursuant to Section 7(f)
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Prospectus or the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act,
as applicable, and the related published rules and regulations
thereunder, and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been separately
furnished to the representatives of the Underwriters (the
"Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or the Company's quarterly reports on Form 10-Q
incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which have been separately furnished to the
Representatives; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in Item 6 of the Company's
Annual Report on Form 10-K for the most recent fiscal year agrees with
the corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for such five fiscal years
which were included or incorporated by reference in the Company's Annual
Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Company and
its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus do not comply
as to form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules
and regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus or included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus for them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
or incorporated by reference in the Company's Annual Report on Form
10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the
latest financial statements included or incorporated by reference
in the Prospectus) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared
with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case
for changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus
to the specified date referred to in clause (E) there were any
decreases in consolidated net revenue or operating profit or the
total or per share amounts of consolidated net income or other
items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared
with the comparable period in the preceding year and with any other
period of corresponding length specified by the Representatives,
except in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found
them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement and to the Prospectus as amended or
supplemented (including all documents incorporated by reference therein) for the
purposes of the letter delivered either (i) on the effective date of any
post-effective amendment to the Registration Statement or Rule 462(b)
Registration Statement filed subsequent to the date of the Underwriting
Agreement or (ii) at the Time of Delivery, as the case may be.
Exhibit 1(b)
PSO Capital I
Trust Originated Preferred Securities SM ("TOPrS"SM)*
(liquidation preference $25 per preferred security)
guaranteed by
Public Service Company of Oklahoma
UNDERWRITING AGREEMENT
, 1997
Merrill Lynch, Pierce, Fenner & Smith Incorporated
[Names of Co-Representatives]
c/o Merrill Lynch & Co.
World Financial Center - North Tower,
New York, New York 10281
Ladies and Gentlemen:
From time to time, PSO Capital I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust") and Public Service Company
of Oklahoma, an Oklahoma corporation, as depositor of the Trust and as guarantor
(the "Guarantor"), each proposes to enter into one or more Pricing Agreements
(each a "Pricing Agreement") in the form of Annex I hereto, with such additions
and deletions as the parties thereto may determine, and, subject to the terms
and conditions stated herein and therein, to issue and sell to the firms named
in Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of the Trust's Trust Originated Preferred
SecuritiesSM (liquidation preference $25 per preferred security) (the
"Securities") representing undivided beneficial interests in the assets of the
Trust, guaranteed by the Guarantor as to the payment of distributions, and as to
payments on liquidation or redemption, as set forth in a guarantee agreement
(the "Guarantee") between the Guarantor and The Bank of New York, as trustee
(the "Guarantee Trustee"). The Securities represented by such Pricing Agreement
are referred to as the "Designated Securities" with respect to such Pricing
Agreement. The proceeds of the sale of the Securities and certain of the Trust's
Common Securities (liquidation preference $25 per common security) (the "Common
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*"Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
Securities") by the Trust are to be invested in Junior Subordinated Deferrable
Interest Debentures (the "Subordinated Debentures") of the Guarantor, to be
issued pursuant to an Indenture (the "Indenture") between the Guarantor and The
Bank of New York, as trustee (the "Debenture Trustee"), as heretofore
supplemented and amended, including by the supplemental indenture relating to
the Subordinated Debentures in which the proceeds of the sale of the Designated
Securities are to be invested.
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Trust to sell any of the Securities or as an obligation of
any of the Underwriters to purchase any of the Securities. The obligation of the
Trust to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate number of Designated Securities,
the initial public offering price of such Securities or the manner of
determining such price, the terms of the Designated Securities, the purchase
price to the Underwriters of such Designated Securities, the names of the
Underwriters of such Designated Securities, the names of the Representatives of
such Underwriters, the number of such Designated Securities to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Securities, and payment therefor. The Pricing Agreement shall also specify
(to the extent not set forth in the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. Each of the Guarantor and the Trust, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333- ) (the
"Initial Registration Statement") in respect of the Securities, the
Guarantee and the Subordinated Debentures (collectively, the "Registered
Securities"), including a prospectus relating to the Registered
Securities, and the offering thereof from time to time in accordance
with Rule 415 under the Securities Act of 1933, as amended (the "Act"),
has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered or to be
delivered to the Representatives and, excluding exhibits to such
registration statement but including all documents incorporated by
reference in the prospectus included therein, to the Representatives for
each of the other Underwriters has been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Act, which becomes
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission
(other than prospectuses filed pursuant to Rule 424 of the rules and
regulations of the Commission under the Act, each in the form heretofore
delivered to the Representatives); and no stop order suspending the
effectiveness of the Initial Registration Statement, and post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened, to the knowledge of the Guarantor or the Trust, by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) under the Act, is hereinafter called a "Preliminary Prospectus";
the various parts of the Initial Registration Statement and the 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective (but excluding Form T-1) or such
part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, each as amended at the time such part of
the Initial Registration Statement became effective, are hereinafter
collectively called the "Registration Statement"; the prospectus
relating to the Registered Securities in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on
or prior to the date of this Agreement is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under
the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the
Guarantor filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in relation to the
applicable Designated Securities in the form in which it is filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing).
(b) The documents incorporated by reference in the Prospectus as
amended or supplemented, when they became effective or were filed with
the Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and any further documents so
filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Trust or the Guarantor by an Underwriter of
Designated Securities through the Representatives expressly for use in
the Prospectus as amended or supplemented relating to such Securities.
(c) The Registration Statement, as of its effective date, and the
Prospectus, at the time it is filed with the Commission, conform and
will conform, as the case may be, and any further amendments or
supplements to the Registration Statement or the Prospectus will
conform, in all material respects with the applicable requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
thereunder; neither the Registration Statement, nor any amendment
thereto, as of the applicable effective date, contains an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and the Prospectus and any amendment or supplement thereto
at the time it is filed with the Commission, does not include and will
not include an untrue statement of a material fact and does not omit and
will not omit to state a material fact necessary to make the statements
therein in light of the circumstances under which they were made not
misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to the part of the Registration Statement that
constitutes the statement of eligibility on Form T-1 under the Trust
Indenture Act of the Property Trustee, the Delaware Trustee and the
Guarantor Trustee and any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Trust or
the Guarantor by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(d) Since the respective dates as of which information is given
in the Registration Statement and in the Prospectus as amended or
supplemented, there has been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor and its subsidiaries, taken as a whole, or
(ii) adverse development concerning the business or assets of the
Guarantor and its subsidiaries, taken as a whole, which would result in
a material adverse change in the prospective financial condition or
results of operations of the Guarantor and its subsidiaries, taken as a
whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended or supplemented
(including the financial statements and notes thereto included or
incorporated by reference therein).
(e) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act
of the State of Delaware (the "Delaware Business Trust Act") with the
power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented, and the Trust
has conducted and will conduct no business in the future that would be
inconsistent with the description of the Trust set forth in the
Prospectus as amended or supplemented; the Trust is not a party to or
bound by any agreement or instrument other than this Agreement, the
Trust Agreement (the "Trust Agreement") between the Guarantor and the
trustees named therein (the "Trustees"), the Trust Certificate (as
hereinafter defined) and the agreements and instruments contemplated by
the Trust Agreement; the Trust has no liabilities or obligations other
than those arising out of the transactions contemplated by this
Agreement and the Trust Agreement and described in the Prospectus; based
on current law, the Trust is not classified as an association taxable as
a corporation for United States federal income tax purposes; and the
Trust is not a party to or subject to any action, suit or proceeding of
any nature.
(f) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Oklahoma, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus as amended or
supplemented, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business so as to require such qualification except where
the failure to so qualify would not have a material adverse effect on
the financial condition of the Guarantor and its subsidiaries, taken as
a whole.
(g) The Guarantor has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Guarantor have been duly and validly authorized and issued and are fully
paid and non-assessable.
(h) The Guarantor has no significant subsidiaries, as
"significant subsidiary" is defined in Rule 405 of Regulation C of the
rules and regulations promulgated by the Commission under the Act.
(i) This Agreement has been duly authorized, executed and
delivered by each of the Guarantor and the Trust.
(j) The Securities have been duly and validly authorized by the
Trust in accordance with the Trust Agreement, and, when issued and
delivered pursuant to this Agreement and the Pricing Agreement with
respect to such Designated Securities, such Designated Securities, will
be duly and validly issued and fully paid and non-assessable undivided
beneficial interests in the assets of the Trust and be entitled to the
benefits of the Trust Agreement; the Securities conform in all material
respects to the description thereof contained in the Registration
Statement and the Designated Securities will conform in all material
respects to the description thereof contained in the Prospectus as
amended or supplemented; the issuance of the Securities is not subject
to preemptive or other similar rights; and the terms of the Securities
are valid and binding on the Trust; the Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General Corporation
Law of the State of Delaware.
(k) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending or,
to the knowledge of the Guarantor, threatened to which the Guarantor or
any of its subsidiaries is a party or to which any of the properties of
the Guarantor or any of its subsidiaries is subject, which are required
to be described in the Prospectus, as amended or supplemented; and there
are no contracts or other documents that are required to be described in
the Registration Statement or the Prospectus as amended or supplemented
or to be filed as exhibits to the Registration Statement that are not
described or filed as required.
(l) The Guarantor (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or other
approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would
not, singly or in the aggregate, have a material adverse effect on the
Guarantor and its subsidiaries, taken as a whole.
(m) The Common Securities have been duly and validly authorized
by the Trust in accordance with the Trust Agreement and upon issuance
and delivery by the Trust to the Guarantor against payment therefor as
described in the Prospectus, will be duly and validly issued and fully
paid and non-assessable undivided beneficial interests in the assets of
the Trust and be entitled to the benefits of the Trust Agreement; the
Common Securities conform in all material respects to the description
thereof contained in the Prospectus as amended or supplemented; the
issuance of the Common Securities is not subject to preemptive or other
similar rights; and at the Time of Delivery (as defined in Section 4
hereof), all of the issued and outstanding Common Securities of the
Trust will be directly owned by the Guarantor free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(n) The Guarantee Agreement has been duly and validly authorized
by the Guarantor and when executed and delivered by the Guarantor and by
the Guarantee Trustee will have been duly executed and delivered and
will constitute a valid and legally binding obligation of the Guarantor
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in
equity or at law); and the Guarantee Agreement has been qualified under
the Trust Indenture Act.
(o) The Subordinated Debentures have been duly and validly
authorized by the Guarantor and when executed, authenticated and
delivered in accordance with the Indenture will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Guarantor enforceable in accordance
with their terms, except as limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization and other similar laws relating to
or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law) and
the Subordinated Debentures are entitled to the benefits of the
Indenture.
(p) The Trust Agreement has been duly and validly authorized by
the Guarantor and when executed and delivered by the Guarantor and by
the Administrative Trustees will have been duly executed and delivered
and will constitute a valid and legally binding obligation of the
Guarantor enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in
equity or at law); and the Trust Agreement has been qualified under the
Trust Indenture Act.
(q) The Indenture has been duly and validly authorized by the
Guarantor and when executed and delivered by the Guarantor and the
Debenture Trustee will have been duly executed and delivered and will
constitute a valid and legally binding obligation of the Guarantor
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in
equity or at law); and the Indenture has been qualified under the Trust
Indenture Act.
(r) The Expense Agreement between the Guarantor and the Trust
(the "Expense Agreement") has been duly and validly authorized by the
Guarantor and when executed and delivered by the Guarantor and the
Trust, will have been duly executed and delivered and will constitute a
valid and legally binding obligation of the Guarantor enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization and other similar laws relating to
or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
(s) The Commission has entered an order (the "Order") under the
Public Utility Holding Company Act of 1935, as amended (the "1935 Act"),
permitting to become effective the Form U-1 Application-Declaration
filed by the Guarantor authorizing the creation of the Trust, the issue
and sale of the Securities by the Trust, the issuance and delivery of
the Common Securities by the Trust, the issuance and sale of the
Subordinated Debentures by the Guarantor and the execution, delivery and
performance of the Guarantee. A copy of such order heretofore entered by
the Commission has been or will be delivered to Merrill Lynch, Pierce,
Fenner & Smith Incorporated on behalf of the Representatives.
(t) The Corporation Commission of Oklahoma has entered an order
authorizing or approving, among other things, the issuance and sale of
the Securities by the Company. A copy of such order heretofore entered
by the Commission has been or will be delivered to Merrill Lynch,
Pierce, Fenner & Smith Incorporated on behalf of the Representatives.
(u) The issue and sale of the Securities and the Common
Securities by the Trust, the compliance by the Trust with all of the
provisions of this Agreement and any Pricing Agreement, the execution,
delivery and performance by the Trust of the Expense Agreement, the
purchase of the Subordinated Debentures by the Trust, and the
consummation of the transactions contemplated herein and therein will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture or other
material agreement or instrument to which the Trust is a party or by
which the Trust is bound or to which any of the property or assets of
the Trust is subject, nor will such action result in any violation of
the provisions of the Certificate of Trust of the Trust or the Trust
Agreement or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Trust or any
of its properties; and no consent, approval, authorization, order,
license, certificate, permit, registration or qualification of or with
any such court or governmental agency or body, other than the Order and
the order of the Corporation Commission of Oklahoma, which have been
duly obtained and are in full force and effect, is required, for the
issue and sale of the Securities and the Common Securities by the Trust,
the purchase of the Subordinated Debentures by the Trust or the
consummation by the Trust of the transactions contemplated by this
Agreement or any Pricing Agreement, except such as have been, or will
have been prior to the Time of Delivery (as defined in Section 4
hereof), obtained under the Act and the Exchange Act, of the Registered
Securities and the Securities, respectively, the qualification of the
Trust Agreement, the Indenture and the Guarantee under the Trust
Indenture Act, and such consents, approvals, authorizations, orders,
licenses, certificates, permits, registrations or qualifications as have
already been obtained, or as may be subsequently obtained in the
ordinary course of business, or as may be required under state
securities or Blue Sky laws in connection with the purchase of the
Securities and the distribution of the Securities by the Underwriters.
(v) The issuance by the Guarantor of the Guarantee, the
compliance by the Guarantor with all of the provisions of this Agreement
and any Pricing Agreement, the execution, delivery and performance by
the Guarantor of the Guarantee Agreement, the Subordinated Debentures,
the Trust Agreement, the Indenture and the Expense Agreement, and the
consummation of the transactions contemplated herein and therein will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture or other
material agreement or instrument to which the Guarantor or any of its
subsidiaries is a party or by which the Guarantor or any of its
subsidiaries is bound or to which any of the property or assets of the
Guarantor or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Restated Certificate of
Incorporation or by-laws of the Guarantor or the charter or by-laws of
any of its subsidiaries or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Guarantor or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, license, certificate, permit,
registration or qualification of or with any such court or other
governmental agency or body, other than the Order and the order of the
Corporation Commission of the State of Oklahoma, which have been duly
obtained and are in full force and effect, is required for the issue of
the Guarantee or the consummation by the Guarantor of the other
transactions contemplated by this Agreement or any Pricing Agreement,
except the registration under the Act of the Registered Securities, the
qualification of the Trust Agreement, the Indenture and the Guarantee
Agreement under the Trust Indenture Act and such consents, approvals,
authorizations, orders, licenses, certificates, permits, registrations
or qualifications as have already been obtained, or as may be
subsequently obtained in the ordinary course of business, or as may be
required under state securities or Blue Sky laws and in connection with
the purchase of the Securities and distribution of the Securities by the
Underwriters.
(w) Neither the Trust nor the Guarantor is in violation of its
organizational documents or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any indenture or other material agreement or instrument to which it
is a party or by which it or any of its properties may be bound.
(x) Neither the Trust nor the Guarantor is, and after giving
effect to the offering and sale of the Securities, neither the Trust nor
the Guarantor will be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(y) There are no contracts, agreements or understandings between
the Trust or the Guarantor and any person that grant such person the
right to require the Trust or the Guarantor to file a registration
statement under the Act with respect to any undivided beneficial
interests in the assets of the Trust or any capital stock of the
Guarantor owned or to be owned by such person or to require the Trust or
the Guarantor to include such securities in the securities registered
pursuant to the Registration Statement.
(z) Arthur Andersen LLP, who have certified certain financial
statements of the Guarantor and the Guarantor's subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities, the several Underwriters propose to offer the Designated
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
4. Certificates for the Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto, in the form
specified in such Pricing Agreement, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Trust, shall be delivered by or on behalf
of the Trust to the Representatives for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor in
immediately available funds by wire transfer to an account designated in writing
by the Trust as specified in such Pricing Agreement, all in the manner and at
the place and time and date as the Representatives and the Trust may agree upon
in writing, such time and date being herein called the "Time of Delivery".
5. Each of the Trust and the Guarantor, jointly and severally,
agrees with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities, or, if
applicable, such time as may be required by Rule 424(b) under the Act;
to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of the
Pricing Agreement relating to such Securities and prior to any Time of
Delivery for such Securities which shall be disapproved in writing by
the Representatives for such Securities promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment or
supplement after any Time of Delivery for such Securities and furnish
the Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed
by the Trust or the Guarantor with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of such Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Securities, of the suspension
of the qualification of the Registered Securities for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or
for additional information; and, in the event of the issuance of any
such stop order or of any such order preventing or suspending the use of
any prospectus relating to the Securities or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal
of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of such
Securities, provided that in connection therewith neither the Trust nor
the Guarantor shall be required to qualify as a foreign corporation or
trust or to qualify as a dealer in Securities or to file any general
consents to service of process in any jurisdiction;
(c) To use its best efforts to furnish, prior to 12:00 noon, New
York City time, on the New York Business Day next succeeding the date of
the applicable Pricing Agreement and from time to time during the period
when a prospectus is required to be delivered under the Act by any
Underwriter or dealer, the Underwriters with copies of the Prospectus as
amended or supplemented in New York City in such quantities as the
Representatives may reasonably request, and if, in the reasonable
opinion of counsel to the Guarantor, the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Securities and if at such time any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would in the
reasonable opinion of counsel for the Guarantor include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply in the reasonable opinion of counsel
for the Guarantor with the Act or the Exchange Act, to notify the
Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer
in securities as many copies as the Representatives may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus, if any, which will correct such statement or omission or
effect such compliance;
(d) To make generally available to its security holders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Guarantor and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Guarantor, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the earlier of (i) the date, after the Time of Delivery, on which the
distribution of the Securities ceases, as determined by the
Representatives on behalf of the Underwriters, and (ii) 30 days after
the Time of Delivery for such Designated Securities, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder,
any securities of the Trust, any other beneficial interests of the
Trust, or any preferred securities or any other securities of the Trust
or the Guarantor, as the case may be, that are substantially similar to
the Designated Securities, including the Guarantee, and including but
not limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive securities, preferred
securities or any such substantially similar securities of either the
Trust or the Guarantor, without the prior consent of the
Representatives;
(f) To issue the Guarantee concurrently with the issue and sale
of the Securities as contemplated herein;
(g) To use its best efforts to list, subject to notice of
issuance, the Securities on the New York Stock Exchange; and
(h) If the Trust and the Guarantor elect to rely upon Rule
462(b), to file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) by 10:00 p.m. Washington, D.C. time, on
the date of the applicable Pricing Agreement, and at the time of filing
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
6. The Guarantor covenants and agrees with the several Underwriters that
it will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Trust's and the Guarantor's counsel and accountants in
connection with the registration of the Registered Securities under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers, excluding the fees and disbursements of
counsel for the Underwriters, except as set forth in clause (iii) below and
Section 11 hereof; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, any Pricing Agreement, the Indenture, the
Guarantee, any Blue Sky Memorandum and any other documents in connection with
the offering, purchase, sale and delivery of the Registered Securities; (iii)
all expenses in connection with the qualification of the Registered Securities
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky surveys,
not exceeding however $6,000 in the aggregate; (iv) any fees charged by
securities rating services for rating the Securities; (v) the cost and charges
of the transfer agent or registrar; (vi) the cost of qualifying the Securities
with The Depository Trust Company; (vii) all reasonable fees and expenses of the
Trustees, the Debenture Trustee, the Guarantee Trustee and their counsel; (viii)
all fees and expenses in connection with the listing of the Securities on the
New York Stock Exchange and the cost of registering the Securities under Section
12 of the Exchange Act; and (ix) the cost of preparing certificates for the
Securities and the Subordinated Debentures. It is understood, however, that,
except as provided in this Section and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Trust and the
Guarantor in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the Trust and the
Guarantor shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Securities shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; if the Trust and the Guarantor have elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 p.m. Washington, D.C. time, on the date of the
applicable Pricing Agreement; no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Guarantor or the Representatives, threatened by the
Commission;
(b) Sidley & Austin, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions (a draft of
each such opinion is attached as Annex II(a) hereto), dated each Time of
Delivery for such Designated Securities, with respect to: the
incorporation of the Guarantor; insofar as the federal laws of the
United States or the General Corporation Law of the State of Delaware is
concerned, the validity of the Registered Securities and the
Subordinated Debentures; the Registration Statement and the Prospectus;
and other related matters as the Representatives may reasonably request;
and such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) Richards, Layton & Finger, P.A., special Delaware counsel for
the Guarantor and the Trust, shall have furnished to the Representatives
their written opinion (a draft of such opinion is attached as Annex
II(b) hereto), dated each Time of Delivery for such Designated
Securities, in form and substance satisfactory to the Representatives,
to the effect set forth in such Annex;
(d) Milbank, Tweed, Hadley & McCloy, counsel for the Trust and
the Guarantor, shall have furnished to the Representatives their written
opinion (a draft of such opinion is attached as Annex II(c) hereto),
dated each Time of Delivery for such Designated Securities, in form and
substance satisfactory to the Representatives, to the effect set forth
in such Annex;
(e) Christy & Viener, special tax counsel for the Guarantor and
the Trust, shall have furnished to the Representatives their written
opinion (a draft of such opinion is attached as Annex II(d) hereto),
dated each Time of Delivery for such Designated Securities, in form and
substance satisfactory to the Representatives, to the effect set forth
in such Annex;
(f) Doerner, Saunders, Daniel & Anderson, special Oklahoma
counsel for the Guarantor and the Trust, shall have furnished to the
Representatives their written opinion (a draft of such opinion is
attached as Annex II(e) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(g) [ ], special Texas counsel for the Guarantor and the Trust,
shall have furnished to the Representatives their written opinion (a
draft of such opinion is attached as Annex II(f) hereto), dated each
Time of Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect set forth in such
Annex;
(h) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to the Designated Securities and at each Time of Delivery
for such Designated Securities, Arthur Andersen LLP shall have furnished
to the Representatives a letter, dated the effective date of the
Registration Statement or the date of the most recent report filed with
the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex III hereto, and
with respect to such letter dated such Time of Delivery, as to such
other matters as the Representatives may reasonably request and in form
and substance satisfactory to the Representatives; (a draft of the form
of letter to be delivered at a time prior to the execution of the
Pricing Agreement, on the effective date of any post-effective amendment
to the Registration Statement and as of each Time of Delivery may be
attached as Annex III hereto);
Subsequent to the respective dates as of which information is
given in each of the Registration Statement and the Prospectus, there
shall not have been any change or decrease specified in the letters
required by subsection (g) of this Section 7 which is, in the judgment
of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the
delivery of the Designated Securities as contemplated by the
Registration Statement and the Prospectus;
(i) The Trust Agreement, the Guarantee and the Indenture shall
have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives;
(j) Since the respective dates as of which information is given
in each of the Registration Statement and in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated
Securities there shall have been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor and its subsidiaries, taken as a whole, or
(ii) any adverse development concerning the business or assets of the
Guarantor and its subsidiaries, taken as a whole, which would result in
a material adverse change in the prospective financial condition or
results of operations of the Guarantor and its subsidiaries, taken as a
whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended prior to the date of
the Pricing Agreement relating to the Designated Securities (including
the financial statements and notes thereto included or incorporated by
reference in the Registration Statement);
(k) On or after the date of the Pricing Agreement relating to the
Designated Securities no downgrading shall have occurred in the rating
accorded the Securities or the Guarantor's debt securities or preferred
stock by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2)
under the Act;
(l) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Guarantor's or the Trust's
securities on the New York Stock Exchange; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York
State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
war, if the effect of any such event specified in this Clause (iv) in
the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(m) The Securities at each Time of Delivery shall have been
approved for listing, subject to notice of issuance, on the New York
Stock Exchange; and
(n) The Trust and the Guarantor shall have furnished or caused to
be furnished to the Representatives at each Time of Delivery for
Designated Securities certificates of officers or Administrative
Trustees of the Trust (as defined in the Trust Agreement), as
applicable, of the Guarantor and the Trust, satisfactory to the
Representatives, as to the accuracy of the representations and
warranties of the Trust and the Guarantor herein at and as of such Time
of Delivery, as to the performance by the Trust and the Guarantor of all
of their obligations hereunder to be performed at or prior to such Time
of Delivery, as to the matters set forth in subsections (a) and (j) of
this Section and as to such other matters as the Representatives may
reasonably request.
8. (a) The Trust and the Guarantor, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Securities Act, the Exchange Act
or the common law or otherwise, and to reimburse each such Underwriter or such
controlling person for any reasonable legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) incurred by it or them in
connection with defending against any such losses, claims, damages or
liabilities, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Guarantor shall have furnished any amendments or supplements
thereto) or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the indemnity agreement contained in this
subsection (a) shall not apply to any such losses, claims, damages or
liabilities arising out of or based upon (i) any such untrue statement or
alleged untrue statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Trust or the Guarantor by any of the
Underwriters for use in the Registration Statement or the Prospectus or any
amendment or supplement to either thereof or (ii) the failure of any Underwriter
to deliver (either directly or through the Representatives) a copy of the
Prospectus (excluding the documents incorporated therein by reference), or of
the Prospectus as amended or supplemented after it shall have been amended or
supplemented by the Guarantor (excluding the documents incorporated therein by
reference), to any person to whom a copy of any preliminary prospectus shall
have been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have been sold by such Underwriter, as such delivery
may be required by the Securities Act and the rules and regulations of the
Commission thereunder.
(b) Each of the Underwriters, severally and not jointly, agrees to
indemnify and hold harmless the Trust and the Guarantor, each of their officers
who signs the Registration Statement, each of their directors, each person who
controls the Trust or the Guarantor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each other Underwriter and
each person, if any, who so controls such other Underwriter, from and against
any and all losses, claims, damages or liabilities, joint or several, to which
any one or more of them may become subject under the Securities Act, the
Exchange Act or the common law or otherwise, and to reimburse each of them for
any reasonable legal or other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by them in connection with defending
against any such losses, claims, damages or liabilities of the character above
specified arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus or any amendment to the Registration Statement or amendment or
supplement to the Prospectus or upon any omission or alleged omission to state
in any thereof a material fact required to be stated therein or necessary to
make the statements therein not misleading if such statement or omission was
made in reliance upon and in conformity with information furnished in writing to
the Trust or the Guarantor by such Underwriter for use in the Registration
Statement or the Prospectus or any amendment or supplement to either thereof or
(ii) the failure of such Underwriter, due to the negligence of such Underwriter,
to deliver (either directly or through the Representatives) a copy of the
Prospectus (excluding the documents incorporated therein by reference), or of
the Prospectus as amended or supplemented after it shall have been amended or
supplemented by the Guarantor (excluding the documents incorporated therein by
reference), to any person to whom a copy of any preliminary prospectus shall
have been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have sold by such Underwriter, as such delivery may
be required by the Securities Act and the rules and regulations of the
Commission thereunder.
(c) Promptly after receipt by a party indemnified under this Section 8
(an "indemnified party") of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against a
party granting an indemnity under this Section 8 (the "indemnifying party"),
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof (thereby conceding that the action in question is subject to
indemnification by the indemnifying party), with counsel reasonably satisfactory
to such indemnified party, and shall pay the fees and disbursements of such
counsel related to such action; provided, however, that if the defendants in any
such action include both the indemnified party and the indemnifying party and
representation of both parties would be inappropriate due to actual or potential
differing interests between them, the indemnified party or parties shall have
the right to select separate counsel. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel), approved by the
Representatives in the case of subsection (a), representing the indemnified
parties under subsection (a) who are parties to such action and that all such
fees and expenses shall be reimbursed as they are incurred) or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that such liability
shall be only in respect of the counsel referred to in clause (i) or (ii). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section 8 shall be
unenforceable under applicable law by an indemnified party, the Trust and the
Guarantor, jointly and severally, agree to contribute to such indemnified party
with respect to any and all losses, claims, damages and liabilities for which
such indemnification provided for in this Section 8 shall be unenforceable, in
such proportion as shall be appropriate to reflect the relative fault of the
Trust and the Guarantor on the one hand and the indemnified party on the other
hand in connection with the statements or omissions which have resulted in such
losses, claims, damages and liabilities, as well as any other relevant equitable
considerations; provided, however, that no indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from the Trust or the
Guarantor if the Trust or the Guarantor, respectively, is not guilty of such
fraudulent misrepresentation. Relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust or the Guarantor or the indemnified
party and each such party's relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Trust, the Guarantor and each of the Underwriters agree that it would not be
just and equitable if contribution pursuant to this subparagraph were to be
determined solely by PRO RATA allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
(e) The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
(f) The indemnity and contribution agreements contained in this Section
8 and the representations and warranties of the Trust and the Guarantor in the
Underwriting Agreement shall remain operative and in full force regardless of
(i) any termination of the Underwriting Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Trust or the Guarantor, their directors or officers or
any person controlling the Trust or the Guarantor and (iii) acceptance of and
payment for any of the Designated Securities.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
twenty-four hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Trust and
the Guarantor shall be entitled to a further period of twenty-four hours within
which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
the Trust and the Guarantor that they have so arranged for the purchase of such
Designated Securities, or the Trust or the Guarantor notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Trust and the Guarantor shall have the
right to postpone a Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Trust and the Guarantor agree to file
promptly any amendments or supplements to the Registration Statement or the
Prospectus which may be required in the opinion of counsel for the Guarantor.
The term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and the Guarantor as provided in subsection (a)
above, the aggregate number of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate number of the
Designated Securities to be purchased at the respective Time of Delivery, then
the Trust and the Guarantor shall have the right to require each non-defaulting
Underwriter to purchase the number of Designated Securities which such
Underwriter agreed to purchase under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Designated
Securities which such Underwriter agreed to purchase under such Pricing
Agreement) of the Designated Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Trust and the Guarantor as provided in subsection (a)
above, the aggregate number of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate number of Designated Securities to be
purchased at the respective Time of Delivery, as referred to in subsection (b)
above, or if the Trust and the Guarantor shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter, the
Trust or the Guarantor, except for the expenses to be borne by the Guarantor and
the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, the Guarantor and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Trust, the Guarantor or any officer, trustee or director or controlling person
of the Trust or the Guarantor, and shall survive delivery of and payment for the
Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, neither the Trust nor the Guarantor shall then be under any liability to
any Underwriter with respect to the Designated Securities with respect to which
such Pricing Agreement shall have been terminated except as provided in Sections
6 and 8 hereof; but, if any Pricing Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part of
the Trust or the Guarantor to comply with the terms or to fulfill any of the
conditions of the Pricing Agreement (excluding those conditions set forth in
Section 7(j) hereof), or if for any reason the Trust or the Guarantor shall be
unable to perform its obligations under the Pricing Agreement, the Trust and the
Guarantor will reimburse the Underwriters or such Underwriters who have so
terminated the Pricing Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of Underwriters'
counsel) reasonably incurred by such Underwriters in connection with the Pricing
Agreement or the offering contemplated thereunder. Neither the Trust nor the
Guarantor shall in any event be liable to any of the Underwriters for damages on
account of loss of anticipated profits.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Trust or the Guarantor shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Trust or the
Guarantor, respectively, set forth in the Registration Statement, Attention:
Secretary; provided, however that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Trust and the Guarantor by the Representatives upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Trust, the Guarantor and,
to the extent provided in Sections 8 and 10 hereof, the officers, trustees and
directors of the Guarantor and the Trust and each person who controls the Trust,
the Guarantor or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any such Pricing
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us __________ counterparts hereof.
Very truly yours,
Public Service Company of Oklahoma
By:
Name:
Title:
PSO Capital I
By: Public Service Company of
Oklahoma, as Depositor
By:
Name:
Title:
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
[Names of Co-Representatives]
By:
(Merrill Lynch, Pierce, Fenner
& Smith Incorporated)
On behalf of each of the Underwriters
ANNEX I
PRICING AGREEMENT
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
[Names of Co-Representative(s),]
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Merrill Lynch & Co.,
World Financial Center - North Tower
New York, New York 10281
Ladies and Gentlemen:
PSO Capital I, a statutory business trust formed under the laws of the
State of Delaware (the "Trust") and Public Service Company of Oklahoma, an
Oklahoma corporation (the "Guarantor"), each proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated ________, 1997
(the "Underwriting Agreement"), among the Trust and the Guarantor on the one
hand and Merrill Lynch, Pierce Fenner & Smith Incorporated, Merrill Lynch & Co.
[and (names of Co-Representatives named therein)] on the other hand, to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedule II hereto (the "Designated Securities"). Each
of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust, at the time and place and
at the purchase price to the Underwriters set forth in Schedule II hereto, the
number of Designated Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us _________ counterparts hereof, and upon acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Trust and the Guarantor. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Trust and the Guarantor for
examination but without warranty on the part of the Representatives as to the
authority of the signers thereof.
Very truly yours,
PSO Capital I
By:
Name:
Title:
Public Service Company of Oklahoma
By:
Name:
Title:
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
[Name(s) of Co-Representative(s)]
By:
(Merrill Lynch, Pierce, Fenner
& Smith Incorporated)
On behalf of each of the Underwriters
SCHEDULE I
UNDERWRITER Number of
Designated Securities
TO BE PURCHASED
Merrill Lynch, Pierce, Fenner & Smith Incorporated
[Name(s) of Co-Representative(s)]
[Names of other Underwriters]
Total
SCHEDULE II
Title of Designated Securities:
Number of Designated Securities:
Initial Offering Price to Public:
[$___ per Preferred Security] [formula]
Purchase Price by Underwriters:
[$____ per Preferred Security][Formula]
[Commission Payable to Underwriters:
$_________ per Preferred Security in Federal (same day) Funds [by wire
transfer]]
Form of Designated Shares:
[Definitive form, to be made available for checking [and packaging] at least
twenty-four hours prior to the Time of Delivery at the office of [The Depository
Trust Company or its designated custodian] [the Representatives]]
[Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian for
trading in the Same Day Funds Settlement System of DTC, and to be made available
for checking by the Representatives at least twenty-four hours prior to the Time
of Delivery at the office of DTC.]
Specified Funds for Payment of Purchase Price:
[Federal (same day) Funds [by wire transfer]]
[Describe any blackout provisions with respect to the Designated Securities]
Time of Delivery:
____ a.m. (New York City time), _________, 19___
Closing Location:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Names and addresses of Representatives:
Designated Representatives
Address for Notices, etc.:
[Other Terms]*:
- --------------------------
* A description of particular tax, accounting or other unusual features
(including any event risk provisions) of the Designated Securities should be set
forth, or referenced to an attached or accompanying description, if necessary,
to ensure agreement as to the terms of the Designated Securities to be purchased
and sold. Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.
ANNEX II(a)
Form of Opinion of Sidley & Austin
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
[Names of Co-Representatives]
as Representatives of the Several Underwriters
c/o Merrill Lynch & Co.
World Financial Center - North Tower
New York, New York 10281
Re: PSO Capital I % Trust Originated Preferred Securities,
Series
Dear Ladies and Gentlemen:
We address this opinion to you individually and as
Representatives of the Underwriters (the "Underwriters") named in Schedule I to
the Pricing Agreement dated _________, 1997 (the "Pricing Agreement") among you,
as such Representatives, Public Service Company of Oklahoma, an Oklahoma
corporation (the "Guarantor"), and PSO Capital I, a statutory business trust
organized under the Business Trust Act of the State of Delaware (the "Trust"
and, together with the Guarantor, the "Offerors"), with respect to the issuance
and sale pursuant thereto and to the Underwriting Agreement dated _________,
1997 (together with the Pricing Agreement, the "Underwriting Agreement"), among
you, as such Representatives, and the Offerors of $___________ in aggregate
liquidation amount of the ____% Trust Originated Preferred Securities, Series
[__] ($25 liquidation preference per security), of the Trust (the "Securities").
The Securities are being issued under the Amended and Restated Trust Agreement
dated as of ________, 1997 (the "Trust Agreement") among the Guarantor, The Bank
of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, and the Administrative Trustees named therein. Capitalized terms not
defined herein have the meanings specified in the Underwriting Agreement.
As counsel for the Underwriters, we have, among other things,
participated with officers and representatives of the Guarantor, including its
counsel and independent public accountants, and representatives of the
Underwriters in the preparation of the Offerors' Registration Statement on Form
S-3 (Registration No. 333-________), filed on ________, 1997 with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), which registration statement became effective on
__________, 1997. Such registration statement at the time it became effective
(including all documents incorporated by reference therein pursuant to Item 12
of Form S-3 at the date hereof (the "Incorporated Documents")), is hereinafter
called the "Registration Statement." The Offerors' Prospectus Supplement dated
__________, 1997, which was filed with the Commission on ________, 1997,
together with the Prospectus dated _________, 1997 (including the Incorporated
Documents) included in the Registration Statement, are hereinafter collectively
called the "Prospectus."
Pursuant to Section 7(b) of the Underwriting Agreement, this will
advise you that in the opinion of the undersigned, as counsel for the
Underwriters:
1. The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Oklahoma.
2. Each of the Underwriting Agreement and the Pricing Agreement
has been duly authorized, executed and delivered by the Guarantor and by the
Guarantor as Depositor on behalf of the Trust;
3. The Indenture and the [First] Supplemental Indenture dated as
of ________, 1997 and as of _________, 1997, respectively (collectively the
"Indenture"), between the Guarantor and The Bank of New York, as trustee (the
"Indenture Trustee"), under which $________ aggregate principal amount of the
Guarantor's __% Junior Subordinated Deferrable Interest Debentures, Series ___
(the "Subordinated Debentures") are being issued on the date hereof, have been
duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
4. The Indenture has been duly authorized, executed and delivered
by the Guarantor and, assuming the Indenture has been duly authorized, executed
and delivered by the Indenture Trustee, constitutes the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms; and the Indenture conforms in all material respects to the
description thereof contained in the Prospectus;
5. The Guarantee Agreement dated as of ______, 1997 (the
"Guarantee") between the Guarantor and The Bank of New York, as trustee (the
"Guarantee Trustee"), has been duly qualified under the Trust Indenture Act.
6. The Guarantee has been duly authorized, executed and delivered
by the Guarantor and, assuming the Guarantee has been duly authorized, executed
and delivered by the Guarantee Trustee, constitutes the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms; and the Guarantee conforms in all material respects to the
description thereof contained in the Prospectus.
7. The Subordinated Debentures have been duly authorized,
executed and delivered by the Guarantor and, when authenticated, issued and
delivered as specified in or pursuant to the Indenture against payment of the
agreed consideration therefor as provided in __________, will constitute valid
and legally binding obligations of the Guarantor enforceable against the
Guarantor in accordance with their respective terms and will be entitled to the
benefits provided by the Indenture; and the Subordinated Debentures conform in
all material respects to the description thereof contained in the Prospectus.
8. The Securities conform in all material respects to the
description thereof contained in the Prospectus and are entitled to the benefits
provided by the Trust Agreement.
9. The statements contained in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the Guarantees,"
"Description of the Debentures," "Certain Terms of the Series __ Preferred
Securities," "Certain Terms of the Series __ Guarantee," "Certain Terms of the
Series __ Debentures" and "Relationship Among the Preferred Securities, the
Debentures and the Guarantees," insofar as such statements purport to constitute
a summary of the terms of the securities therein described, fairly summarize the
terms of such securities.
10. The statements set forth in the Prospectus under the captions
"Underwriting" and "Plan of Distribution," insofar as they purport to describe
the provisions of the laws or documents referred to therein, fairly summarize
the terms of such provisions.
11. The Registration Statement has become effective under the
Act; and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose are
pending or threatened under the Act.
12. The Registration Statement, as of its effective date, and the
Prospectus, as of its issue date and the date hereof (except, in each case, for
the financial statements, financial data, statistical data and supporting
schedules included therein, as to which we express any opinion), complied and
complies as to form in all material respects with the Act and the rules and
regulations of the Commission promulgated thereunder.
13. The Trust is not an "investment company" or an entity
"controlled" by an "investment company" required to be registered under the 1940
Act.
14. The order of the Commission dated ________, 1997, in File No.
________, issued under the Public Utility Holding Company Act of 1935, as
amended, relating, among other things, to the creation of the Trust, the
issuance and sale of the Securities by the Trust, the issuance and sale of the
Subordinated Debentures by the Guarantor and the execution, delivery and
performance of the Guarantee (being the order of the Commission referred to in
subsection (s) of Section 2 of the Underwriting Agreement) and the order of the
Corporation Commission of Oklahoma (being the order of the Corporation
Commission of Oklahoma referred to in subsection (t) of Section 2 of the
Underwriting Agreement) have been entered and, to our knowledge, are still in
full force and effect. Except for the effectiveness of the Registration
Statement, no other approval, authorization, consent, certificate or order of
any commission or regulatory authority of the United States of America is
necessary with respect to the issuance and sale of the Registered Securities by
the Offerors as contemplated by the Underwriting Agreement and the Prospectus.
In the course of the preparation of the Registration Statement
and the Prospectus, we have considered the information set forth therein in
light of the matters required to be set forth therein, and, as noted above, we
have participated in conferences with officers and representatives of the
Guarantor, including its counsel and independent public accountants, and your
representatives, during the course of which the contents of the Registration
Statement and the Prospectus and related matters were discussed. We have not
independently checked the accuracy or completeness of, or otherwise verified,
and, accordingly, are not passing upon, and do not assume responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus; and we have relied as to materiality,
to a large extent, upon the judgment of officers and representatives of the
Guarantor. However, as a result of such consideration and participation, nothing
has come to our attention which causes us to believe that the Registration
Statement (other than the financial statements, financial data, statistical data
and supporting schedules included therein, as to which we express no belief), at
the time it became effective, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus (other than
the financial statements, financial data, statistical data and supporting
schedules included therein , as to which we express no belief), at the time the
Registration Statement became effective and at the date hereof, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
For the purpose of rendering the foregoing opinions and
statements, we have relied, as to various questions of fact material to such
opinions and statements, upon the representations made in the Underwriting
Agreement and the Pricing Agreement and upon certificates of officers of the
Guarantor. We also have examined originals, or copies of originals certified to
our satisfaction, of such agreements, documents, certificates and other
statements of government officials and other instruments, have examined such
questions of law and have satisfied ourselves as to such matters of fact as we
have considered relevant and necessary as a basis for such opinions. We have
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the legal capacity of all natural persons and the
conformity with the original documents of any copies thereof submitted to us for
our examination.
Except as otherwise stated in the third sentence of this
paragraph, this opinion is limited to the laws of the State of New York and the
federal laws of the United States of America. We have examined copies of the
Guarantor's Certificate of Incorporation, as amended to date, and its currently
effective By-laws and certificates issued by the Secretary of State of the State
of Oklahoma on ___________, 1997. Notwithstanding such examination, we have
relied, with your consent, as to the incorporation of the Guarantor and as to
all other matters covered by this letter on the opinion dated and delivered to
you this date of Doerner, Saunders, Daniel & Anderson, subject to the
exceptions, qualifications and limitations therein expressed.
Any opinion or statement herein which is expressed to be "to our
knowledge" or is otherwise qualified by words of like import means that the
lawyers in this firm who have had an involvement in the preparation of the
Registration Statement and the Prospectus and the transactions contemplated by
the Underwriting Agreement have no current conscious awareness of any facts or
information contrary to such opinion or statement.
The opinions expressed in paragraphs 4, 6 and 7 with respect to
the enforceability of the documents therein referenced are subject to the
qualification that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws affecting
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
This letter is being delivered solely for the benefit of the
persons to whom it is addressed; accordingly, it may not be quoted, filed with
any governmental authority or other regulatory agency or otherwise circulated or
utilized for any other purpose without our prior written consent. We assume no
obligation to update this opinion after the date hereof.
Very truly yours,
Annex II(b)
Form of Opinion of Richards, Layton & Finger
______________, 1997
Merrill Lynch & Co.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Smith Barney Inc.
c/o _______________
- ------------------
New York, New York _____
Re: PSO CAPITAL I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Public Service
Company of Oklahoma, an Oklahoma corporation (the "Company"), and PSO Capital I,
a Delaware business trust (the "Trust"), in connection with the matters set
forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of January
29, 1997 (the "Certificate"), as filed in the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on January 29, 1997;
(B) THE TRUST AGREEMENT OF THE TRUST, DATED AS OF JANUARY 29,
1997, BETWEEN THE COMPANY AND THE TRUSTEES OF THE TRUST NAMED THEREIN
(COLLECTIVELY, THE "TRUSTEES"), AS AMENDED AND RESTATED PURSUANT TO AN AMENDED
AND RESTATED TRUST AGREEMENT OF THE TRUST, DATED AS OF JANUARY __, 1997, AMONG
Merrill Lynch & Co.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Smith Barney Inc.
February 5, 1997
Page 2
THE COMPANY, THE TRUSTEES AND THE HOLDERS, FROM TIME TO TIME, OF THE UNDIVIDED
BENEFICIAL INTERESTS IN THE ASSETS OF THE TRUST (INCLUDING THE EXHIBITS C AND E
THERETO) (COLLECTIVELY, THE "TRUST AGREEMENT");
(C) THE UNDERWRITING AGREEMENT, DATED AS OF JANUARY __, 1997
TOGETHER WITH THE PRICING AGREEMENT, DATED AS OF JANUARY __, 1997 (COLLECTIVELY,
THE "UNDERWRITING AGREEMENT"), AMONG THE TRUST, THE COMPANY AND THE UNDERWRITERS
NAMED THEREIN;
(D) THE PROSPECTUS, DATED JANUARY __, 1997, as
supplemented by the Prospectus Supplement, dated January __, 1997 (collectively,
the "Prospectus"), relating to the ____% Trust Originated Preferred Securities,
Series A, of the Trust representing preferred undivided beneficial interests in
the assets of the Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities"); AND
(E) A CERTIFICATE OF GOOD STANDING FOR THE TRUST, DATED JANUARY
__, 1997, OBTAINED FROM THE SECRETARY OF STATE.
Capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (e) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (e) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent with
the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation, and termination of the Trust, and that the Trust Agreement and the
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February 5, 1997
Page 3
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation, due formation or
due organization, as the case may be, and valid existence in good standing of
each party to the documents examined by us under the laws of the jurisdiction
governing its creation, formation or organization, (iii) the legal capacity of
each signatory to the documents examined by us, (iv) except to the extent set
forth in paragraph 4 below, that each of the parties to the documents examined
by us has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (v) except to the extent provided in
paragraph 5 below, that each of the parties to the documents examined by us has
duly authorized, executed and delivered such documents, (VI) THE RECEIPT BY EACH
PERSON TO WHOM A PREFERRED SECURITY IS TO BE ISSUED BY THE TRUST (COLLECTIVELY,
THE "PREFERRED SECURITY HOLDERS") OF A PREFERRED SECURITIES CERTIFICATE AND THE
PAYMENT FOR THE PREFERRED SECURITY ACQUIRED BY IT, IN ACCORDANCE WITH THE TRUST
AGREEMENT AND THE PROSPECTUS, (VII) THAT THE PREFERRED SECURITIES ARE ISSUED AND
SOLD TO THE PREFERRED SECURITY HOLDERS IN ACCORDANCE WITH THE TRUST AGREEMENT
AND THE PROSPECTUS, (viii) the receipt by the Person (the "Common Security
Holder") to whom a Common Security of the Trust representing common undivided
beneficial interests in the assets of the Trust (each, a "Common Security" and
collectively, the "Common Securities") (the Preferred Securities and the Common
Securities being hereinafter collectively referred to as "Trust Securities") is
to be issued by the Trust of a Common Securities Certificate for the Common
Security and the payment for the Common Security acquired by it, in accordance
with the Trust Agreement, and as described in the Prospectus, (ix) that the
Common Securities are issued and sold to the Common Security Holder in
accordance with the Trust Agreement, and as described in the Prospectus, (x)
that the Trust derives no income from or connected with sources within the State
of Delaware and has no assets, activities (other than having a Delaware trustee
as required by the Delaware Business Trust Act and filing documents with the
Secretary of State) or employees in the State of Delaware, and (xi) that the
Trust is treated as a grantor trust for federal income tax purposes. WE HAVE NOT
PARTICIPATED IN THE PREPARATION OF THE PROSPECTUS AND ASSUME NO RESPONSIBILITY
FOR ITS CONTENTS
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
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necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions as set forth herein, we are of the opinion that:
2. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been made.
3. Under the Trust Agreement and the Delaware Business
Trust Act, the Trust has the trust power and authority to own its properties and
conduct its business, all as described in the Prospectus.
4. The Trust Agreement constitutes a legal, valid and binding
obligation of the Company and the Trustees, and is enforceable against the
Company and the Trustees, in accordance with its terms.
5. Under the Trust Agreement and the Delaware Business
Trust Act, the Trust has the power and authority to (A) execute and deliver, and
to perform its obligations under, the Underwriting Agreement, and (B) issue and
perform its obligations under the Trust Securities.
6. Under the Trust Agreement and the Delaware Business Trust
Act, the execution and delivery by the Trust of the Underwriting Agreement, and
the performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary trust action on the part of the Trust.
7. The Preferred Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and nonassessable undivided
beneficial interests in the assets of the Trust and are entitled to the benefits
of the Trust Agreement (subject to the terms of the Trust Agreement). The
Preferred Security Holders, as beneficial owners of the Trust, will be entitled
to the same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. We note that the Preferred Security Holders may be obligated,
pursuant to the Trust Agreement, (A) to provide indemnity and/or security in
connection with and pay taxes or governmental charges arising from transfers or
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exchanges of Preferred Securities Certificates and the issuance of replacement
Preferred Securities Certificates, and (B) to provide security or indemnity in
connection with requests of or directions to the Property Trustee to exercise
its rights and powers under the Trust Agreement.
8. The Common Securities have been duly authorized by the
Trust Agreement and are duly and validly issued undivided beneficial interests
in the assets of the Trust.
9. Under the Trust Agreement and the Delaware Business
Trust Act, the issuance of the Trust Securities is not subject to preemptive
rights.
10. The issuance and sale of the Trust Securities by the Trust,
the execution and delivery by the Trust of the Underwriting Agreement, the
consummation by the Trust of the transactions contemplated by the Underwriting
Agreement and compliance by the Trust with its obligations under the
Underwriting Agreement do not violate (A) any of the provisions of the
Certificate or the Trust Agreement or (B) any applicable Delaware law or
Delaware administrative regulation.
11. No authorization, approval, consent or order of any
Delaware court or any Delaware governmental authority or Delaware agency is
required to be obtained by the Trust solely in connection with the issuance and
sale of the Trust Securities.
12. The Preferred Security Holders (other than those Preferred
Security Holders who reside or are domiciled in the State of Delaware) will have
no liability for income taxes imposed by the State of Delaware solely as a
result of their participation in the Trust, and the Trust will not be liable for
any income tax imposed by the State of Delaware.
The opinions expressed in paragraphs 3 and 6 above are subject,
as to enforcement, to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or affecting the
rights and remedies of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions relating to
indemnification or contribution.
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Smith Barney Inc.
February 5, 1997
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We consent to your relying as to matters of Delaware law upon
this opinion in connection with the Purchase Agreement. We also consent to
Milbank, Tweed, Hadley & McCloy and Sidley & Austin's relying as to matters of
Delaware law upon this opinion in connection with opinions to be rendered by
them on the date hereof pursuant to the Underwriting Agreement. Except as stated
above, without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
CDK/JLJ
Annex II(c)
Form of Opinion of Milbank, Tweed, Hadley & McCloy
[-----------], [----]
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
[-------------------]
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center - North Tower
New York, New York 10281-1327
Re: PSO Capital I
[ ][ ]% Trust Originated Preferred
Securities, Series A
Ladies and Gentlemen:
We have acted as special counsel to Public Service Company of
Oklahoma, an Oklahoma corporation (the "Company"), and PSO Capital I, a
statutory business trust formed under the laws of the State of Delaware ("PSO
Capital"), in connection with the purchase by you, severally, from PSO Capital,
pursuant to the Underwriting Agreement and related Pricing Agreement, each dated
[__________], [____] (together, the "Underwriting Agreement"), among you, PSO
Capital and the Company, of [_________] [____]% Trust Originated Preferred
Securities, Series A ("Preferred Securities"). The Preferred Securities will be
issued pursuant to the Amended and Restated Trust Agreement of PSO Capital,
dated as of [__________], [____] (the "Trust Agreement"), among the Company, as
depositor, The Bank of New York, as property trustee (the "Property Trustee"),
The Bank of New York (Delaware), as Delaware trustee (the "Delaware Trustee")
and Wendy G. Hargus and R. Russell Davis, as administrative trustees (the
"Administrative Trustees"). In connection with the issuance by PSO Capital of
the Preferred Securities, PSO Capital is to purchase from the Company, as
contemplated in the Underwriting Agreement, Junior Subordinated Deferrable
Interest Debentures, [____]% Series due [____], in the principal amount of
$[_________] (the "Junior Subordinated Debentures"). The Junior Subordinated
Debentures are to be issued under and pursuant to the Indenture, dated as of
[_________], [____] (the "Indenture"), between the Company and The Bank of New
York, as trustee (the "Trustee"), and the related Supplemental Indenture dated
[_________], [____]. Also in connection with the issuance by PSO Capital of the
Preferred Securities, the Company will guarantee (the "Guarantee") the Preferred
Securities to the extent set forth in a Guarantee Agreement dated as of
[______], [____], between the Company and The Bank of New York, as trustee (the
"Guarantee Agreement"). Capitalized terms used herein and not otherwise defined
have the meanings ascribed to them in the Underwriting Agreement.
We have examined originals, or copies certified to our satisfaction,
of such corporate records of the Company and such trust records of PSO Capital,
indentures, agreements and other instruments, certificates of public officials,
certificates of officers and representatives of the Company and of PSO Capital
and other documents as we have deemed it necessary to require as a basis for the
opinions hereinafter expressed. In our examination we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity with the original documents of all documents
submitted to us as copies and the authenticity of the originals of such latter
documents. As to various questions of fact material to such opinions, we have,
when relevant facts were not independently established, relied upon
certifications by the Company, PSO Capital, officers of the Company, the
Property Trustee, the Delaware Trustee and the Administrative Trustees and other
appropriate persons and statements contained in the Registration Statement
hereinafter mentioned.
In addition, we attended the closing held today at our offices, during
the course of which (i) PSO Capital delivered the Preferred Securities to your
representatives at the office of The Depository Trust Company, 55 Water Street,
New York, New York, for your several accounts, in accordance with the
Underwriting Agreement, against payment therefor and (ii) the Company caused the
Junior Subordinated Debentures to be delivered to PSO Capital, against payment
thereof.
Based upon the foregoing, and having regard to legal considerations
which we deem relevant, we are of the opinion that:
1. The Company is a corporation validly existing
under the laws of the State of Oklahoma.
2. The Underwriting Agreement has been duly
authorized, executed and delivered by each of PSO Capital
and the Company.
3. The Registration Statement (Nos. [__________] and [____________])
on Form S-3, as amended, with respect to the Preferred Securities, the
Junior Subordinated Debentures and the Guarantee (the "Registration
Statement"), filed with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended (the
"Act"), has become effective and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending
under the Act. The Prospectus, dated [_____________], 1997, as amended by
the Prospectus Supplement, dated [____________], 1997 (the "Prospectus"),
including all documents incorporated by reference therein pursuant to the
requirements of Form S-3 under the Act, constituting a part thereof, may
lawfully be used for the purposes specified in the Act in connection with
the offer and sale of the Preferred Securities in the manner therein
specified, subject to compliance with the provisions of "blue sky" or
securities laws of certain States in connection with the offer for sale or
sale of the Preferred Securities in such States.
4. The Registration Statement and the Prospectus, including all
documents incorporated by reference pursuant to the requirements of Form
S-3 under the Act (other than financial statements and related schedules
and other financial and statistical data included or incorporated by
reference therein or omitted therefrom, as to which we express no opinion
or belief), as of their respective effective or issue dates complied as to
form, in all material respects, with the requirements of the Act (or, where
appropriate, the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) and to the applicable rules and regulations of the Commission under
each such statutes.
5. The statements under "Description of Preferred Securities",
"Description of Guarantees", "Description of Junior Subordinated
Debentures", "Description of Corresponding Junior Subordinated Debentures",
"Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures and the Guarantees" and "Plan of Distribution" in
the Prospectus, insofar as such statements constitute summaries of legal
matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings, and fairly summarize the matters referred to therein in all
material respects.
6. The order of the Commission, dated [____________], [____], in File
No. 70-[_________], under the Public Utility Holding Company Act of 1935,
as amended, relating to the offer and sale by PSO Capital of the Preferred
Securities, the sale by the Company of the Junior Subordinated Debentures
and the issuance by the Company of the Guarantee (being the order of the
Commission referred to in paragraph (s) of Section 2 of the Underwriting
Agreement) has been duly entered by the Commission and, to our knowledge,
remains in full force and effect. No further authorization, approval,
consent or order of any Federal governmental body or regulatory authority
is required for the authorization of the issuance or sale of the Junior
Subordinated Debentures and Preferred Securities and the undertaking of the
Company of the Guarantee in conformity with the order by the Company
pursuant to the terms of the Underwriting Agreement, except for (i) the
registration under the Act of the Preferred Securities, the Guarantee and
the Junior Subordinated Debentures and (ii) the qualification of the
Indenture, Trust Agreement and Guarantee Agreement under the Trust
Indenture Act of 1939, as amended.
7. The Guarantee Agreement has been duly and validly authorized by all
necessary corporate action of the Company and has been duly and validly
executed and delivered by the Company, and the Guarantee constitutes a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except (a) as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws of general applicability affecting the enforceability of
creditors' rights and (b) that enforceability may be limited by the
application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law), including without
limitation (i) the possible unavailability of specific performance,
injunctive relief or any other equitable remedies and (ii) concepts of
materiality, reasonableness, good faith and fair dealing.
8. The Indenture, the Trust Agreement and the Expense Agreement have
been duly and validly authorized by all necessary corporate action of the
Company, have been duly and validly executed and delivered by the Company,
and are valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except (a) as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws of general applicability affecting the enforceability of
creditors' rights and (b) that enforceability may be limited by the
application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law), including without
limitation (i) the possible unavailability of specific performance,
injunctive relief or any other equitable remedies and (ii) concepts of
materiality, reasonableness, good faith and fair dealing.
9. Each of the Indenture, the Trust Agreement and the Guarantee
Agreement have been duly qualified under the Trust Indenture Act of 1939,
as amended.
10. The issue and sale of the Junior Subordinated Debentures by the
Company as contemplated by the Underwriting Agreement have been duly
authorized by all necessary corporate action. The Junior Subordinated
Debentures, when duly executed, authenticated and delivered to PSO Capital,
against payment to the Company of the agreed consideration therefor, will
be (subject to the qualifications stated in paragraph 8 above) valid and
binding obligations of the Company and are entitled to the benefits
afforded by the Indenture in accordance with the terms of the Indenture and
the Junior Subordinated Debentures.
11. To our knowledge, there are no legal or governmental proceedings
pending or threatened to which the Company is a party which are required to
be disclosed in the Prospectus, other than those disclosed therein; and, to
our knowledge, there are no contracts or documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described therein or
filed therewith.
12. Neither PSO Capital nor the Company is an "investment company" nor
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
The Registration Statement was filed on Form S-3 under the Act and,
accordingly, the Prospectus does not necessarily contain a current description
of the Company's business and affairs since Form S-3 provides for the
incorporation by reference of certain documents filed with the Commission which
contain descriptions as of various dates. We participated in the preparation of
the Registration Statement and Prospectus and we have reviewed certain documents
filed by the Company under the Exchange Act, which are incorporated by reference
in the Prospectus (such documents listed in the Prospectus as being incorporated
by reference are herein called the "Incorporated Documents"). Although we have
not independently verified the accuracy, completeness or fairness of the
statements contained therein or in the Incorporated Documents, none of the
foregoing disclosed to us any information which gave us reason to believe that
the Registration Statement and the Incorporated Documents, considered as a whole
on the effective date of the Registration Statement, contained or contain any
untrue statement of a material fact or omitted or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus and the Incorporated Documents,
considered as a whole on the date hereof, contained or contain any untrue
statement of a material fact or omitted or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. Except as set forth in paragraphs 3 and 4 above, we
express no opinion as to any document filed by the Company under the Exchange
Act, whether prior or subsequent to such effective date, except to the extent
that such documents are Incorporated Documents read together with the
Registration Statement or the Prospectus and considered as a whole, nor do we
express any opinion as to the operating statistics, financial statements or
other financial data included in or omitted from, or incorporated by reference
in, the Registration Statement, the Prospectus or the Incorporated Documents.
In rendering the opinions hereinabove expressed, we have relied, with
your permission, subject to the assumptions, qualifications or limitations
therein, upon the opinions of Doerner, Saunders, Daniel & Anderson, special
Oklahoma counsel to the Company as to all matters of Oklahoma law, [ ],
special Texas counsel to the Company as to all matters of Texas law, and
Richards, Layton & Finger, P.A., special Delaware counsel to the Company and PSO
Capital, to the extent that Delaware law other than the General Corporation Law
of the State of Delaware, including Delaware trust law, is concerned, furnished
pursuant to paragraphs [ ], respectively, of Section 7 of the Underwriting
Agreement.
We are members of the bar of the State of New York and we do not
express any opinion as to matters governed by any laws other than the laws of
the State of New York, the General Corporation Law of the State of Delaware and
the Federal laws of the United States of America, and, with your consent as set
forth above, and solely in reliance upon opinions of special counsel to the
Company and PSO Capital, the laws of the States of Delaware (other than the
General Corporation Law), Oklahoma and Texas.
Very truly yours,
RBW/DBB/JMH
Annex II(d)
Form of Christy & Viener Opinion
to be delivered pursuant to section 7(e)
Merrill Lynch, Pierce, Fenner & Smith Incorporated
[Names of Co-Representative(s)]
As Representatives of the several
Underwriters
c/o Merrill Lynch & Co.
World Financial Center - North Tower
New York, New York 10281
Ladies and Gentlemen:
We have acted as special tax counsel to Public Service Company of
Oklahoma, an Oklahoma corporation (the "Company) and PSO Capital I, a Delaware
statutory business trust (the "Trust") in connection with the offering by the
Trust of its Trust Originated Preferred Securities, Series A (the "Series A
Preferred Securities"), as described in the Registration Statement on Form S-3
(the "Registration Statement"), filed by the Company, the Trust, and PSO Capital
II, a Delaware statutory business trust, with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended. The Registration
Statement includes the Prospectus and the Prospectus Supplement dated as of [ ,
1997] (collectively, the "Prospectuses"), relating to such offering. Capitalized
terms not defined herein have the meanings specified in the Prospectuses.
In rendering the opinions expressed below, we have examined the
Prospectuses and such other documents as we have deemed relevant and necessary,
including, without limitation, the Amended and Restated Trust Agreement, the
Indenture, and the Guarantee Agreement relating to the Series A Preferred
Securities each dated as of [ , 1997]. Such opinions are conditioned, among
other things, upon the accuracy and completeness of the facts, information and
representations contained in the Prospectuses as of the date hereof. We have not
undertaken any independent investigation of any factual matters set forth in the
Prospectuses or such other documents. We have assumed that the transactions
contemplated by the Prospectuses and such other documents will occur as provided
therein. We have also assumed that the Series A Preferred Securities, when
issued, will be rated not less than [ ] by Standard & Poor's Rating Services and
[ ]by Moody's Investors Service, Inc.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of all natural
persons, and the conformity with original documents of all copies submitted to
us for our examination. We have also assumed that all obligations imposed by
such documents on the parties thereto are or will be enforceable, and have been
or will be performed or satisfied in accordance with their terms. In addition,
we have relied, with your consent, on the opinion of Richards, Layton & Finger
with respect to the validity of the Series A Preferred Securities, the
enforceability of the Amended and Restated Trust Agreement, and the formation of
the Trust and on the opinion of Milbank, Tweed, Hadley & McCloy with respect to
the validity of the Series A Debentures and the Series A Guarantee.
In rendering the opinions expressed below, we have considered the
applicable provisions of the Internal Revenue Code of 1986, as amended the (the
"Code"), regulations promulgated thereunder by the United States Treasury
Department (the "Regulations"), pertinent judicial authorities, rulings of the
Internal Revenue Service, and such other authorities as we have considered
relevant. It should be noted that the Code, the Regulations, and such judicial
decisions, administrative interpretations and other authorities are subject to
change at any time and, in some circumstances, with retroactive effect, and any
such change could affect the opinions stated herein.
Based upon and subject to the foregoing, we are of the opinion that:
(i) under current law, for United States federal income tax purposes
(A) the Series A Debentures will constitute indebtedness of the Company and (B)
the interest on the Series A Debentures will be deductible by the Company in
accordance with section 163 of the Code and the Regulations promulgated
thereunder, subject to any applicable limitations on the Company's ability to
deduct interest on any of its indebtedness;
(ii) under current law, the Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation; accordingly, for United States federal income tax purposes,
each beneficial owner of Series A Preferred Securities generally will be
considered the owner of an undivided beneficial interest in the Series A
Debentures, and will be required to include in its gross income its allocable
share of any interest and original issue discount paid or accrued with respect
to the Series A Debentures; and
(iii) the discussion set forth in the Prospectus Supplement under the
caption "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" is a fair and accurate
summary of the matters addressed therein, based upon current law and the
assumptions stated or referred to therein.
We assume no obligation to update or supplement this letter to reflect
any facts or circumstances which may hereafter come to our attention with
respect to the opinions expressed above, including any changes in applicable law
which may hereafter occur.
Very truly yours,
ANNEX II(e)
FORM OF DOERNER, SAUNDERS, DANIEL
& ANDERSON OPINION LETTER
________________, 1997
Merrill Lynch, Pierce Fenner & Smith Incorporated
[Names of Co-Representatives]
c/o Merrill Lynch & Co.
World Financial Center - North Tower
New York, New York 10281
Ladies and Gentlemen:
We have acted as special Oklahoma counsel to Public Service Company of
Oklahoma, an Oklahoma corporation (the "Company"), in connection with the
proposed public offering by the Company from time to time of up to $75 million
aggregate principal amount of the Company's Junior Subordinated Debentures (the
"Subordinated Debentures") to be issued in one or more series pursuant to an
indenture between the Company and The Bank of New York, as Trustee (the
"Indenture"), and the proposed issuance and sale by PSO Capital I and PSO
Capital II, each a business trust created under the laws of the State of
Delaware (collectively, the "Issuer Trusts"), from time to time in one or more
series, not to exceed $75 million, of their preferred securities, representing
preferred undivided beneficial interests in the assets of such Issuer Trusts
(the "Preferred Securities"). This opinion is being furnished to you pursuant to
Paragraph 7(f) of the Underwriting Agreement dated __________________, 1997,
between PSO Capital I, the Company and Goldman, Sachs & Co. and
____________________, as Representatives of the several Underwriters.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Underwriting Agreement.
We have examined originals or certified copies of all such corporate
records of the Company, Indentures, agreements and other instruments,
certificates of public officials, certificates of officers and representatives
of the Company and other documents that we considered necessary and proper in
order to render the opinions hereinafter expressed. In our examination we have
assumed the genuineness of all signatures, the accuracy and completeness of all
documents submitted to us, the authenticity of all documents submitted to us as
originals and the conformity to original documents of all documents submitted to
us as certified or photostatic copies. As to factual matters material to the
opinions herein stated, we have relied to the extent we deem such reliance
Page 2
proper upon certificates given or representations made by public officials and
duly authorized representatives of the Company.
Based upon the foregoing, and subject to the qualifications hereinafter set
forth, we are of the opinion that:
The Company is a corporation, duly incorporated, validly existing and
in good standing under the laws of the State of Oklahoma. The Company has the
corporate power and authority to own its property and conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified or be in good standing would not have a material
adverse effect on the financial condition, result of operations or business of
the Company and its subsidiaries, taken as a whole (a "Material Adverse
Effect"). The Company has the legal right to function and operate as a public
utility in the State of Oklahoma supplying therein electric service.
The Company has valid and subsisting franchises, licenses or permits
relating to its operations in the State of Oklahoma, authorizing the Company to
carry on its present operations in said State.
Except as set forth in the Prospectus, including documents
incorporated by reference therein, to our knowledge, there is no litigation or
other legal proceeding pending or threatened in the State of Oklahoma to which
the Company is a party or to which property of the Company is subject that might
reasonably be expected to result in a Material Adverse Effect.
The issuance and sale of the Preferred Securities and the issuance of
the Subordinate Debentures and the Guarantee as contemplated by the Underwriting
Agreement and the Prospectus, have been authorized by an Order and Certificate
of Authority of the Corporation Commission of the State of Oklahoma, dated
________, 1997, which Order has been duly entered and, to the best of our
knowledge, is in full force and effect. No further approval, authorization,
consent, certificate or order of any state governmental body or regulatory
authority of the State of Oklahoma is necessary in connection with the issuance
and sale of the Preferred Securities or the issuance of the Subordinated
Debentures and the Guarantee as contemplated by the Underwriting Agreement and
the Prospectus, except as may be required by the "blue sky" or securities laws
Page 3
or regulations of the State of Oklahoma and as may be required by the Oklahoma
Corporation Commission.
Each of the Underwriting Agreement and the Pricing Agreement has been
duly authorized, executed and delivered by the Company.
Each of the Guarantee Agreement, the Trust Agreement, the Indenture
and the Expense Agreement (together the "Guarantor Agreements") has been duly
authorized, executed and delivered by the Company and the Guarantee has been
duly authorized and, when issued and delivered pursuant to the Underwriting
Agreement, will have been duly executed, issued and delivered.
The Subordinated Debentures have been duly authorized, executed and
delivered by the Company.
The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Underwriting Agreement, the Pricing
Agreement and each of the Guarantor Agreements and the issuance by the Company
of the Guarantee and the Subordinated Debentures will not result in a breach of
any provision of the Restated Certificate of Incorporation or bylaws of the
Company or, to our knowledge, any agreement or instrument to which the Company
is a party that is material to the Company or, to our knowledge, result in a
violation of any provision of applicable law of the State of Oklahoma (provided
that no opinion is expressed with respect to the indemnification provision in
the Underwriting Agreement insofar as public policy considerations may affect
the performance thereof) or any judgment, decree or order applicable to the
Company of any governmental body or agency of the State of Oklahoma or any court
having jurisdiction over the Company in the State of Oklahoma.
With respect to the opinions contained in paragraph 1 above regarding the
valid existence of the Company, we have relied solely upon (i) certificates
provided by officials of the State of Oklahoma or (ii) oral confirmation
therefrom where such certificates were unavailable as of the date hereof.
With respect to the opinions contained in paragraph 2, above, we have
relied solely upon certificates of officers of the Company and searches as of
recent dates of our files, the Company's records and court records of the
following courts: the state district courts for Tulsa County, Oklahoma County;
and the federal district courts for the Northern District of Oklahoma.
With respect to the opinions contained in paragraph 8, above, we have
relied solely upon certificates of officers of the Company as to which
agreements and instruments are material to the Company.
We are licensed to practice law in the State of Oklahoma and do not hold
ourselves out to be experts on the laws of any jurisdiction other than the State
of Oklahoma. We express no opinion with regard to any matter which may be
governed by the laws of any state or other jurisdiction (including the United
States of America) other than the State of Oklahoma.
This opinion is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters herein expressly stated. We
undertake no obligation to update or supplement our opinions herein as a result
of events or actions occurring after the date hereof.
Except as provided otherwise in a written consent signed by us, the
opinions expressed herein are for the sole benefit of, and may only be relied
upon by you, your counsel and Milbank, Tweed, Hadley & McCloy, special counsel
for the Company, and the opinions herein expressed are not to be used,
circulated, quoted or otherwise referred to in any manner other than as
specifically provided in the Underwriting Agreement, or by or to any other
person.
Very truly yours,
ANNEX III
Form of letter of Arthur Andersen LLP
to be delivered pursuant to Section 7(h)
Pursuant to Section 7(h) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Guarantor and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Prospectus or the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act,
as applicable, and the related published rules and regulations
thereunder, and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial
statements of the Guarantor for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been separately
furnished to the representatives of the Underwriters (the
"Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or the Guarantor's quarterly reports on Form 10-Q
incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which have been separately furnished to the
Representatives; and on the basis of specified procedures including
inquiries of officials of the Guarantor who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Guarantor for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Guarantor's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Guarantor's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d) respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Guarantor and its subsidiaries, inspection
of the minute books of the Guarantor and its subsidiaries since the date
of the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Guarantor and
its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements
of cash flows included in the Prospectus and/or included or
incorporated by reference in the Guarantor's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus or included in the Guarantor's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus, for them
to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
or incorporated by reference in the Guarantor's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with the
basis for the audited financial statements included or
incorporated by reference in the Guarantor's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included or
incorporated by reference in the Prospectus) or any increase in
the consolidated long-term debt of the Guarantor and its
subsidiaries, or any decreases in consolidated net current assets
or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E) there
were any decreases in consolidated net revenue or operating
profit or the total or per share amounts of consolidated net
income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with the comparable period in the preceding year
and with any other period of corresponding length specified by
the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Guarantor and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference), or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Guarantor and its subsidiaries and
have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement and to the Prospectus as amended
or supplemented (including all documents incorporated by reference therein) for
the purposes of the letter delivered either (i) on the effective date of any
post-effective amendment to the Registration Statement or Rule 462(b)
Registration Statement filed subsequent to the date of the Underwriting
Agreement or (ii) at the Time of Delivery, as the case may be.
Exhibit 4(a)
PUBLIC SERVICE COMPANY OF OKLAHOMA
AND
THE BANK OF NEW YORK,
AS TRUSTEE
INDENTURE
DATED AS OF ____________, 1997
JUNIOR SUBORDINATED DEBENTURES
CROSS-REFERENCE TABLE
Section of
Trust Indenture Act Section of
OF 1939, AS AMENDED INDENTURE
310(a) 7.09
310(b) 7.08
7.10
310(c) Inapplicable
311(a) 7.13
311(c) Inapplicable
312(a) 5.01
5.02(a)
312(b) 5.02(c)
5.02(d)
312(c) 5.02(e)
313(a) 5.04(a)
313(b) 5.04(b)
313(c) 5.04(a)
5.04(b)
313(d) 5.04(c)
314(a) 5.03
314(b) Inapplicable
314(c) 13.06
314(d) Inapplicable
314(e) 13.06
314(f) Inapplicable
315(a) 7.01(a)
7.02
315(b) 6.07
315(c) 7.01
315(d) 7.01(b)
7.01(c)
315(e) 6.08
316(a) 6.06
8.04
316(b) 6.04
316(c) 8.01
317(a) 6.02
317(b) 4.03
318(a) 13.08
TABLE OF CONTENTS*
PAGE
RECITALS................................................. 1
ARTICLE ONE
Definitions....................... 2
SECTION 1.01............................................. 2
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures......... 6
SECTION 2.01............................................. 6
SECTION 2.02............................................. 8
SECTION 2.03............................................. 8
SECTION 2.04............................................. 11
SECTION 2.05............................................. 12
SECTION 2.06............................................. 13
SECTION 2.07............................................. 14
SECTION 2.08............................................. 15
SECTION 2.09............................................. 15
SECTION 2.10............................................. 15
SECTION 2.11............................................. 16
SECTION 2.12. .......................................... 19
SECTION 2.13............................................. 19
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions... 20
SECTION 3.01............................................. 20
SECTION 3.02............................................. 20
SECTION 3.03............................................. 21
SECTION 3.04............................................. 22
SECTION 3.05............................................. 22
SECTION 3.06............................................. 22
ARTICLE FOUR
Particular Covenants of the Company........... 23
SECTION 4.01............................................. 23
SECTION 4.02............................................. 23
SECTION 4.03............................................. 23
SECTION 4.04............................................. 25
SECTION 4.05............................................. 25
SECTION 4.06............................................. 25
_________________
* This Table of Contents does not constitute part of the Indenture and
should not have any bearing upon the interpretation of any of its terms
or provisions.
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee..................... 26
SECTION 5.01............................................. 26
SECTION 5.02............................................. 26
SECTION 5.03............................................. 28
SECTION 5.04............................................. 29
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default................... 30
SECTION 6.01............................................. 30
SECTION 6.02............................................. 33
SECTION 6.03............................................. 35
SECTION 6.04............................................. 35
SECTION 6.05............................................. 36
SECTION 6.06............................................. 36
SECTION 6.07............................................. 37
SECTION 6.08............................................. 38
ARTICLE SEVEN
Concerning the Trustee.................. 38
SECTION 7.01............................................. 38
SECTION 7.02............................................. 40
SECTION 7.03............................................. 42
SECTION 7.04............................................. 42
SECTION 7.05............................................. 42
SECTION 7.06............................................. 43
SECTION 7.07............................................. 43
SECTION 7.08............................................. 44
SECTION 7.09............................................. 44
SECTION 7.10............................................. 44
SECTION 7.11............................................. 46
SECTION 7.12............................................. 47
SECTION 7.13............................................. 48
ARTICLE EIGHT
Concerning the Debentureholders............. 48
SECTION 8.01............................................. 48
SECTION 8.02............................................. 49
SECTION 8.03............................................. 49
SECTION 8.04............................................. 49
SECTION 8.05............................................. 50
ARTICLE NINE
Supplemental Indentures................. 50
SECTION 9.01............................................. 50
SECTION 9.02............................................. 52
SECTION 9.03............................................. 53
SECTION 9.04............................................. 53
SECTION 9.05............................................. 53
ARTICLE TEN
Consolidation, Merger and Sale.............. 53
SECTION 10.01............................................ 53
SECTION 10.02............................................ 54
SECTION 10.03............................................ 55
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys..................... 55
SECTION 11.01............................................ 55
SECTION 11.02............................................ 56
SECTION 11.03............................................ 57
SECTION 11.04............................................ 58
SECTION 11.05............................................ 58
SECTION 11.06............................................ 58
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors...................... 58
SECTION 12.01............................................ 58
ARTICLE THIRTEEN
Miscellaneous Provisions................. 59
SECTION 13.01............................................ 59
SECTION 13.02............................................ 59
SECTION 13.03............................................ 59
SECTION 13.04............................................ 60
SECTION 13.05............................................ 60
SECTION 13.06............................................ 60
SECTION 13.07............................................ 61
SECTION 13.08............................................ 61
SECTION 13.09............................................ 61
SECTION 13.10............................................ 61
SECTION 13.11............................................ 61
SECTION 13.12............................................ 61
ARTICLE FOURTEEN
Subordination of Debentures............... 62
SECTION 14.01............................................ 62
SECTION 14.02............................................ 62
SECTION 14.03............................................ 63
SECTION 14.04............................................ 64
SECTION 14.05............................................ 65
SECTION 14.06............................................ 65
SECTION 14.07............................................ 66
SECTION 14.08............................................ 67
THIS INDENTURE, dated as of the ____ day of _________, 1997, between
PUBLIC SERVICE COMPANY OF OKLAHOMA, a corporation duly organized and existing
under the laws of the State of Oklahoma (hereinafter sometimes referred to as
the "Company"), and THE BANK OF NEW YORK, a New York banking corporation
organized and existing under the laws of the State of New York, as trustee
(hereinafter sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of debentures (hereinafter referred to as the "Debentures"), in an
unlimited aggregate principal amount to be issued from time to time in one or
more series as in this Indenture provided as registered Debentures without
coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication to be
borne by the Debentures (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) or set forth in any indenture supplemental to this Indenture; and
WHEREAS, all acts and things necessary to make the Debentures issued
pursuant hereto, when executed by the Company and authenticated and delivered by
the Trustee as in this Indenture provided, the valid, binding and legal
obligations of the Company, and to constitute these presents a valid indenture
and agreement according to its terms, have been done and performed or will be
done and performed prior to the issuance of the Debentures, and the execution of
this Indenture and the issuance hereunder of the Debentures have been or will be
prior to issuance in all respects duly authorized, and the Company, in the
exercise of the legal right and power in it vested, executes this Indenture and
proposes to make, execute, issue and deliver the Debentures;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are and are to be authenticated, issued and delivered, and in
consideration of the premises, of the purchase and acceptance of the Debentures
by the holders thereof and of the sum of one dollar ($1.00) to it duly paid by
the Trustee at the execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee, for the equal
and proportionate benefit (subject to the provisions of this Indenture) of the
respective holders from time to time of the Debentures, without any
discrimination, preference or priority of any one Debenture over any other by
reason of priority in the time of issue, sale or negotiation thereof, or
otherwise, except as provided herein, as follows:
ARTICLE ONE
Definitions
SECTION 1.01. The terms defined in this Section (except as in this
Indenture otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture, any resolution of the Board of Directors of
the Company and of any indenture supplemental hereto shall have the respective
meanings specified in this Section. All other terms used in this Indenture which
are defined in the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act") or which are by reference in the Trust Indenture Act defined in the
Securities Act of 1933, as amended (the "Securities Act"), (except as herein
otherwise expressly provided or unless the context otherwise requires), shall
have the meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force at the date of the execution of this instrument.
"Authenticating Agent" shall mean an authenticating agent with respect
to all or any of the series of Debentures, as the case may be, appointed with
respect to all or any series of the Debentures, as the case may be, by the
Trustee pursuant to Section 2.10.
"Board of Directors" shall mean the Board of Directors of the Company,
or any committee of such Board duly authorized to act on behalf thereof
hereunder.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification.
"Business Day" shall mean, with respect to any series of Debentures,
any day other than (i) a Saturday or Sunday or (ii) a day on which banking
institutions in the Borough of Manhattan, the City and State of New York or any
city in which the Trustee's Corporate Trust Office is located, are authorized or
required to close.
"Certificate" shall mean a certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
of the Company. The Certificate need not comply with the provisions of Section
13.05.
"Corporate Trust Office" shall mean the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of the execution of this Indenture is located at 101
Barclay Street, New York, NY 10286, Attention: Corporate Trust
Trustee Administration.
"Company" shall mean Public Service Company of Oklahoma, a corporation
duly organized and existing under the laws of the State of Oklahoma, and,
subject to the provisions of Article Ten, also includes its successors and
assigns.
"Debenture" or "Debentures" shall mean any Debenture or Debentures, as
the case may be, authenticated and delivered under this Indenture.
"Debentureholder," "holder of Debentures," "registered holder" or
other similar term shall mean the person or persons in whose name or names a
particular Debenture shall be registered on the books of the Company kept for
that purpose in accordance with the terms of this Indenture.
"default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Depositary" shall mean, with respect to Debentures of any series for
which the Company shall determine that such Debentures will be issued as a
Global Debenture, The Depository Trust Company, New York, New York, another
clearing agency or any successor registered as a clearing agency under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.
"Event of Default" shall mean, with respect to Debentures of a
particular series, any event specified in Section 6.01, continued for the period
of time, if any, therein designated.
"Fixed Maturity" shall mean when used with respect to any Debenture or
any installment of principal thereof, the date specified pursuant to the terms
of such Debenture as the fixed date on which principal of such Debenture or such
installment of principal is due and payable, as such date may be shortened as
provided pursuant to the terms of such Debenture and this Indenture.
"Global Debenture" shall mean, with respect to any series of
Debentures, a Debenture executed by the Company and delivered by the Trustee to
the Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
"Governmental Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the specific payment of principal of or interest on the Governmental
Obligation evidenced by such depository receipt.
"Indenture" shall mean this instrument as originally executed, or, if
amended or supplemented as herein provided, as so amended or supplemented.
"Interest Payment Date," when used with respect to any installment of
interest on a Debenture of a particular series, shall mean the date specified in
such Debenture, a Board Resolution or an indenture supplemental hereto with
respect to that series as the fixed date on which an installment of interest
with respect to Debentures of that series is due and payable.
"Officer's Certificate" shall mean a certificate signed by the
President, General Manager, Treasurer or an Assistant Treasurer, Controller or
an Assistant Controller or the Secretary or an Assistant Secretary of the
Company. Each such certificate shall include the statements provided for in
Section 13.05, if and to the extent required by the provisions thereof.
"Opinion of Counsel" shall mean an opinion in writing signed by legal
counsel, who may be counsel for the Company, reasonably acceptable to the
Trustee. Each such opinion shall include the statements provided for in Section
13.05, if and to the extent required by the provisions thereof.
"outstanding", when used with reference to Debentures of any series,
shall mean, subject to the provisions of Section 8.04, as of any particular
time, all Debentures of that series theretofore authenticated and delivered by
the Trustee under this Indenture, except (a) Debentures theretofore canceled by
the Trustee or any paying agent, or delivered to the Trustee or any paying agent
for cancellation or which have previously been canceled; (b) Debentures or
portions thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that if such Debentures or portions of
such Debentures are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; (c)
Debentures in lieu of or in substitution for which other Debentures shall have
been authenticated and delivered pursuant to the terms of Section 2.07; and (d)
Debentures paid pursuant to Section 2.07.
"Predecessor Debenture" of any particular Debenture shall mean every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by that particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.07 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"Responsible Officer," when used with respect to the Trustee, shall
mean the chairman of the board of directors, president, any vice president,
secretary, treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Senior Indebtedness" of the Company shall mean the principal of, and
premium, if any, and interest on and any other payment due pursuant to any of
the following, whether outstanding at the date of execution of this Indenture or
thereafter incurred, created or assumed: (a) all indebtedness of the Company
evidenced by notes, debentures, bonds or other securities sold by the Company
for money, (b) all indebtedness of others of the kinds described in the
preceding clause (a) assumed by or guaranteed in any manner by the Company or in
effect guaranteed by the Company through an agreement to purchase, contingent or
otherwise, (c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) and (b) and (d) any
payment of money relating to any lease which is capitalized on the balance sheet
or consolidated balance sheet, as the case may be, of the Company, in accordance
with generally accepted accounting principles as in effect from time to time,
unless, in the case of any particular indebtedness, renewal, extension,
refunding or lease payment, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension, refunding or lease payment is not superior in
right of payment to or is PARI PASSU with the Debentures. Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions set forth in Article Fourteen of this
Indenture irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
"Trustee" shall mean The Bank of New York and, subject to the
provisions of Article Seven, shall also include its successors and assigns, and
if at any time there is more than one person acting in such capacity hereunder,
"Trustee" means each such person. The term "Trustee" as used with respect to a
particular series of the Debentures means the trustee with respect to that
series.
"Trust Indenture Act," subject to the provisions of Sections 9.01,
9.02 and 10.01, shall mean the Trust Indenture Act of 1939, as amended and in
effect at the date of execution of this Indenture.
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures
SECTION 2.01. The aggregate principal amount of Debentures which may
be authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by or
pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a particular
series. Prior to the initial issuance of Debentures of any series, there shall
be established in or pursuant to a Board Resolution delivered to the Trustee,
and set forth in an Officer's Certificate delivered to the Trustee, or
established in one or more indentures supplemental hereto:
(1) the title of the Debentures of the series (which
shall distinguish the Debentures of that series from all
other Debentures);
(2) any limit upon the aggregate principal amount of the Debentures of
that series which may be authenticated and delivered under this Indenture
(except for Debentures authenticated and delivered upon registration of
transfer of, in exchange for or in lieu of other Debentures of that
series);
(3) the date or dates on which the principal of the Debentures of that
series is payable or the method of determination thereof (including any
provision for shortening thereof);
(4) the rate or rates at which the Debentures of that series shall
bear interest, if any, or the manner of calculation of such rate or rates;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner
of determination of such Interest Payment Dates and the record dates for
the determination of holders to whom interest is payable on any such
Interest Payment Dates;
(6) the right of the Company, if any, to extend or
defer the interest payment periods and the duration of such
extension or deferral;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Debentures of that series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Debentures of that series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a holder thereof and the
period or periods within which, the price or prices at which and the terms
and conditions upon which, Debentures of that series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) the form of the Debentures of that series,
including the form of the Certificate of Authentication for
that series;
(10) if denominations of other than $25 or any integral multiple
thereof, the denominations in which Debentures of that series shall be
issuable;
(11) whether the Debentures are issuable as a Global
Debenture and, in such case, the identity of the Depositary
for that series; and
(12) any and all other terms with respect to that series (which terms
shall not be inconsistent with the terms of this Indenture).
All Debentures of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Board Resolution or in any indentures supplemental hereto.
If any of the terms of that series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officer's
Certificate setting forth the terms of that series.
SECTION 2.02. The Debentures of any series and the Certificate of
Authentication to be borne by such Debentures shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto or
as provided in a Board Resolution and as set forth in an Officer's Certificate,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Debentures of that series may be listed, or to
conform to usage.
SECTION 2.03. The Debentures shall be issuable as registered
Debentures and in denominations of $25 or any integral multiple thereof, subject
to Section 2.01(10). The Debentures of a particular series shall bear interest
payable on the dates and at the rate or rates specified with respect to that
series. The principal of and the interest on the Debentures of any series, as
well as any premium thereon in case of redemption thereof prior to maturity,
shall be payable in the coin or currency of the United States of America which
at the time is legal tender for public and private debt, at the office or agency
of the Company maintained for that purpose in the Borough of Manhattan, the City
and State of New York (which, unless changed, shall be a Corporate Trust Office
or agency of the Trustee). At the Company's option, payments on the Debentures
of any series may also be made (i) by checks mailed by the Trustee to the
holders entitled thereto at their registered addresses or (ii) to a holder of
$1,000,000 or more in aggregate principal amount of the Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date electing to have payments made by wire transfer
to a designated account in the United States, by wire transfer of immediately
available funds to such designated account; provided that, in either case, the
payment of principal with respect to any Debenture will be made only upon
surrender of that Debenture to the Trustee. Each Debenture shall be dated the
date of its authentication. Interest on the Debentures shall be computed on the
basis of a 360-day year composed of twelve 30-day months and, for any period
shorter than a full calendar month, on the basis of the actual number of days
elapsed in such period.
The interest installment on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name that
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Debenture of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and prior to such Interest Payment Date,
interest on that Debenture will be paid upon presentation and surrender of that
Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Debentures of the
same series (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant regular record date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered at the close of business
on a special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each such Debenture and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest
which shall not be more than 15 nor less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed,
first-class postage prepaid, to each Debentureholder at his or her address
as it appears in the Debenture Register (as hereinafter defined), not less
than 10 days prior to such special record date. Notice of the proposed
payment of such Defaulted Interest and the special record date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to
the persons in whose names such Debentures (or their respective Predecessor
Debentures) are registered on such special record date and shall be no
longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Unless otherwise set forth in a Board Resolution or one or more
indentures supplemental hereto establishing the terms of any series of
Debentures pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debentures with respect to any
Interest Payment Date for that series shall mean either the 15th day of the
month immediately preceding the month in which an Interest Payment Date
established for that series pursuant to Section 2.01 hereof shall occur, if such
Interest Payment Date is the first day of a month, or the last day of the month
immediately preceding the month in which an Interest Payment Date established
for such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the 15th day of a month, whether or not such date is a Business
Day.
Subject to the foregoing provisions of this Section, each Debenture of
a series delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debenture of such series shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other Debenture.
SECTION 2.04. The Debentures shall, subject to the provisions of
Section 2.06, be printed on steel engraved borders or fully or partially
engraved, or legibly typed, as the proper officers of the Company may determine,
and shall be signed on behalf of the Company by its President or General
Manager, under its corporate seal attested by its Secretary or one of its
Assistant Secretaries. The signature of the President or General Manager and/or
the signature of the Secretary or an Assistant Secretary in attestation of the
corporate seal, upon the Debentures, may be in the form of a facsimile signature
of a present or any future President or General Manager and of a present or any
future Secretary or Assistant Secretary and may be imprinted or otherwise
reproduced on the Debentures and for that purpose the Company may use the
facsimile signature of any person who shall have been a President or General
Manager, or of any person who shall have been a Secretary or Assistant
Secretary, notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of that person shall have ceased to be
the President or General Manager, or the Secretary or an Assistant Secretary, of
the Company, as the case may be. The seal of the Company may be in the form of a
facsimile of the seal of the Company and may be impressed, affixed, imprinted or
otherwise reproduced on the Debentures.
Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate executed by the Trustee, or by any Authenticating Agent appointed by
the Trustee with respect to such Debentures, upon any Debenture executed by the
Company shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and made available for delivery hereunder and that the
holder is entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures, signed by its
President or General Manager and its Treasurer or any Assistant Treasurer, and
the Trustee in accordance with such written order shall authenticate and make
available for delivery such Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, (i) an Opinion of Counsel and (ii) an Officer's
Certificate, each stating that the form and terms thereof have been established
in conformity with the provisions of this Indenture. Each Opinion of Counsel and
Officer's Certificate delivered pursuant to this Section 2.04 shall include all
statements prescribed by Section 13.05(b) hereof.
The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture will, in the good faith
judgment of the Trustee, affect the Trustee's own rights, duties or immunities
under the Debentures and this Indenture or otherwise in a manner that is not
reasonably acceptable to the Trustee.
SECTION 2.05. (a) Debentures of any series may be exchanged upon
presentation thereof at the office or agency of the Company designated for such
purpose in the Borough of Manhattan, the City and State of New York, for other
Debentures of such series of authorized denominations, and for a like aggregate
principal amount, upon payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, all as provided in this Section. In
respect of any Debentures so surrendered for exchange, the Company shall
execute, the Trustee shall authenticate and such office or agency shall make
available for delivery in exchange therefor the Debenture or Debentures of the
same series which the Debentureholder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company, a register
or registers (herein referred to as the "Debenture Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall register
the Debentures and the transfers of Debentures as in this Article provided and
which at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Debentures and transfer of Debentures
as herein provided shall be appointed as authorized by Board Resolution (the
"Debenture Registrar").
Upon surrender for transfer of any Debenture at the office or agency
of the Company designated for such purpose in the Borough of Manhattan, the City
and State of New York, the Company shall execute, the Trustee shall authenticate
and such office or agency shall make available for delivery in the name of the
transferee or transferees a new Debenture or Debentures of the same series as
the Debenture presented for a like aggregate principal amount.
All Debentures presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so required
by the Company or the Debenture Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company and the Debenture
Registrar, duly executed by the registered holder or by his duly authorized
attorney in writing.
(c) Except as provided in the first paragraph of Section 2.07, no
service charge shall be made for any exchange or registration of transfer of
Debentures, or issue of new Debentures in case of partial redemption of any
series, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, other than exchanges pursuant
to Section 2.06, the second paragraph of Section 3.03 and Section 9.04 not
involving any transfer.
(d) The Company shall neither be required (i) to issue, exchange or
register the transfer of any Debentures of any series during a period beginning
at the opening of business 15 days before the day of selection for redemption of
Debentures of that series and ending at the close of business on the earliest
date on which the relevant notice of redemption is deemed to have been given to
all holders of Debentures of that series to be redeemed, nor (ii) to register
the transfer of or exchange any Debentures of any series or portions thereof
called for redemption, except the unredeemed portion of any Debentures being
redeemed in part. The provisions of this Section 2.05 are, with respect to any
Global Debenture, subject to Section 2.11 hereof.
SECTION 2.06. Pending the preparation of definitive Debentures of any
series, the Company may execute, and the Trustee shall authenticate and make
available for delivery, temporary Debentures (printed, lithographed or
typewritten) of any authorized denomination, and substantially in the form of
the definitive Debentures in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Debentures, all as may be determined by the Company. Every temporary Debenture
of any series shall be executed by the Company and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Debentures of that series in accordance with the
terms of Section 2.04 hereof. Without unnecessary delay the Company will execute
and will furnish definitive Debentures of such series and thereupon any or all
temporary Debentures of that series may be surrendered in exchange therefor
(without charge to the holders), at the office or agency of the Company
designated for the purpose in the Borough of Manhattan, the City and State of
New York, and the Trustee shall authenticate and such office or agency shall
make available for delivery in exchange for such temporary Debentures an equal
aggregate principal amount of definitive Debentures of that series, unless the
Company advises the Trustee to the effect that definitive Debentures need not be
executed and furnished until further notice from the Company. Until so
exchanged, the temporary Debentures of that series shall be entitled to the same
benefits under this Indenture as definitive Debentures of that series
authenticated and made available for delivery hereunder.
SECTION 2.07. In case any temporary or definitive Debenture shall
become mutilated or be destroyed, lost or stolen, the Company (subject to the
next succeeding sentence) shall execute, and upon its request the Trustee
(subject as aforesaid) shall authenticate and make available for delivery, a new
Debenture of the same series bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Debenture, or in lieu of and in
substitution for the Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company and to the
Trustee such security or indemnity as may be required by them to save each of
them harmless and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicant's Debenture and
of the ownership thereof. The Trustee may authenticate any such substituted
Debenture and make available for delivery the same upon the written order of the
Company. Upon the issuance of any substituted Debenture, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. In case any Debenture
which has matured or is about to mature or has been called for redemption shall
become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Debenture, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Debenture) if the
applicant for such payment shall furnish to the Company and to the Trustee such
security or indemnity as they may require to save them harmless and, in case of
destruction, loss or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Debenture and of the ownership
thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.08. All Debentures surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if surrendered to the
Company or any paying agent, be delivered to the Trustee for cancellation, or,
if surrendered to the Trustee, shall be canceled by it, and no Debentures shall
be issued in lieu thereof except as expressly required or permitted by any of
the provisions of this Indenture. On request of the Company, the Trustee shall
deliver to the Company canceled Debentures held by the Trustee. In the absence
of such request the Trustee may dispose of canceled Debentures in accordance
with its standard procedures. If the Company shall otherwise acquire any of the
Debentures, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Debentures unless and until
the same are delivered to the Trustee for cancellation.
SECTION 2.09. Nothing in this Indenture or in the Debentures, express
or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and the holders of the Debentures,
any legal or equitable right, remedy or claim under or in respect of this
Indenture, or under any covenant, condition or provision herein contained; all
such covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Debentures.
SECTION 2.10. So long as any of the Debentures of any series remain
outstanding there may be an Authenticating Agent for any or all such series of
Debentures which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Debentures of such series issued upon exchange, transfer or partial
redemption thereof, and Debentures so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. All references in this Indenture to
the authentication of Debentures of any series by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series except for
authentication upon original issuance or pursuant to Section 2.07 hereof. Each
Authenticating Agent shall be acceptable to the Company and shall be a
corporation which has a combined capital and surplus, as most recently reported
or determined by it, of $50 million, and which is otherwise authorized under
such laws to conduct a trust business and is subject to supervision or
examination by federal or state authorities. If at any time any Authenticating
Agent shall cease to be eligible in accordance with these provisions, it shall
resign immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. (a) If the Company shall establish pursuant to Section
2.01 that the Debentures of a particular series are to be issued as a Global
Debenture, then the Company shall execute and the Trustee shall, in accordance
with Section 2.04, authenticate and make available for delivery, a Global
Debenture which (i) shall represent, and shall be denominated in an amount equal
to the aggregate principal amount of, all of the Outstanding Debentures of that
series, (ii) shall be registered in the name of the Depositary or its nominee,
(iii) shall be made available for delivery by the Trustee to the Depositary or
pursuant to the Depositary's instruction and (iv) shall bear a legend
substantially to the following effect: "Except as otherwise provided in Section
2.11 of the Indenture, this Debenture may be transferred, in whole but not in
part, only to another nominee of the Depositary or to a successor Depositary or
to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05 and except as set
forth in Section 2.11(c) or (d), the Global Debenture of a series may be
transferred, in whole but not in part and in the manner provided in Section
2.05, only to another nominee of the Depositary for that series, a successor
Depositary for that series selected or approved by the Company or a nominee of
that successor Depositary.
(c) (i) Subject to the terms established in one or
more indentures supplemental to this Indenture,
an interest in any Global Debenture shall be
exchangeable at the option of the beneficial
owner of such interest in such Global Debenture
for a definitive Debenture or Debentures
registered in the name of any holder other than
the Depositary or its nominee at any time
following issuance of such Global Debenture.
(ii) A beneficial owner of an interest in any Global Debenture
desiring to exchange such beneficial interest for a definitive
Debenture or Debentures shall instruct the Depositary, through
the Depositary's direct or indirect participants or otherwise, to
request such exchange on such beneficial owner's behalf and to
provide a written order containing registration instructions to
the Trustee. Upon receipt by the Trustee of electronic or written
instructions from the Depositary on behalf of such beneficial
owner, the Trustee shall cause, in accordance with the standing
instructions and procedures existing between the Trustee and the
Depositary, the aggregate principal amount of such Global
Debenture to be reduced by the principal amount of such
beneficial interest so exchanged and shall appropriately reflect
such reduction of the aggregate principal amount of this Global
Debenture as described in paragraph (iii) of this Section
2.11(c). Following such reduction, the Trustee shall authenticate
and make available for delivery to such beneficial owner of the
transferee, as the case may be, a definitive Debenture or
Debentures previously executed by the Company as described in
Section 2.05(a) and registered in such names and authorized
denominations as the Depositary, pursuant to such instructions of
the beneficial owner, shall instruct the Trustee.
(iii) Upon any exchange of a portion of any Global Debenture for
a definitive Debenture or Debentures, the Debenture Registrar
shall reflect the reduction of the principal amount of such
Global Debenture by the principal amount of such beneficial
interest so exchanged on the Debenture Register. Until exchanged
in full for definitive Debentures, such Global Debenture shall in
all respects be entitled to the same benefits under the Indenture
as the definitive Debentures authenticated and delivered
hereunder.
(d) (i) Subject to the terms established in one or
more indentures supplemental to this Indenture,
if and so long as the Debentures of any series
are issued as a Global Debenture, any definitive
Debenture or Debentures of such series shall be
exchangeable at the option of the registered
holder thereof for a beneficial interest in such
Global Debenture at any time following the
exchange of such Global Debenture for such
definitive Debenture or Debentures pursuant to
Section 2.11(c).
(ii) A registered holder of a definitive Debenture or Debentures
desiring to exchange such definitive Debenture or Debentures for
a beneficial interest in such Global Debenture shall instruct the
Depositary, through the Depositary's direct or indirect
participants or otherwise, to request such exchange on such
registered holder's behalf and to provide a written order
containing registration instructions to the Trustee. Upon receipt
by the Trustee of electronic or written instructions from the
Depositary, and upon presentation to the Trustee of such
definitive Debenture or Debentures, the Trustee shall cause, in
accordance with the standing instructions and procedures existing
between the Trustee and the Depositary, the aggregate principal
amount of such Global Debenture to be increased by the principal
amount of such definitive Debenture or Debentures so exchanged
and shall appropriately reflect such increase of the aggregate
principal amount of the Global Debenture as described in
paragraph (iii) of this Section 2.11(d).
(iii) Upon any exchange of a definitive Debenture or Debentures
for a beneficial interest in such Global Debenture, the Debenture
Registrar shall reflect the increase of the principal amount of
such Global Debenture by the principal amount of such definitive
Debenture or Debentures so exchanged on the Debenture Register.
(e) If at any time the Depositary for a series of Debentures notifies
the Company that it is unwilling or unable to continue as Depositary for that
series or if at any time the Depositary for that series shall no longer be
registered or in good standing under the Exchange Act or other applicable
statute or regulation and a successor Depositary for that series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer apply to the Debentures of that series and the Company will execute
and, subject to Section 2.05, the Trustee will authenticate and make available
for delivery Debentures of that series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debenture of that series in exchange for
such Global Debenture. In addition, the Company may at any time determine that
the Debentures of any series shall no longer be represented by a Global
Debenture and that the provisions of this Section 2.11 shall no longer apply to
the Debentures of that series. In that event the Company will execute and,
subject to Section 2.05, the Trustee, upon receipt of an Officer's Certificate
evidencing such determination by the Company, will authenticate and make
available for delivery Debentures of that series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debenture of such series in
exchange for such Global Debenture. Upon the exchange of the Global Debenture
for such Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debenture shall be canceled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debenture pursuant to this Section 2.11(e) shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Debenture Registrar. The Trustee shall make available for delivery such
Debentures to the Depositary for delivery to the persons in whose names such
Debentures are so registered.
SECTION 2.12. If specified as contemplated by Section 2.01 with
respect to the Debentures of a particular series, the Company shall have the
right to shorten the maturity of the principal of the Debentures of such series
at any time to any date, PROVIDED that, if the Company elects to exercise its
right to shorten the maturity of the principal of the Debentures of such series,
at the time such election is made and at the time of such shortening, such
conditions as may be specified in such Debentures shall have been satisfied.
SECTION 2.13. The Company in issuing the Debentures may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Debentures or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE THREE
Redemption of Debentures and Sinking Fund Provisions
SECTION 3.01. The Company may redeem the Debentures of any series
issued hereunder on and after the dates and in accordance with the terms
established for that series pursuant to Section 2.01 hereof.
SECTION 3.02. (a) In case the Company shall desire to exercise such
right to redeem all or, as the case may be, a portion of the Debentures of any
series in accordance with the right reserved so to do, it shall give notice of
such redemption to holders of the Debentures of the series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than
30 days and not more than 60 days before the date fixed for redemption of that
series to such holders at their last addresses as they shall appear upon the
Debenture Register. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly to give such
notice to the holder of any Debenture of any series designated for redemption in
whole or in part, or any defect in the notice, shall not affect the validity of
the proceedings for the redemption of any other Debentures of that series or any
other series. In the case of any redemption of Debentures prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officer's Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall specify the CUSIP number, if any,
of Debentures being redeemed, the date fixed for redemption and the redemption
price at which Debentures of that series are to be redeemed, and shall state
that payment of the redemption price of the Debentures to be redeemed will be
made at the office or agency of the Company in the Borough of Manhattan, the
City and State of New York, upon presentation and surrender of such Debentures,
that interest accrued to the date fixed for redemption will be paid as specified
in that notice, that from and after that date interest will cease to accrue, and
that the redemption is for a sinking fund, if such is the case. If less than all
the Debentures of a series are to be redeemed, the notice to the holders of
Debentures of that series to be redeemed shall specify the particular Debentures
to be so redeemed. In case any Debenture is to be redeemed in part only, the
notice which relates to such Debenture shall state the portion of the principal
amount thereof to be redeemed, and shall state that on and after the redemption
date, upon surrender of such Debenture, a new Debenture or Debentures of that
series in principal amount equal to the unredeemed portion thereof will be
issued.
(b) The Company shall give the Trustee at least 45 days' advance
notice of the date fixed for redemption (unless shorter notice shall be required
by the Trustee) as to the aggregate principal amount of Debentures of the series
to be redeemed, and if less than the entire aggregate principal amount of such
series is to be redeemed, thereupon the Trustee shall select, by lot or in such
other manner as it shall deem appropriate and fair in its discretion and which
may provide for the selection of a portion or portions (equal to $25 or any
integral multiple thereof) of the principal amount of such Debentures of a
denomination larger than $25, the Debentures to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the Debentures to be
redeemed.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or General Manager, instruct
the Trustee or any paying agent to call all or any part of the Debentures of a
particular series for redemption and to give notice of redemption in the manner
set forth in this Section, such notice to be in the name of the Company or its
own name as the Trustee or such paying agent may deem advisable. In any case in
which notice of redemption is to be given by the Trustee or any such paying
agent, the Company shall deliver or cause to be delivered to, or permit to
remain with, the Trustee or such paying agent, as the case may be, such
Debenture Register, transfer books or other records, or suitable copies or
extracts therefrom, sufficient to enable the Trustee or such paying agent to
give any notice by mail that may be required under the provisions of this
Section.
SECTION 3.03. (a) If the giving of notice of redemption shall have
been completed as above provided, the Debentures or portions of Debentures of
the series to be redeemed specified in such notice shall become due and payable
on the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and
interest on such Debentures or portions of Debentures shall cease to accrue on
and after the date fixed for redemption, unless the Company shall default in the
payment of such redemption price and accrued interest with respect to any such
Debenture or portion thereof. On presentation and surrender of such Debentures
on or after the date fixed for redemption at the place of payment specified in
the notice, such Debentures shall be paid and redeemed at the applicable
redemption price for such series, together with interest accrued thereon to the
date fixed for redemption (but if the date fixed for redemption is an interest
payment date, the interest installment payable on such date shall be payable to
the registered holder at the close of business on the applicable record date
pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is to be
redeemed in part only, the Company shall execute, the Trustee shall authenticate
and the office or agency where the Debenture is presented shall make available
for delivery to the holder thereof, at the expense of the Company, a new
Debenture or Debentures of the same series, of authorized denominations in
principal amount equal to the unredeemed portion of the Debenture so presented.
Section 3.04. The provisions of Sections 3.04, 3.05 and 3.06 shall
apply to any sinking fund for the retirement of Debentures of a series, except
as otherwise specified as contemplated by Section 2.01 for Debentures of that
series.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Debentures of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Debentures of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 3.05. Each sinking fund payment shall be applied to the
redemption of Debentures of any series as provided for by the terms of
Debentures of that series.
SECTION 3.05. The Company (i) may deliver Outstanding Debentures of a
series (other than any previously called for redemption) and (ii) may apply as a
credit Debentures of a series which have been redeemed either at the election of
the Company pursuant to the terms of such Debentures or through the application
of permitted optional sinking fund payments pursuant to the terms of such
Debentures, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Debentures of such series required to be made
pursuant to the terms of such Debentures as provided for by the terms of that
series; provided that such Debentures have not been previously so credited. Such
Debentures shall be received and credited for such purpose by the Trustee at the
redemption price specified in such Debentures for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 3.06. Not less than 45 days prior to each sinking fund payment
date for any series of Debentures, the Company will deliver to the Trustee an
Officer's Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by delivering and crediting Debentures
of that series pursuant to Section 3.05 and the basis for such credit and will,
together with such Officer's Certificate, deliver to the Trustee any Debentures
to be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Debentures to be redeemed upon such sinking
fund payment date in the manner specified in Section 3.02 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 3.02. Such notice having been duly
given, the redemption of such Debentures shall be made upon the terms and in the
manner stated in Section 3.03.
ARTICLE FOUR
Particular Covenants of the Company
The Company covenants and agrees for each series of the Debentures as
follows:
SECTION 4.01. The Company will duly and punctually pay or cause to be
paid the principal of (and premium, if any) and interest on the Debentures
(subject to the Company's right to extend or defer an Interest Payment Date) of
that series at the time and place and in the manner provided herein and
established with respect to such Debentures.
SECTION 4.02. So long as any series of the Debentures remains
outstanding, the Company agrees to maintain an office or agency in the Borough
of Manhattan, the City and State of New York (which, unless changed, shall be a
corporate trust office or agency of the Trustee), with respect to each such
series and at such other location or locations as may be designated as provided
in this Section 4.02, where (i) Debentures of that series may be presented for
payment, (ii) Debentures of that series may be presented as hereinabove
authorized for registration of transfer and exchange and (iii) notices and
demands to or upon the Company in respect of the Debentures of that series and
this Indenture may be given or served, such designation to continue with respect
to such office or agency until the Company shall, by written notice signed by
its President or General Manager and delivered to the Trustee, designate some
other office or agency for such purposes or any of them. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, notices and demands.
SECTION 4.03. (a) If the Company shall appoint one or more paying
agents, other than the Trustee, for all or any series of the Debentures, the
Company will cause each such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section, that it will:
(1) hold all sums held by it as such agent for the payment of the
principal of (and premium, if any) or interest on the Debentures of that
series (whether such sums have been paid to it by the Company or by any
other obligor of such Debentures) in trust for the benefit of the persons
entitled thereto;
(2) give the Trustee notice of any failure by the Company (or by any
other obligor of such Debentures) to make any payment of the principal of
(and premium, if any) or interest on the Debentures of that series when the
same shall be due and payable;
(3) at any time during the continuance of any failure referred to in
the preceding paragraph (a)(2) above, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such
paying agent; and
(4) perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
any series of the Debentures, it will, on or before each due date of the
principal of (and premium, if any) or interest on Debentures of that series, set
aside, segregate and hold in trust for the benefit of the persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or interest
so becoming due on Debentures of that series until such sums shall be paid to
such persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure (by it or any other obligor on
such Debentures) to take such action. Whenever the Company shall have one or
more paying agents for any series of Debentures, it will, prior to each due date
of the principal of (and premium, if any) or interest on any Debentures of that
series, deposit with the paying agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.06 and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such sums.
SECTION 4.04. The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner provided in
Section 7.10, a Trustee, so that there shall at all times be a Trustee
hereunder.
SECTION 4.05. The Company will not, while any of the Debentures remain
outstanding, consolidate with, merge into, merge into itself or sell or convey
all or substantially all of its property to any other company, unless the
provisions of Article Ten hereof are complied with.
SECTION 4.06. If there shall have occurred any event that would, with
the giving of notice or the passage of time, or both, constitute an Event of
Default under the Indenture, or the Company shall have given notice of its
selection of an extended interest payment period as provided in the Indenture
and such period, or any extension thereof, shall be continuing, the Company will
not, until all defaulted interest on the Debentures and all interest accrued on
the Debentures during an extended interest payment period and all principal and
premium, if any, then due and payable on the Debentures shall have been paid in
full, (i) declare, set aside or pay any dividend or distribution on any capital
stock of the Company, except for dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, or (ii)
repurchase, redeem or otherwise acquire, or make any sinking fund payment for
the purchase or redemption of, any shares of its capital stock (except by
conversion into or exchange for shares of its capital stock and except for a
redemption, purchase or other acquisition of shares of its capital stock made
for the purpose of an employee incentive plan or benefit plan of the Company or
any of its subsidiaries, if any, and except for mandatory redemption or sinking
fund payments with respect to any series of preferred stock of the Company that
are subject to mandatory redemption or sinking fund requirements, provided that
the aggregate stated value of all such series outstanding at the time of any
such payment does not exceed five percent of the aggregate of (1) the total
principal amount of all bonds or other securities representing secured
indebtedness issued or assumed by the Company and then outstanding and (2) the
capital and surplus of the Company to be stated on the books of account of the
Company after giving effect to such payment); provided, however, that any moneys
deposited in any sinking fund and not in violation of this provision may
thereafter be applied to the purchase or redemption of such preferred stock in
accordance with the terms of such sinking fund without regard to the
restrictions contained in this Section.
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company
and the Trustee
SECTION 5.01. The Company will furnish or cause to be furnished to the
Trustee (a) on a quarterly basis on each regular record date (as defined in
Section 2.03) a list, in such form as the Trustee may reasonably require, of the
names and addresses of the holders of each series of Debentures as of such
regular record date; provided that the Company shall not be obligated to furnish
or cause to furnish such list at any time that the list shall not differ in any
respect from the most recent list furnished to the Trustee by the Company and
(b) at such other times as the Trustee may request in writing within 30 days
after the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is
furnished; provided, however, no such list need be furnished for any series for
which the Trustee shall be the Debenture Registrar.
SECTION 5.02. (a) The Trustee shall preserve, in as current a form as
is reasonably practicable, all information as to the names and addresses of the
holders of Debentures contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Debentures received by the Trustee in its capacity as Debenture Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Debentures of a series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant owns and has
owned a Debenture for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debentures of that series or holders of all
Debentures with respect to their rights under this Indenture or under such
Debentures, and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either:
(1) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of Section
5.02(a); or
(2) inform such applicants as to the approximate number of holders of
Debentures of such series or of all Debentures, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee, in accordance with the provisions of Section 5.02(a), and as to
the approximate cost of mailing to such Debentureholders the form of proxy
or other communication, if any, specified in such application.
(d) If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of that series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of Section 5.02(a), a copy of
the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Securities and Exchange Commission (the
"Commission"), together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of Debentures of that series or
of all Debentures, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise, the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any paying agent nor any Debenture Registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debentures in accordance with the provisions of
Section 5.02(c), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 5.02(c).
SECTION 5.03. (a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then to
file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations. Delivery of such reports, documents and information to the Trustee
under this subsection (b) and Section 5.03(a) is for informational purposes only
and the Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Company's compliance with any of the covenants hereunder
(as to which the Trustee is entitled to rely exclusively on an Officer's
Certificate).
(c) The Company covenants and agrees to transmit by mail, first-class
postage prepaid, or reputable overnight delivery service which provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to Section 5.03(a) and (b) as may be
required by rules and regulations prescribed from time to time by the
Commission.
(d) The Company covenants and agrees to furnish to the Trustee, on or
before ___________ in each calendar year in which any of the Debentures are
outstanding, or on or before such other day in each calendar year as the Company
and the Trustee may from time to time agree upon, a Certificate as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.
(e) The Company covenants and agrees, during any calendar year in
which original issue discount has accrued on Outstanding Debentures, to file
with the Trustee promptly at the end of each such calendar year a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Outstanding Debentures as of the end of such year.
SECTION 5.04. (a) On or before ____________ in each year in which any
of the Debentures are outstanding, the Trustee shall transmit by mail,
first-class postage prepaid, to the Debentureholders, as their names and
addresses appear upon the Debenture Register, a brief report dated as of the
preceding _________, with respect to any of the following events which may have
occurred within the previous 12 months (but if no such event has occurred within
such period no report need be transmitted):
(1) any change to its eligibility under Section 7.09,
and its qualifications under Section 7.08;
(2) the creation of or any material change to a
relationship specified in paragraphs (1) through (10) of
Section 7.08(c);
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Debentures, on any property or funds held or collected
by it as Trustee if such advances so remaining unpaid aggregate more than
1/2 of 1% of the principal amount of the Debentures outstanding on the date
of such report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company, or by any other obligor on the
Debentures, to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except any indebtedness based upon a creditor
relationship arising in any manner described in paragraphs (2), (3), (4) or
(6) of Section 7.13(b);
(5) any change to the property and funds, if any,
physically in the possession of the Trustee as such on the
date of such report;
(6) any release, or release and substitution, of property subject to
the lien, if any, of this Indenture (and the consideration thereof, if any)
which it has not previously reported;
(7) any additional issue of Debentures which the
Trustee has not previously reported; and
(8) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Debentures or the Debentures of any series,
except any action in respect of a default, notice of which has been or is
to be withheld by it in accordance with the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first-class postage prepaid,
to the Debentureholders, as their names and addresses appear upon the Debenture
Register, a brief report with respect to the character and amount of any
advances (and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee as such since the date of the last
report transmitted pursuant to the provisions of subsection (a) of this Section
(or if no such report has yet been so transmitted, since the date of execution
of this Indenture), for the reimbursement of which it claims or may claim a lien
or charge prior to that of the Debentures of any series on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this subsection if such advances remaining unpaid at any time
aggregate more than 10% of the principal amount of Debentures of such series
outstanding at such time, such report to be transmitted within 90 days after
such time.
(c) A copy of each such report shall, at the time of such transmission
to Debentureholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Debentures are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Debentures become
listed on any stock exchange.
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
SECTION 6.01. (a) Whenever used herein with respect to Debentures of a
particular series, "Event of Default" means any one or more of the following
events which has occurred and is continuing:
(1) default in the payment of any installment of interest upon any of
the Debentures of that series, as and when the same shall become due and
payable, and continuance of such default for a period of 60 days (subject
to the Company's right, if any, to extend or defer an Interest Payment Date
pursuant to Section 2.01 hereof);
(2) default in the payment of the principal of (or premium, if any,
on) any of the Debentures of that series as and when the same shall become
due and payable, whether at maturity, upon redemption, by declaration or
otherwise, or in any payment required by any sinking or analogous fund
established with respect to that series, and continuance of such default
for a period of 3 days;
(3) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company with
respect to that series contained in such Debentures or otherwise
established with respect to that series of Debentures pursuant to Section
2.01 hereof or contained in this Indenture (other than a covenant or
agreement which has been expressly included in this Indenture solely for
the benefit of one or more series of Debentures other than such series) for
a period of 90 days after the date on which written notice of such failure,
requiring the same to be remedied and stating that such notice is a "Notice
of Default" hereunder, shall have been given to the Company by the Trustee,
by registered or certified mail, or to the Company and the Trustee by the
holders of at least 33% in principal amount of the Debentures of that
series at the time outstanding;
(4) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of the Company under the Federal Bankruptcy Code or any
other similar applicable federal or state law, and such decree or order
shall have continued unvacated and unstayed for a period of 90 days; an
involuntary case shall be commenced under such Code in respect of the
Company and shall continue undismissed for a period of 90 days or an order
for relief in such case shall have been entered; or a decree or order of a
court having jurisdiction in the premises shall have been entered for the
appointment on the ground of insolvency or bankruptcy of a receiver,
custodian, liquidator, trustee or assignee in bankruptcy or insolvency of
the Company or of its property, or for the winding up or liquidation of its
affairs, and such decree or order shall have remained in force unvacated
and unstayed for a period of 90 days; or
(5) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, shall consent to the filing of a bankruptcy proceeding
against it, shall file a petition or answer or consent seeking liquidation
or reorganization under the Federal Bankruptcy Code or other similar
applicable federal or state law, shall consent to the filing of any such
petition or shall consent to the appointment on the ground of insolvency or
bankruptcy of a receiver or custodian or liquidator or trustee or assignee
in bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors.
(b) In each and every such case, the Company shall file with the
Trustee written notice of the occurrence of any Event of Default within five
Business Days of the Company's becoming aware of any such Event of Default, and
unless the principal of all the Debentures of that series shall have already
become due and payable, either the Trustee or the holders of not less than 33%
in aggregate principal amount of the Debentures of that series then outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Debentureholders), may declare the principal of all the Debentures of that
series to be due and payable immediately, and upon any such declaration the same
shall become and shall be immediately due and payable, anything contained in
this Indenture or in the Debentures of that series or established with respect
to that series pursuant to Section 2.01 hereof to the contrary notwithstanding.
(c) The provisions of subsection (b) of this Section, however, are
subject to the condition that if, at any time after the principal of the
Debentures of that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Debentures of that series and the principal of (and
premium, if any, on) any and all Debentures of that series which shall have
become due otherwise than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that such payment is enforceable under
applicable law, upon overdue installments of interest, at the rate per annum
expressed in the Debentures of that series to the date of such payment or
deposit) and the amount payable to the Trustee under Section 7.06, and any and
all defaults under the Indenture, other than the nonpayment of principal on
Debentures of that series which shall not have become due by their terms, shall
have been remedied or, alternatively, waived as provided in Section 6.06, then
and in every such case the Event or Events of Default giving rise to the
declaration of acceleration will, without further act, be deemed to have been
rescinded and annulled; but no such rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair any right consequent
thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of that series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
SECTION 6.02. (a) The Company covenants that (1) in case default shall
be made in the payment of any installment of interest on any of the Debentures
of a series, and such default shall have continued for a period of 60 days, or
(2) in case default shall be made in the payment of the principal of (or
premium, if any, on) any of the Debentures of a series when the same shall have
become due and payable, and such default shall continue for a period of 3 days,
whether upon maturity of the Debentures of a series or upon redemption or upon
declaration or otherwise, or in any payment required by any sinking or analogous
fund established with respect to that series as and when the same shall have
become due and payable, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Debentures of that series,
the whole amount that then shall have become due and payable on all such
Debentures for principal (and premium, if any) or interest, or both, as the case
may be, with interest upon the overdue principal (and premium, if any) and (to
the extent that payment of such interest is enforceable under applicable law)
upon overdue installments of interest at the rate per annum expressed in the
Debentures of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under Section 7.06.
(b) In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or
in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or other obligor upon the
Debentures of that series and collect in the manner provided by law out of the
property of the Company or other obligor upon the Debentures of that series
wherever situated the moneys adjudged or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or other judicial
proceedings affecting the Company, any other obligor on such Debentures or the
creditors or property of either, the Trustee shall have power to intervene in
such proceedings and take any action therein that may be permitted by the court
and shall (except as may be otherwise provided by law) be entitled to file such
proofs of claim and other papers and documents as may be necessary or advisable
in order to have the claims of the Trustee and of the holders of Debentures of
such series allowed for the entire amount due and payable by the Company or such
other obligor under the Indenture at the date of institution of such proceedings
and for any additional amount which may become due and payable by the Company or
such other obligor after such date, and to collect and receive any moneys or
other property payable or deliverable on any such claim, and to distribute the
same after the deduction of the amount payable to the Trustee under Section
7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the holders of Debentures of that series to make
such payments to the Trustee, and, in the event that the Trustee shall consent
to the making of such payments directly to such Debentureholders, to pay to the
Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture,
or under any of the terms established with respect to Debentures of that series,
may be enforced by the Trustee without the possession of any of such Debentures,
or the production thereof at any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall,
after provision for payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Debentures of that
series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law, in
equity, in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in the Indenture or in aid of the exercise of
any power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize, consent to, accept or adopt on behalf of any Debentureholder any plan
of reorganization, arrangement, adjustment or composition affecting the
Debentures of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Debentureholder in any such
proceeding.
SECTION 6.03. Any moneys collected by the Trustee pursuant to Section
6.02 with respect to a particular series of Debentures shall be applied in the
order following, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the several Debentures of that series, and
stamping thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses of
collection and of all amounts payable to the Trustee
under Section 7.06;
SECOND: To the payment of the amounts then due and unpaid upon
Debentures of that series for principal (and premium, if any) and interest,
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Debentures for principal (and
premium, if any) and interest, respectively; and
THIRD: To the Company.
SECTION 6.04. No holder of any Debenture of any series shall have any
right by virtue or by availing of any provision of this Indenture to institute
any suit, action or proceeding in equity or at law upon or under or with respect
to this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof
with respect to Debentures of that series specifying such Event of Default, as
hereinbefore provided, and unless also the holders of not less than 33% in
aggregate principal amount of the Debentures of such series then outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
failed to institute any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by the taker and holder of every
Debenture of that series with every other such taker and holder and the Trustee,
that no one or more holders of Debentures of that series shall have any right in
any manner whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any other
of such Debentures, or to obtain or seek to obtain priority over or preference
to any other such holder, or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and common benefit of
all holders of Debentures of that series. For the protection and enforcement of
the provisions of this Section, each and every Debentureholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provisions of this Indenture, however, the
right of any holder of any Debenture to receive payment of the principal of (and
premium, if any) and interest on such Debenture, as therein provided, on or
after the respective due dates expressed in such Debenture (or in the case of
redemption, on the redemption date), or to institute suit for the enforcement of
any such payment on or after such respective dates or redemption date, shall not
be impaired or affected without the consent of such holder.
SECTION 6.05. (a) All powers and remedies given by this Article to the
Trustee or to the Debentureholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any others thereof or of any other powers
and remedies available to the Trustee or the holders of the Debentures, by
judicial proceedings or otherwise, to enforce the performance or observance of
the covenants and agreements contained in this Indenture or otherwise
established with respect to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed as a waiver of any such default or an acquiescence therein;
and, subject to the provisions of Section 6.04, every power and remedy given by
this Article or by law to the Trustee or to the Debentureholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Debentureholders.
SECTION 6.06. The holders of a majority in aggregate principal amount
of the Debentures of any series at the time outstanding, determined in
accordance with Section 8.04, shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee with respect to that
series; provided, however, that such direction shall not be in conflict with any
rule of law or with this Indenture or unduly prejudicial to the rights of
holders of Debentures of any other series at the time outstanding determined in
accordance with Section 8.04 not parties thereto. Subject to the provisions of
Section 7.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed might involve
the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Debentures of each series at the time outstanding
affected thereby, determined in accordance with Section 8.04, may on behalf of
the holders of all of the Debentures of that series waive any past default in
the performance of any of the covenants contained herein or established pursuant
to Section 2.01 with respect to that series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest on,
any of the Debentures of that series as and when the same shall become due by
the terms of such Debentures or a call for redemption of Debentures of that
series, which default may be waived by the unanimous consent of the holders of
that series so affected. Upon any such waiver, the default covered thereby shall
be deemed to be cured for all purposes of this Indenture and the Company, the
Trustee and the holders of the Debentures of that series shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 6.07. The Trustee shall, within 90 days after the occurrence
of a default with respect to a particular series, transmit by mail, first class
postage prepaid, to the holders of Debentures of that series, as their names and
addresses appear upon the Debenture Register, notice of all defaults with
respect to that series known to the Trustee, unless such defaults shall have
been cured or waived before the giving of such notice (the term "defaults" for
the purposes of this Section being hereby defined to be the events specified in
subsections (1), (2), (3), (4) and (5) of Section 6.01(a), not including any
grace periods provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided, that, except in
the case of default in the payment of the principal of (or premium, if any) or
interest on any of the Debentures of that series or in the payment of any
sinking fund installment established with respect to that series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the holders of Debentures of that series;
provided further, that in the case of any default of the character specified in
Section 6.01(a)(3) with respect to Debentures of that series, no such notice to
the holders of the Debentures of that series shall be given until at least 30
days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any default,
except (i) a default under Section 6.01(a)(1) or (a)(2) as long as the Trustee
is acting as paying agent for such series of Debentures or (ii) any default as
to which the Trustee shall have received written notice or a Responsible Officer
charged with the administration of this Indenture shall have actual knowledge or
obtained written notice.
SECTION 6.08. All parties to this Indenture agree, and each holder of
any Debentures by his or her acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee, any suit instituted by any Debentureholder, or group of
Debentureholders, holding more than 10% in aggregate principal amount of the
outstanding Debentures of any series, or any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture of such series, on or after the
respective due dates expressed in such Debenture or established pursuant to this
Indenture.
ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. (a) The Trustee, prior to the occurrence of an Event of
Default with respect to Debentures of a series and after the curing of all
Events of Default with respect to Debentures of that series which may have
occurred, shall undertake to perform with respect to Debentures of that series
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to Debentures of a series
has occurred (which has not been cured or waived), the Trustee shall exercise
with respect to Debentures of that series such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent individual would exercise or use under the circumstances
in the conduct of his or her own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect to
Debentures of a series and after the curing and waiving of all such Events
of Default with respect to that series which may have occurred:
(i) the duties and obligations of the Trustee shall with respect
to Debentures of that series be determined solely by the express provisions
of this Indenture, and the Trustee shall not be liable with respect to
Debentures of that series except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to Debentures of that series conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture (but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated therein);
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount of the
Debentures of any series at the time outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee
under this Indenture with respect to the Debentures of that series; and
(4) none of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur or risk
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if there is reasonable ground
for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Indenture or adequate
indemnity against such risk is not reasonably assured to it.
(c) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01.
SECTION 7.02. Except as otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by the President or General Manager, the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer
(unless other evidence in respect thereof is specifically prescribed herein);
(c) Whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) is entitled to receive and may, in the
absence of bad faith on its part, rely upon an Officer's Certificate;
(d) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted hereunder in good faith and in reliance thereon;
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing herein contained shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to a series of the Debentures (which has not been cured
or waived) to exercise with respect to Debentures of that series such of the
rights and powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(f) If an Event of Default shall have occurred and be continuing, the
Trustee shall be under no obligation to follow any request, order or direction
of the Company if in the reasonable judgment of the Trustee the following of
such request, order or direction would not be in the best interests of all the
holders;
(g) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(h) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security, or
other papers or documents, unless requested in writing to do so by the holders
of not less than a majority in principal amount of the outstanding Debentures of
the particular series affected thereby (determined as provided in Section 8.04);
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Company or, if paid by the Trustee, shall
be repaid by the Company upon demand;
(i) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(j) Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action or omission of the
Trustee in accordance with a proposal included in such application on or after
the date specified in such application (which date shall not be less than three
Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
SECTION 7.03. (a) The recitals contained herein and in the Debentures
(other than the Certificate of Authentication on the Debentures) shall be taken
as the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same.
(b) The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Debentures or of the proceeds of the Debentures, or
for the use or application of any moneys paid over by the Trustee in accordance
with any provision of this Indenture or established pursuant to Section 2.01, or
for the use or application of any moneys received by any paying agent other than
the Trustee.
SECTION 7.04. The Trustee or any paying agent or Debenture Registrar,
in its individual or any other capacity, may become the owner or pledgee of
Debentures with the same rights it would have if it were not Trustee, paying
agent or Debenture Registrar.
SECTION 7.05. Subject to the provisions of Section 11.06, all moneys
received by the Trustee shall, until used or applied as herein provided, be held
in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
SECTION 7.06. (a) The Company covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to, such
compensation as the Company and the Trustee may agree upon in writing (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
the Trustee (and its officers, agents, directors and employees) for, and to hold
it harmless against, any loss, damage, claim, liability or expense including
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee) incurred without negligence or bad faith on the part of the Trustee
and arising out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending itself against any
claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the termination of this Indenture. Such additional
indebtedness shall be a senior lien to that of the Debentures upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Debentures, and the Debentures are
hereby subordinated to each such senior lien.
(c) When the Trustee incurs expenses or renders services in connection
with an Event of Default, the expenses (including the reasonable charges and
expenses of its counsel) and compensation for its services are intended to
constitute expenses of administration under applicable federal or state
bankruptcy, insolvency or similar law.
SECTION 7.07. Except as otherwise provided in Section 7.01, whenever
in the administration of the provisions of this Indenture the Trustee shall deem
it necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting to take any action hereunder, it shall be entitled to
receive, and such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively provided and established by an
Officer's Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to be taken by
it under the provisions of this Indenture upon the faith thereof.
SECTION 7.08. If the Trustee has acquired or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.
SECTION 7.09. There shall at all times be a Trustee with respect to
the Debentures issued hereunder which shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any State or Territory thereof or of the District of Columbia, or a corporation
or other person permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million dollars, and subject to supervision or
examination by Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. The Company may not, nor
may any person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.
SECTION 7.10. (a) The Trustee or any successor hereafter appointed may
at any time resign with respect to the Debentures of one or more series by
giving written notice thereof to the Company and by transmitting notice of
resignation by mail, first-class postage prepaid, to the Debentureholders of
that series, as their names and addresses appear upon the Debenture Register.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee with respect to Debentures of that series by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect to
Debentures of that series, or any Debentureholder of that series who has been a
bona fide holder of a Debenture or Debentures for at least six months may,
subject to the provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall
occur:
(1) the Trustee shall fail to comply with the provisions of Section
7.08 after written request therefor by the Company or by any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, shall be adjudged a
bankrupt or insolvent, a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Company may remove the Trustee with respect to all
Debentures and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 6.08, unless the Trustee's duty to
resign is stayed as provided herein, any Debentureholder who has been a bona
fide holder of a Debenture or Debentures for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures of any series at the time outstanding may at any time remove the
Trustee with respect to that series and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures of a series pursuant to any of
the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debentures of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
SECTION 7.11. (a) In case of the appointment hereunder of a successor
trustee with respect to all Debentures, every such successor trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights, powers, and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
trustee all property and money held by such retiring Trustee hereunder, subject
to any prior lien provided for in Section 7.06(b).
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debentures of one or more (but not all) series, the Company, the
retiring Trustee and each successor trustee with respect to the Debentures of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and which shall (1)
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debentures of that
or those series to which the appointment of such successor trustee relates, (2)
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Debentures of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee and
(3) add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust, that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; and upon the
execution and delivery of such supplemental indenture the resignation or removal
of the retiring Trustee shall become effective to the extent provided therein,
such retiring Trustee shall with respect to the Debentures of that or those
series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, and each such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of that or those series
to which the appointment of such successor trustee relates; but, on request of
the Company or any successor trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Debentures of that or those series to
which the appointment of such successor trustee relates.
(c) Upon request of any such successor trustee or retiring Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and eligible
under this Article.
(e) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first-class postage prepaid, to the Debentureholders,
as their names and addresses appear upon the Debenture Register. If the Company
fails to transmit such notice within 10 days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
SECTION 7.12. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case any
Debentures shall have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Debentures
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Debentures.
SECTION 7.13. If and when the Trustee shall become a creditor of the
Company (or any other obligor upon the Debentures), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any other obligor upon the Debentures).
ARTICLE EIGHT
Concerning the Debentureholders
SECTION 8.01. Whenever in this Indenture it is provided that the
holders of a majority or specified percentage in aggregate principal amount of
the Debentures of a particular series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such action
the holders of such majority or specified percentage of that series have joined
therein may be evidenced by any instrument or any number of instruments of
similar tenor executed by such holders of Debentures of that series in person or
by agent or proxy appointed in writing.
If the Company shall solicit from the Debentureholders of any series
any request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officer's
Certificate, fix in advance a record date for that series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 8.02. Subject to the provisions of Section 7.01, proof of the
execution of any instrument by a Debentureholder (such proof will not require
notarization) or his, her or its agent or proxy and proof of the holding by any
person of any of the Debentures shall be sufficient if made in the following
manner:
(a) the fact and date of the execution by any such
person of any instrument may be proved in any reasonable
manner acceptable to the Trustee;
(b) the ownership of Debentures shall be proved by
the Debenture Register of such Debentures or by a
certificate of the Debenture Registrar thereof; or
(c) the Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03. Prior to the due presentment for registration of
transfer of any Debenture, the Company, the Trustee, any paying agent and any
Debenture Registrar may deem and treat the person in whose name such Debenture
shall be registered upon the books of the Company as the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notice of ownership or writing thereon made by anyone other than the
Debenture Registrar) for the purpose of receiving payment of or on account of
the principal of and premium, if any, and (subject to Section 2.03) interest on
such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be affected by
any notice to the contrary.
SECTION 8.04. At any time the Debentures are held by any holder other
than PSO Capital [I], a Delaware statutory business trust, in determining
whether the holders of the requisite aggregate principal amount of Debentures of
a particular series have concurred in any direction, consent or waiver under
this Indenture, Debentures of that series which are owned by the Company or any
other obligor on the Debentures of that series or by any person directly or
indirectly controlling or controlled by or under common control with the Company
or any other obligor on the Debentures of that series shall be disregarded and
deemed not to be outstanding for the purpose of any such determination, except
that for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver, only Debentures of such series
which the Trustee actually knows are so owned shall be so disregarded.
Debentures so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section, if the pledgee shall establish to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Debentures and that the pledgee is not a person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other obligor. In case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
SECTION 8.05. At any time prior to (but not after) the evidencing to
the Trustee, as provided in Section 8.01, of the taking of any action by the
holders of the majority or percentage in aggregate principal amount of the
Debentures of a particular series specified in this Indenture in connection with
such action, any holder of a Debenture of that series which is shown by the
evidence to be included in the Debentures the holders of which have consented to
such action may, by filing written notice with the Trustee, and upon proof of
holding as provided in Section 8.02, revoke such action so far as concerns such
Debenture. Except as aforesaid, any such action taken by the holder of any
Debenture shall be conclusive and binding upon such holder and upon all future
holders and owners of such Debenture, and of any Debenture issued in exchange
therefor, on registration of transfer thereof or in place thereof, irrespective
of whether or not any notation in regard thereto is made upon such Debenture.
Any action taken by the holders of the majority or percentage in aggregate
principal amount of the Debentures of a particular series specified in this
Indenture in connection with such action shall be conclusively binding upon the
Company, the Trustee and the holders of all the Debentures of that series.
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. In addition to any supplemental indenture otherwise
authorized by this Indenture, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect), without the consent of
the Debentureholders, for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
contained herein or otherwise established with respect to the Debentures;
(b) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the holders of
the Debentures of all or any series as the Board of Directors and the
Trustee shall consider to be for the protection of the holders of
Debentures of all or any series, and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional
covenants, restrictions, conditions or provisions a default or an Event of
Default with respect to that series permitting the enforcement of all or
any of the several remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant,
restriction, condition or provision, such supplemental indenture may
provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults), may
provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default or may limit the right
of the holders of a majority in aggregate principal amount of the
Debentures of such series to waive such default;
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this indenture as shall not be
inconsistent with the provisions of this Indenture and shall not adversely
affect the interests of the holders of the Debentures of any series; or
(d) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Debenture outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Debentures at the time outstanding, notwithstanding
any of the provisions of Section 9.02.
SECTION 9.02. With the consent (evidenced as provided in Section 8.01)
of the holders of not less than a majority in aggregate principal amount of the
Debentures of each series affected by such supplemental indenture or indentures
at the time outstanding, the Company, when authorized by a Board Resolution, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to, or changing in any manner or eliminating any of the provisions of, this
Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of the Debentures of that series under this Indenture;
provided, however, that no such supplemental indenture shall (i) extend the
Fixed Maturity of any Debentures of any series, reduce the principal amount
thereof, reduce the rate or extend the time of payment of interest thereon or
reduce any premium payable upon the redemption thereof, without the consent of
the holder of each Debenture so affected or (ii) reduce the aforesaid percentage
of Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of each Debenture
then outstanding and affected thereby.
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders of
any series affected thereby under this Section to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first-class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, this Indenture
shall, with respect to that series, be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debentures of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.04. Debentures of any series, affected by a supplemental
indenture, authenticated and delivered after the execution of such supplemental
indenture pursuant to the provisions of this Article or of Section 10.01, may
bear a notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Debentures of that series so modified as to conform, in the
opinion of the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures of
that series then outstanding.
SECTION 9.05. The Trustee, subject to the provisions of Section 7.01,
is entitled to receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is proper
for the Trustee under the provisions of this Article to join in the execution
thereof.
ARTICLE TEN
Consolidation, Merger and Sale
SECTION 10.01. Nothing contained in this Indenture or in any of the
Debentures shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or other disposition of the property of the Company or its
successor or successors as an entirety, or substantially as an entirety, to any
other corporation (whether or not affiliated with the Company or its successor
or successors) authorized to acquire and operate the same; provided, however,
the Company hereby covenants and agrees that, upon any such consolidation,
merger, sale, conveyance, transfer or other disposition, the due and punctual
payment of the principal of (premium, if any) and interest on all of the
Debentures of all series in accordance with the terms of each series, according
to their tenor, and the due and punctual performance and observance of all the
covenants and conditions of this Indenture with respect to each series or
established with respect to each series pursuant to Section 2.01 to be kept or
performed by the Company, shall be expressly assumed, by supplemental indenture
(which shall conform to the provisions of the Trust Indenture Act as then in
effect) satisfactory in form to the Trustee executed and delivered to the
Trustee by the entity formed by such consolidation, or into which the Company
shall have been merged, or by the entity which shall have acquired such
property.
SECTION 10.02. (a) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Debentures
of all series outstanding and the due and punctual performance of all of the
covenants and conditions of this Indenture or established with respect to each
series of the Debentures pursuant to Section 2.01 to be performed by the Company
with respect to each series, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the party of the first part, and thereupon the predecessor corporation shall
be relieved of all obligations and covenants under this Indenture and the
Debentures, except the provisions of Section 7.06 to the extent such provisions
relate to matters occurring before any such consolidation, merger, sale,
conveyance, transfer or other disposition. Such successor corporation thereupon
may cause to be signed, and may issue either in its own name or in the name of
the Company or any other predecessor obligor on the Debentures, any or all of
the Debentures issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee; and, upon the order of such
successor company, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Debentures which previously shall have been
signed and delivered by the officers of the predecessor Company to the Trustee
for authentication, and any Debentures which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Debentures so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Debentures had been issued at the date of the execution hereof.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition, such changes in phraseology and form (but not in
substance) may be made in the Debentures thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Debentures
shall prevent the Company from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other corporation (whether or
not affiliated with the Company).
SECTION 10.03. The Trustee, subject to the provisions of Section 7.01,
is entitled to receive an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance, transfer or other disposition, and
any such assumption, comply with the provisions of this Article.
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys
SECTION 11.01. This Indenture shall upon Company request cease to be
of further effect (except as hereinafter expressly provided), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) both
(1) all Debentures theretofore authenticated and delivered (other
than Debentures which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.07 have been
delivered to the Trustee for cancellation; and
(2) all Debentures not theretofore delivered to the Trustee for
cancellation shall be deemed to have been paid in accordance with
Section 11.03;
(b) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
In the event there shall be Debentures of two or more series
outstanding hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested to
do so with respect to Debentures of all series as to which it is Trustee and if
the other conditions thereto are met. In the event there shall be two or more
Trustees hereunder, then the effectiveness of each such instrument from each
Trustee hereunder shall be conditioned upon receipt of such instruments from
each other Trustee hereunder.
Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of the Company under Sections 2.05, 2.06, 2.07, 4.02,
4.03 and 7.06 and this Article
Eleven shall survive.
Upon satisfaction and discharge of this Indenture as provided in this
Section, the Trustee shall assign, transfer and turn over to the Company,
subject to the lien provided by Section 7.06, any and all money, securities and
other property then held by the Trustee for the benefit of the holders of the
Debentures other than money and Government Obligations held by the Trustee
pursuant to Section 11.04.
SECTION 11.02. If at any time all such Debentures of a particular
series not heretofore delivered to the Trustee for cancellation or which have
not become due and payable as described in Section 11.01 shall have been paid by
the Company by depositing irrevocably with the Trustee as trust funds moneys or
an amount of Governmental Obligations sufficient to pay at maturity or upon
redemption all such Debentures of that series not theretofore delivered to the
Trustee for cancellation, including principal (and premium, if any) and interest
due or to become due to such date of maturity or date fixed for redemption, as
the case may be, and if the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company with respect to that series, then after
the date such moneys or Governmental Obligations, as the case may be, are
deposited with the Trustee: (a) the Company shall be released from its covenants
and other obligations contained in Sections 4.05, 5.03, 10.01, 10.02, and 10.03
and may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant or obligation, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or obligation or by reason of any reference in any such covenant or
obligation to any other provision of this Indenture or any other document, and
any failure to comply with any such covenant or obligation shall not constitute
a Default or an Event of Default with respect to the Debentures of such series;
(b) the occurrence of any event specified in Section 6.01(a)(3) shall not
constitute a Default or an Event of Default with respect to the Debentures of
such series; (c) the Debentures of such series shall thereafter be deemed not to
be "outstanding" solely for purposes of determining whether the Debentureholders
of the requisite aggregate principal amount of Debentures have concurred in any
act under this Indenture with respect to any covenant or obligation from which
the Company has been released pursuant to (a) above or with respect to any event
that shall have ceased to constitute a Default or Event of Default with respect
to Debentures of such series pursuant to (b) above (or the consequences thereof)
PROVIDED that the provisions of this Section 11.02 shall not be deemed to
relieve the Company of its obligations with respect to the payment of the
principal of (and premium, if any) or interest on the outstanding Debentures of
such series. The release of the Company from its obligations under this
Indenture, as provided for in this Section 11.02, shall be subject to the
further condition that the Company first shall have caused to be delivered to
the Trustee an Opinion of Counsel to the effect that Debentureholders of a
series with respect to which a deposit has been made in accordance with this
Section 11.02 will not realize income, gain or loss for federal income tax
purposes as a result of such deposit and release, and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such deposit and release had not occurred.
SECTION 11.03. If, in addition to satisfying the conditions set forth
in Section 11.01 or 11.02 (except for the requirement of an Opinion of Counsel),
the Company delivers to the Trustee an Opinion of Counsel to the effect that (a)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (b) since the date of this Indenture there has been
a change in applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Debentureholders of a series with respect to which a deposit has been made in
accordance with Section 11.01 or 11.02 will not realize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount, in the
same manner and at the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, and (c) the deposit shall not result
in the Company, the Trustee or the trust being deemed an "investment company"
under the Investment Company Act of 1940, as amended, then, in such event, the
Company will be deemed to have paid and discharged the entire indebtedness on
that series and the holder thereof shall thereafter be entitled to receive
payment solely from the trust fund described above. Notwithstanding the
satisfaction and discharge of any Debentures as aforesaid, the obligations of
the Company in respect of such Debentures under Sections 2.05, 2.06, 2.07, 4.02,
4.03 and 7.06 and this Article Eleven shall survive.
SECTION 11.04. All moneys or Governmental Obligations deposited with
the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall
be available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the
particular series of Debentures for the payment or redemption of which such
moneys or Governmental Obligations have been deposited with the Trustee.
SECTION 11.05. In connection with the satisfaction and discharge of
this Indenture all moneys or Governmental Obligations then held by any paying
agent under the provisions of this Indenture shall, upon demand of the Company,
be paid to the Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys or Governmental Obligations.
SECTION 11.06. Any moneys or Governmental Obligations deposited with
any paying agent or the Trustee, or then held by the Company, in trust for
payment of principal of or premium or interest on the Debentures of a particular
series that are not applied but remain unclaimed by the holders of such
Debentures for at least two years after the date upon which the principal of
(and premium, if any) or interest on such Debentures shall have respectively
become due and payable, shall, upon written notice from the Company, be repaid
to the Company on May 31 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the paying agent and the Trustee shall
be released from all further liability with respect to such moneys or
Governmental Obligations, and the holder of any of the Debentures entitled to
receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company for the payment thereof.
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors
SECTION 12.01. No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Debenture, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Debentures or implied therefrom; and that any and all such
personal liability of every name and nature, either at common law, in equity or
by constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Debentures.
ARTICLE THIRTEEN
Miscellaneous Provisions
SECTION 13.01. All the covenants, stipulations, promises and
agreements in this Indenture contained by or on behalf of the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 13.02. Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board, committee
or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation
that shall at the time be the lawful sole successor of the Company.
SECTION 13.03. Except as otherwise expressly provided herein, any
notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Debentures
to or on the Company may be given or served by being deposited first-class
postage prepaid in a post-office letter box addressed (until another address is
filed in writing by the Company with the Trustee), as follows: Central and South
West Corporation, 1616 Woodall Rodgers Freeway, Dallas, Texas 75202, Attention:
Director, Finance. Any notice, election, request or demand by the Company or any
Debentureholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.
SECTION 13.04. This Indenture and each Debenture shall be deemed to be
a contract made under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of that State, without regard to
the conflicts of laws principles thereof.
SECTION 13.05. (a) Upon any application or demand by the Company to
the Trustee to take any action under any of the provisions of this Indenture,
the Company shall furnish to the Trustee an Officer's Certificate stating that
all conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
in this Indenture (other than the certificate provided pursuant to Section
5.03(d) of this Indenture) shall include (1) a statement that the person making
such certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 13.06. Simultaneously with the execution of this Indenture,
the Company shall deliver to the Trustee an Opinion of Counsel stating that, in
the opinion of such counsel, (a) this Indenture has been duly authorized by and
lawfully executed and delivered on behalf of the Company, is in full force and
effect and is legal, valid and binding upon the Company in accordance with its
terms, except to the extent limited by bankruptcy, insolvency, reorganization or
other laws affecting creditors' rights and (b) the Debentures have been
authorized, executed and delivered by the Company and constitute legal, valid
and binding obligations of the Company in accordance with their terms.
SECTION 13.07. Except as provided pursuant to Section 2.01 pursuant to
a Board Resolution, and as set forth in an Officer's Certificate, or established
in one or more indentures supplemental to this Indenture, in any case where the
date of maturity of interest or principal of any Debenture or the date of
redemption of any Debenture shall not be a Business Day then payment of interest
or principal (and premium, if any) may be made on the next succeeding Business
Day with the same force and effect as if made on the nominal date of maturity or
redemption, and no interest shall accrue for the period after such nominal date.
SECTION 13.08. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by operation of
Section 3.18(c) of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.09. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.
SECTION 13.10. In case any one or more of the provisions contained in
this Indenture or in the Debentures of any series shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Debentures, but this Indenture and such Debentures shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
SECTION 13.11. The Company will have the right at all times to assign
any of its rights or obligations under this Indenture to a direct or indirect
wholly-owned subsidiary of the Company; provided that, in the event of any such
assignment, the Company will remain liable for all such obligations. Subject to
the foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. The Indenture may
not otherwise be assigned by the parties thereto.
SECTION 13.12. The parties intend that, for each holder of a Debenture
and each person that acquires a beneficial ownership interest in a Debenture,
such Debentures shall constitute indebtedness for purposes of United States
federal, state and local taxes.
ARTICLE FOURTEEN
Subordination of Debentures
SECTION 14.01. The Company covenants and agrees, and each holder of
Debentures issued hereunder by his acceptance thereof likewise covenants and
agrees, that all Debentures shall be issued subject to the provisions of this
Article Fourteen; and each holder of a Debenture, whether upon original issue or
upon transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
The payment of the principal of and premium, if any, and interest on
all Debentures issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article Fourteen shall prevent the occurrence of
any default or Event of Default hereunder.
SECTION 14.02. In the event and during the continuation of any default
in the payment of principal, premium, interest or any payment due on any Senior
Indebtedness continuing beyond the period of grace, if any, specified in the
instrument evidencing such Senior Indebtedness (and the Trustee has received
written notice thereof from the Company or one or more holders of Senior
Indebtedness or their representative or representatives or a trustee), unless
and until such default shall have been cured or waived or shall have ceased to
exist, and in the event that the maturity of any Senior Indebtedness has been
accelerated because of a default (and the Trustee has received written notice
thereof from the Company or one or more holders of Senior Indebtedness or their
representative or representatives or a trustee), then no payment shall be made
by the Company with respect to the principal (including redemption and sinking
fund payments) of or premium, if any, or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any holder when such payment is prohibited by the
preceding paragraph of this Section 14.02, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such payment
of the amounts then due and owing on the Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
SECTION 14.03. Upon any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or to
become due upon all Senior Indebtedness shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made on account of the principal (and premium, if any) or interest on the
Debentures; and upon any such dissolution, winding-up, liquidation or
reorganization, any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the holders of the Debentures or the Trustee would be entitled, except for
the provisions of this Article Fourteen, shall be paid by the Company, by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, by the holders of the Debentures or by the
Trustee under this Indenture if received by them or it directly to the holders
of Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full, in money
or money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness, before any payment or distribution
is made to the holders of Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the holders of the Debentures before all Senior Indebtedness is paid
in full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in money
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article Fourteen, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Fourteen with
respect to the Debentures to the payment of all Senior Indebtedness which may at
the time be outstanding; provided that (i) the Senior Indebtedness is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Ten hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 14.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Ten hereof.
Nothing in Section 14.02 or in this Section 14.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.06.
SECTION 14.04. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of the Debentures shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Debentures shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the holders of the Debentures or the
Trustee would be entitled except for the provisions of this Article Fourteen,
and no payment over pursuant to the provisions of this Article Fourteen, to or
for the benefit of the holders of Senior Indebtedness by holders of the
Debentures or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the holders of the Debentures, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness. It is understood that the provisions of this Article Fourteen are
and are intended solely for the purposes of defining the relative rights of the
holders of the Debentures, on the one hand, and the holders of the Senior
Indebtedness on the other hand.
Nothing contained in this Article Fourteen or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Debentures and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Fourteen
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article Fourteen, the Trustee, subject to the provision of Section 7.01,
and the holders of the Debentures shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the holders of the Debentures, for the purposes of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Fourteen.
SECTION 14.05. Each holder of a Debenture by acceptance thereof
authorizes and directs the Trustee in his, her or its behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Fourteen and appoints the Trustee his attorney-in-fact for any and
all such purposes.
SECTION 14.06. The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or paying
agent in respect of the Debentures pursuant to the provisions of this Article
Fourteen. Notwithstanding the provisions of this Article Fourteen or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee or paying agent in respect of the Debentures
pursuant to the provisions of this Article Fourteen, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office of the Trustee from the Company or a holder or
holders of Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 7.01, shall be entitled in all respects to assume that no such facts
exist; provided that if the Trustee shall not have received the notice provided
for in this Section 14.06 at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 7.01, shall be
entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Fourteen, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article Fourteen, and if such evidence is not furnished
the Trustee may defer any payment to such person pending judicial determination
as to the right of such person to receive such payment.
SECTION 14.07. The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Fourteen in respect of any
Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee or any Authenticating Agent of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Fourteen, and no implied covenants
or obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 7.01, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to holders of Debentures,
the Company or any other person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article Fourteen or otherwise.
SECTION 14.08. No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the holders of the
Debentures, without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the holders of the Debentures to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other person.
The Bank of New York, as Trustee, hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:
[-----------------],
Attest:
By:
[_______________], Secretary
THE BANK OF NEW YORK
as Trustee
By:
Its:
Attest:
By:
Its:
STATE OF )
) ss.
COUNTY OF )
On _____________________, 199_ before me personally appeared
[_________________] and [_________________] personally known to me or proved to
me on the basis of satisfactory evidence to be the persons whose names are
subscribed to the within instrument and acknowledged to me that they executed
the same in their authorized capacities, and that by their signatures on the
instrument the persons, or the entity upon behalf of which the persons acted,
executed the instrument.
Witness my hand and official seal.
------------------------------
Signature of Notary Public
My Commission Expires:
STATE OF )
) ss.
COUNTY OF )
On this day of ___________________, 199_ before me personally appeared
___________________ and _____________________ proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies) and that by his/her/their signature(s) on
the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
---------------------------
Signature of Notary Public
My Commission Expires:
Exhibit 4(b)
PUBLIC SERVICE COMPANY OF OKLAHOMA
AND
THE BANK OF NEW YORK,
as Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of _______, 1997
TO
INDENTURE
Dated as of [ ], 1997
_________% Junior Subordinated Deferrable Interest Debentures,
Series _, Due ____
FIRST SUPPLEMENTAL INDENTURE, dated as of the ____ day of _______,
199_ (the "First Supplemental Indenture"), between PUBLIC SERVICE COMPANY OF
OKLAHOMA, a corporation duly organized and existing under the laws of the State
of Oklahoma (hereinafter sometimes referred to as the "Company"), and THE BANK
OF NEW YORK, a New York banking corporation organized and existing under the
laws of the State of New York, as trustee (hereinafter sometimes referred to as
the "Trustee") (under the Indenture dated as of [ ], 1997 between the Company
and the Trustee (the "Indenture"; all terms used and not defined herein are used
as defined in the Indenture).
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of its junior subordinated debentures
(the "Debentures"), which Debentures are to be issued from time to time in such
series as may be determined by the Company under the Indenture, in an unlimited
aggregate principal amount which may be authenticated and delivered thereunder
as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Debentures to be known
as its ____% Junior Subordinated Deferrable Interest Debentures, Series A, due
____ (such series being hereinafter referred to as the "Series A Debentures"),
the form and substance of such Series A Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this First
Supplemental Indenture; and
WHEREAS, the Company desires and has requested the Trustee to join
with it in the execution and delivery of this First Supplemental Indenture, and
all requirements necessary to make this First Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series A Debentures,
when executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the purchase and acceptance of the
Series A Debentures by the holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the Series A
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE ONE
General Terms and Conditions of
the Series A Debentures
SECTION 1.01. There shall be and is hereby authorized a series of
Debentures designated the "____% Junior Subordinated Deferrable Interest
Debentures, Series A, Due ____" limited in aggregate principal amount to
$___________, which amount shall be as set forth in any written order of the
Company for the authentication and delivery of Series A Debentures. The Series A
Debentures shall mature and the principal shall be due and payable, together
with all accrued and unpaid interest thereon, on _________, and shall be issued
in the form of registered Series A Debentures without coupons.
SECTION 1.02. Principal and interest on the Series A Debentures will
be payable, the transfer of such Series A Debentures will be registrable and
such Series A Debentures will be exchangeable for Series A Debentures bearing
identical terms and provisions at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered holder at such address as shall appear in the
Debenture Register or by wire transfer to an account maintained by the
registered holder as specified in the Debenture Register.
SECTION 1.03. Each Series A Debenture will bear interest at the rate
of ____% per annum from and including the original date of issuance until the
principal thereof becomes due and payable, and on any overdue principal and (to
the extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum, payable
quarterly in arrears on ___________, __________, _________ and ___________ of
each year (each, an "Interest Payment Date"), commencing on _______________, to
the person in whose name such Series A Debenture or any predecessor Series A
Debenture is registered at the close of business on the __________, _________,
________ or __________, respectively, preceding that Interest Payment Date
(each, a "Record Date"). Any such interest installment not punctually paid or
duly provided for on any Interest Payment Date shall forthwith cease to be
payable to the registered holder on the relevant Record Date, and may be paid to
the person in whose name the Series A Debenture (or one or more predecessor
Debentures) is registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the registered holders of the Series A Debentures not
less than 10 days prior to such special record date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Series A Debentures may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
the Indenture; provided, however, that interest (other than interest described
in the next sentence) shall not be considered payable by the Company on any
Interest Payment Date falling within an Extension Period (as defined in Section
3.01 below), unless the Company has elected to make a full or partial payment of
interest accrued on the Series A Debentures on that Interest Payment Date.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months and, for any period shorter than
a full calendar month, on the basis of the actual number of days elapsed in such
period. In the event that any date on which interest is payable on the Series A
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
ARTICLE TWO
Redemption of the Series A Debentures
SECTION 2.01. Subject to the terms of Article Three of the Indenture,
the Company shall have the right to redeem the Series A Debentures, in whole or
in part, from time to time, after ___________, at a redemption price equal to
100% of the principal amount of Series A Debentures to be redeemed plus any
accrued and unpaid interest thereon to the date of such redemption. If the
Series A Debentures are only partially redeemed pursuant to this Section, the
Series A Debentures will be redeemed by lot or by any other method utilized by
the Trustee.
ARTICLE THREE
Extension of Interest Payment Period
SECTION 3.01. Subject to Section 4.06 of the Indenture, so long as the
Company shall not be in default in the payment of interest on the Series A
Debentures, the Company shall have the right, at any time during the term of the
Series A Debentures, to extend any interest payment period of such Series A
Debentures at any time and from time to time for a period not to exceed 20
consecutive calendar quarters from the last Interest Payment Date to which
interest was paid in full and not to extend beyond the maturity of the Series A
Debentures (each, an "Extension Period"), provided that such Extension Period
ends on another Interest Payment Date. No interest shall be due and payable
during an Extension Period, but on the Interest Payment Date occurring at the
end of each Extension Period the Company shall pay to the holders of record on
the Record Date for such Interest Payment Date (regardless of who the holders of
record may have been on other dates during the Extension Period) all accrued and
unpaid interest on the Series A Debentures, together with interest thereon at
the rate specified for the Series A Debentures. Prior to the termination of any
Extension Period, the Company may pay all or any portion of the interest accrued
on the Series A Debentures on any Interest Payment Date to holders of record on
the Record Date for that Interest Payment Date or from time to time further
extend the interest payment period, provided that any such Extension Period,
together with all such previous and further extensions thereof, shall not exceed
20 consecutive calendar quarters or extend beyond the maturity of the Series A
Debentures. If the Company shall elect to pay all of the interest accrued on the
Series A Debentures on an Interest Payment Date during an Extension Period, that
Extension Period shall automatically terminate on that Interest Payment Date.
Upon the termination of an Extension Period and the payment of all amounts of
interest then due, the Company may commence a new Extension Period, subject to
the foregoing requirements.
SECTION 3.02. The Company shall give the Trustee written notice of (i)
any election by the Company to initiate an Extension Period and the duration
thereof, (ii) any election by the Company to extend any Extension Period beyond
the interest Payment Date on which that Extension Period is then scheduled to
terminate and the duration of such extension and (iii) any election by the
Company to make a full or partial payment of interest accrued on the Series A
Debentures on any Interest Payment Date during any Extension Period and the
amount of such payment. In no event shall such notice by the Company be given
less than one Business Day prior to the Record Date next preceding the
applicable Interest Payment Date. Upon receipt of any such notice, the Trustee
shall give written notice of the Company's election by mail to the Series A
Debentureholders within five business days. The Company shall make a public
announcement of any such election in accordance with New York Stock Exchange
rules not less than five Business Days prior to such Record Date.
ARTICLE FOUR
Form of Series A Debenture
SECTION 4.01. The Series A Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[If the Debenture is to be a Global Debenture, insert-- This Debenture
is a Global Debenture within the meaning of the Indenture hereinafter referred
to and is registered in the name of a Depositary or a nominee of a Depositary.
This Debenture is exchangeable for Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary, or to a successor Depositary or to a nominee of such
successor Depositary) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to the issuer or its
agent for registration of transfer, exchange or payment, and any Debenture
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof,
Cede & Co., has an interest herein.]
No. __________________ $_________________
CUSIP No. ____________
PUBLIC SERVICE COMPANY OF OKLAHOMA
----------%
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A, DUE ____
PUBLIC SERVICE COMPANY OF OKLAHOMA, a corporation duly organized and
existing under the laws of the State of Oklahoma (herein referred to as the
"Company", which term includes any successor corporation under the Indenture),
for value received, hereby promises to pay to __________________________________
or registered assigns, the principal sum of ___________________ Dollars on
____________, and to pay interest on such principal sum from and including
_____________ or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
payable quarterly in arrears on __________, _________, _________ and __________
of each year, commencing on ______________, at the rate of _____ % per annum
until the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of interest at
the same rate per annum. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day year of twelve 30-day months
and, for any period shorter than a full calendar month, on the basis of the
actual number of days elapsed in such period. In the event that any date on
which interest is payable on the Series A Debentures is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly provided for on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this Debenture (or one or more Predecessor Debentures, as defined
in the Indenture) is registered at the close of business on the __________,
_________, ________ or __________, respectively, preceding that Interest Payment
Date (each, a "Record Date"). Any such interest installment not punctually paid
or duly provided for on any Interest Payment Date shall forthwith cease to be
payable to the registered holder on the relevant Record Date, and may be paid to
the person in whose name this Debenture (or one or more Predecessor Debentures)
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture hereinafter
referred to; provided, however, that interest shall not be considered payable by
the Company on any Interest Payment Date falling within an Extension Period (as
defined below), unless the Company has elected to make a full or partial payment
of interest accrued on the Series A Debentures on that Interest Payment Date.
The principal of (and premium, if any) and the interest on this Debenture shall
be payable at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York, in any coin or currency of the
United States of America which at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of interest
may be made at the option of the Company by check mailed to the registered
holder at such address as shall appear in the Debenture Register or, with
respect to a registered holder of $1,000,000 or more in aggregate principal
amount of Debentures who has delivered a written request to the Trustee at least
14 days prior to the relevant Interest Payment Date electing to have payments
made by wire transfer to a designated account in the United States, by wire
transfer of immediately available funds to such designated account.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each holder hereof, by his acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
those provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are contained on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.
Dated _____________________________
PUBLIC SERVICE COMPANY OF OKLAHOMA
By_______________________________
Its:
Attest:
- ----------------------------
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in
the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee or as Authentication Agent
By _____________________________
Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture (as defined below), all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of _____, 1997 duly executed and
delivered between the Company and THE BANK OF NEW YORK, a New York banking
corporation duly organized and existing under the laws of the State of New York,
as Trustee (herein referred to as the "Trustee"), as supplemented by the First
Supplemental Indenture dated as of _____________ between the Company and the
Trustee (such Indenture as so supplemented being hereinafter referred to as the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debentures. By the terms of the Indenture, the Debentures are
issuable in series which may vary as to amount, date of maturity, rate of
interest and in other respects as in the Indenture provided. This series of
Debentures is limited in aggregate principal amount as specified in the First
Supplemental Indenture.
Subject to the terms of Article Three of the Indenture, the Company
shall have the right to redeem this Series A Debenture at the option of the
Company, without premium or penalty, in whole or in part at any time and from
time to time after _____________ (an "Optional Redemption"), at a redemption
price equal to 100% of the principal amount of Series A Debentures to be
redeemed plus any accrued and unpaid interest thereon to the date of such
redemption. If the Series A Debentures are only partially redeemed by the
Company pursuant to an Optional Redemption, the Series A Debentures will be
redeemed by lot or by any other method utilized by the Trustee.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will be
issued in the name of the holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Debenture upon compliance by the Company with
certain conditions set forth therein.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to, changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debentures of any series, reduce the principal amount thereof, reduce the
rate or extend the time of payment of interest thereon or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debenture then outstanding and
affected thereby. The Indenture also contains provisions permitting the holders
of a majority in aggregate principal amount of the Debentures of all series at
the time outstanding affected thereby, on behalf of the holders of the
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any of the
Debentures of such series, which default may be waived by the unanimous consent
of the holders affected. A default may also be deemed to be waived subject to
the Company's compliance with certain provisions of the Indenture, including the
payment of matured interest and principal, other than principal on the
Debentures that has not become due by their terms, and the remedy or,
alternatively, waiver of all other defaults under the Indenture. Any such
consent or waiver by the registered holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and of any Debenture issued
in exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
Subject to Section 4.06 of the Indenture, so long as the Company shall
not be in default in the payment of interest on the Series A Debentures, the
Company shall have the right, at any time during the term of the Series A
Debentures, to extend any interest payment period of such Series A Debentures at
any time and from time to time for a period not to exceed 20 consecutive
calendar quarters from the last Interest Payment Date to which interest was paid
in full and not to extend beyond the maturity of the Series A Debentures (each,
an "Extension Period"), provided that such Extension Period ends on another
Interest Payment Date. No interest shall be due and payable during an Extension
Period, but on the Interest Payment Date occurring at the end of each Extension
Period the Company shall pay to the holders of record on the Record Date for
such Interest Payment Date (regardless of who the holders of record may have
been on other dates during the Extension Period) all accrued and unpaid interest
on the Series A Debentures, together with interest thereon, at the rate
specified for the Series A Debentures. Prior to the termination of any Extension
Period, the Company may pay all or any portion of the interest accrued on the
Series A Debentures on any Interest Payment Date to holders of record on the
Record Date for that Interest Payment Date or from time to time further extend
the interest payment period, provided that any such Extension Period, together
with all such previous and further extensions thereof, shall not exceed 20
consecutive calendar quarters or extend beyond the maturity of the Series A
Debentures. If the Company shall elect to pay all of the interest accrued on the
Series A Debentures on an Interest Payment Date during an Extension Period, that
Extension Period shall automatically terminate on that Interest Payment Date.
Upon the termination of an Extension Period and the payment of all amounts of
interest then due, the Company may commence a new Extension Period, subject to
the foregoing requirements.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Debenture Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, The City of New York
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by the registered
holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Debentures of this series are issuable in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations herein and therein set
forth, Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the holder surrendering the same.
All terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ARTICLE FIVE
Original Issue of Series A Debentures
SECTION 5.01. Series A Debentures in the aggregate principal amount of
$___________, may, upon execution of this First Supplemental Indenture, or from
time to time thereafter, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
such Debentures to or upon the written order of the Company, signed by its
Chairman, President, General Manager, Controller or its Treasurer, without any
further action by the Company.
ARTICLE SIX
Miscellaneous Provisions
SECTION 6.01. Except as otherwise expressly provided in this First
Supplemental Indenture or in the form of Series A Debenture or otherwise clearly
required by the context hereof or thereof, all terms used herein or in the form
of Series A Debenture that are defined in the Indenture shall have the several
meanings respectively assigned to them thereby.
SECTION 6.02. The Indenture, as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided.
SECTION 6.03. The recitals herein contained are made by the Company
and not by the Trustee, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representation as to the validity or
sufficiency of this First Supplemental Indenture.
SECTION 6.04. This First Supplemental Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:__________________________________
Attest:
- ------------------------
THE BANK OF NEW YORK, as Trustee
By:__________________________________
Attest:
- ------------------------
STATE OF )
) ss.
COUNTY OF )
On the _________ day of ___________, 199_, before me personally came
____________________ and ____________ to me known, who, being by me duly sworn,
did depose and say that they reside at __________________; that they are
_________________ and ___________________, respectively, of The Bank of New
York, one of the corporations described in and which executed the above
instrument; that they know the corporate seal of the corporation; that the seal
affixed to that instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of that corporation and that they signed
their names thereto by like authority.
-----------------------------------
NOTARY PUBLIC
My Commission Expires:
STATE OF )
) ss.
COUNTY OF )
On the ______________ day of __________________, 199_, before me personally
came _____________________ and _____________________ to me known, who, being by
me duly sworn, did depose and say that they reside at ________, _______; that
they are a ________ and __________, respectively, of Public Service Company of
Oklahoma, one of the corporations described in and which executed the above
instrument; that they know the corporate seal of the corporation; that the seal
affixed to that instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of that corporation and that they signed
their names thereto by like authority.
-----------------------------------
NOTARY PUBLIC
My Commission Expires:
Exhibit 4(c)
PUBLIC SERVICE COMPANY OF OKLAHOMA
AND
THE BANK OF NEW YORK,
as Trustee
--------------------
First Supplemental Indenture
Dated as of ______, 1997
TO
INDENTURE
Dated as of _____, 1997
--------------------
_____% Junior Subordinated Deferrable Interest Debentures, Series A
FIRST SUPPLEMENTAL INDENTURE, dated as of the ___ day of _______,
1997 (the "First Supplemental Indenture"), between PUBLIC SERVICE COMPANY OF
OKLAHOMA, a corporation duly organized and existing under the laws of the State
of Oklahoma (hereinafter sometimes referred to as the "Company" or "PSO"), and
THE BANK OF NEW YORK, a New York banking corporation, as trustee (hereinafter
sometimes referred to as the "Trustee") (under the Indenture dated as of
_______, 1997 between the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of its junior subordinated debentures
(the "Debentures"), which Debentures are to be issued from time to time in such
series as may be determined by the Company under the Indenture, in an unlimited
aggregate principal amount which may be authenticated and delivered thereunder
as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debentures to be
known as its _____% Junior Subordinated Deferrable Interest Debentures, Series A
(such series being hereinafter referred to as the "Series A Debentures"), which
Series A Debentures will be issued to evidence a loan made to the Company of the
proceeds from the issuance by PSO Capital I, a Delaware business trust (the
"Trust"), of preferred undivided beneficial interests in the assets of the Trust
(the "Preferred Securities") and common undivided beneficial interests in the
assets of the Trust (the "Common Securities") pursuant to the terms of an
Amended and Restated Trust Agreement (the "Trust Agreement") dated as of
_______, 1997 among the Company, as Depositor, The Bank of New York, as Property
Trustee, The Bank of New York (Delaware), as Delaware Trustee and the
Administrative Trustees named therein (the "Administrative Trustees"), which
Trust Agreement shall be substantially in the form attached hereto as Annex A,
the form and substance of such Series A Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this First
Supplemental Indenture; and
WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this First Supplemental Indenture,
and all requirements necessary to make this First Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Series A Debentures,
when executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the purchase and acceptance
of the Series A Debentures by the holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and substance of the
Series A Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE ONE
Additional Definitions
SECTION 1.01. For all purposes of this First Supplemental
Indenture, capitalized terms used herein without definition shall have the
meanings specified in the Indenture.
SECTION 1.02. The terms defined in this Section, for all purposes
of this First Supplemental Indenture, shall have the respective meanings
specified in this Section.
"Additional Sums" has the meaning specified in Section 5.05 of
this First Supplemental Indenture.
"Additional Taxes" means the sum of any additional taxes, duties
and other governmental charges to which the Trust has become subject from time
to time as a result of a Tax Event.
"Common Securities" has the meaning specified in the second
recital of this First Supplemental Indenture.
"Distributions" means amounts payable in respect of the Preferred
Securities and Common Securities as provided in the Trust Agreement.
"Extension Period' has the meaning specified in Section 4.01 of
this First Supplemental Indenture.
"Guarantee" means the guarantee by the Company of Distributions
on the Preferred Securities of the Trust to the extent provided in the Guarantee
Agreement, substantially in the form attached hereto as Annex B.
"Investment Company Event" means, in respect of the Trust, the
receipt by the Trust of an Opinion of Counsel, rendered by a law firm having a
recognized national tax and securities practice, to the effect that, as a result
of the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law), the Trust is or will
be considered an "investment company" that is required to be registered under
the 1940 Act, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities of the Trust.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Preferred Securities" has the meaning specified in the second
recital of this First Supplemental Indenture.
"Property Trustee" means, in respect of the Trust, the commercial
bank or trust company identified as the Property Trustee in the Trust Agreement,
solely in its capacity as Property Trustee of the Trust under the Trust
Agreement and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as therein provided.
"Special Event" means a Tax Event or an Investment Company Event.
"Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities of the Trust, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date of such Opinion of Counsel,
subject to United States federal income tax with respect to income received or
accrued on the corresponding Series A Debentures, (ii) interest payable by the
Company on the Series A Debentures is not, or within 90 days of the date of such
Opinion of Counsel, will not be, deductible by PSO, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days of the date of such Opinion of Counsel, subject to more than a DE
MINIMIS amount of other taxes, duties or other governmental charges.
"Trust" has the meaning specified in the second recital of this
First Supplemental Indenture.
"Trust Agreement" has the meaning specified in the second recital
of this First Supplemental Indenture.
ARTICLE TWO
General Terms and Conditions of
the Series A Debentures
SECTION 2.01. There shall be and is hereby authorized a series of
Debentures designated the "_____% Junior Subordinated Deferrable Interest
Debentures, Series A," limited in aggregate principal amount to $___________,
which amount shall be as set forth in any written order of the Company for the
authentication and delivery of Series A Debentures. The Series A Debentures
shall mature and the principal shall be due and payable, together with all
accrued and unpaid interest thereon, on ________ 2037, provided that the Company
may shorten such maturity date at any time and from time to time at the election
of the Company for one or more periods, but in no event shall such maturity date
be earlier than ________, 2002, and further provided that if the Company
exercises its right to liquidate the Trust and distribute the Debentures to
holders of the Preferred Securities pursuant to Section 904 of the Trust
Agreement, the maturity date of such Debentures may be shortened to any date
selected by the Company that is (i) no earlier than the date five years after
the initial issuance of the Preferred Securities and (ii) no later than
________, 2037. The Series A Debentures shall be issued in the form of
registered Series A Debentures without coupons.
SECTION 2.02. The Series A Debentures shall be issued in
certificated form and registered in the name of the Property Trustee or its
nominee, subject to the exchange of such certificated Series A Debentures for a
Global Debenture as provided in the Trust Agreement. Series A Debentures
represented by a Global Debenture will not be exchangeable for, and will not
otherwise be issuable as, Series A Debentures in certificated form, except as
provided in this First Supplemental Indenture. Principal and interest on the
Series A Debentures will be payable, the transfer of such Series A Debentures
will be registrable and such Series A Debentures will be exchangeable for Series
A Debentures bearing identical terms and provisions at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, The City of
New York; provided, however, that payment of interest may be made at the option
of the Company by check mailed to the registered holder at such address as shall
appear in the Debenture Register or, with respect to a registered holder of
$1,000,000 or more in aggregate principal amount of Series A Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date (as defined in Section 2.03 below) electing to
have payments made by wire transfer to a designated account in the United
States, by wire transfer of immediately available funds to such designated
account. The Company and the Trustee will act as co-paying agents for the Series
A Debentures. Payments of principal of and interest on the Series A Debentures
issued as a Global Debenture will be made to the Depositary. The Depository
Trust Company (55 Water Street, New York) will initially act as the Depositary
for the Global Debenture.
A Global Debenture shall be exchangeable for Series A Debentures
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such Global Debenture and no successor depositary
shall have been appointed, or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Company in its sole discretion determines that such
Global Debenture shall be so exchangeable or (iii) the Global Debenture was
issued pursuant to Section 904 of the Trust Agreement and there shall have
occurred and be continuing an Event of Default with respect to such Global
Debenture and the holders of at least a majority of the beneficial interests in
such Global Debenture advise the Trustee in writing that the continuation of a
book-entry system through the Depositary is no longer in their best interest,
then the Trustee shall notify the Depositary and the Depositary shall notify all
holders of beneficial interests in the Global Debenture of the occurrence of
such event and the availability of Series A Debentures to such holders. Any
Global Debenture that is exchangeable pursuant to the preceding sentence shall
be exchangeable for definitive certificates registered in such names as the
Depositary shall direct.
SECTION 2.03. Each Series A Debenture will bear interest at the
rate of _____% per annum from and including the original date of issuance or
from the most recent Interest Payment Date referred to below to which interest
has been paid or duly provided for until the principal thereof becomes due and
payable, and on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year (each, an "Interest Payment
Date"), commencing on _______, 1997, to the person in whose name such Series A
Debenture or any predecessor Series A Debenture is registered at the close of
business on the Business Day next preceding that Interest Payment Date (each, a
"Record Date"); provided, however, that if the Series A Debentures shall not be
in the form of a Global Debenture, the record date shall be the 15th day of the
month in which the relevant Interest Payment Date occurs. Any such interest
installment not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the registered holder on the
relevant Record Date, and may be paid to the person in whose name the Series A
Debenture (or one or more predecessor Debentures) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered holders
of the Series A Debentures not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Series A
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture; provided, however, that
interest (other than interest described in the next sentence) shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period, unless the Company has elected to make a full or partial
payment of interest accrued on the Series A Debentures on that Interest Payment
Date. Any partial payment of interest accrued on the Series A Debentures on any
Interest Payment Date falling within an Extension Period shall be paid pro rata
to such registered holders based upon the principal amount of Series A
Debentures then held by such registered holders.
The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and, for any period shorter
than a full calendar month, on the basis of the actual number of days elapsed in
such period. In the event that any date on which interest is payable on the
Series A Debentures is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the date such payment was originally
payable.
ARTICLE THREE
Redemption of the Series A Debentures
SECTION 3.01. Subject to the terms of Article Three of the
Indenture, the Company shall have the right to redeem the Series A Debentures,
in whole, at any time, or in part, from time to time, on or after _______, 2002,
at a redemption price equal to 100% of the principal amount of Series A
Debentures to be redeemed plus any accrued and unpaid interest thereon to the
date of such redemption. If the Series A Debentures are only partially redeemed
pursuant to this Section, the Series A Debentures will be redeemed by lot or by
any other method utilized by the Trustee, such method to be determined solely in
the discretion of the Trustee. The Company may not redeem the Series A
Debentures in part unless all accrued and unpaid interest has been paid in full
on all outstanding Series A Debentures for all interest periods terminating on
or prior to the date of redemption.
SECTION 3.02. If a Special Event in respect of the Trust shall
occur and be continuing, the Company may, at its option, redeem the Series A
Debentures at any time within 90 days of the occurrence of such Special Event,
in whole, but not in part, subject to the provisions of the Indenture. The
redemption price for any Series A Debenture so redeemed shall be equal to 100%
of the principal amount of the Series A Debentures to be redeemed plus any
accrued and unpaid interest thereon to the date of redemption.
ARTICLE FOUR
Extension of Interest Payment Period
SECTION 4.01. Subject to Section 4.06 of the Indenture and
Section 5.06 of this First Supplemental Indenture, the Company shall have the
right, at any time during the term of the Series A Debentures, to defer the
payment of interest on such Series A Debentures at any time and from time to
time for a period not to exceed 20 consecutive calendar quarters from the last
Interest Payment Date to which interest was paid in full (but in no event beyond
the maturity of the Series A Debentures) (each, an "Extension Period"), during
which periods the Company shall have the right to make partial payments of
interest on any Interest Payment Date, and at the end of such Extension Period
the Company shall pay all interest then accrued and unpaid thereon. Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that such Extension Period together with all
such previous and further extensions of such Extension Period shall not exceed
20 consecutive quarters or extend beyond the maturity of the Series A
Debentures. No such Extension Period shall end on a date other than an Interest
Payment Date. Upon termination of any such Extension Period and upon the payment
of all accrued and unpaid interest then due, the Company may elect to begin a
new Extension Period, subject to the above requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof.
SECTION 4.02. The Company shall give the Trustee and the
Administrative Trustees written notice of (i) any election by the Company to
initiate an Extension Period and the duration thereof, (ii) any election by the
Company to extend an Extension Period beyond the Interest Payment Date on which
that Extension Period is then scheduled to terminate and the duration of such
extension and (iii) any election by the Company to make a full or partial
payment of interest accrued on the Series A Debentures on any Interest Payment
Date during an Extension Period and the amount of such payment. In no event
shall such notice by the Company be given less than one Business Day prior to
the earlier of (A) the date the Administrative Trustees are required to give
notice to The New York Stock Exchange or other applicable self-regulatory
organization or to the holders of the Preferred Securities of the record date or
the date Distributions are payable but in any event not less than one Business
Day prior to such record date or (B) one Business Day prior to such date the
Distributions on the Preferred Securities would have been payable except for the
election to begin such Extension Period. Upon receipt of any such notice, the
Trustee shall give written notice of the Company's election by mail to the
Series A Debentureholders within five Business Days. The Company shall make a
public announcement of any such election in accordance with New York Stock
Exchange rules not less than five Business Days prior to such Record Date.
ARTICLE FIVE
Additional Terms Relating to the Preferred Securities
SECTION 5.01. (a) For so long as any Preferred Securities remain
outstanding, if, upon an Event of Default, the Trustee fails or the holders of
not less than 33% in aggregate principal amount of the outstanding Series A
Debentures fail to declare the principal of all of the Series A Debentures to be
immediately due and payable, the holders of at least 33% in aggregate
liquidation preference of the Preferred Securities then outstanding (determined
in accordance with the Trust Agreement) shall have such right by a notice in
writing to the Company and the Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Series A Debentures
shall become immediately due and payable (subject to Section 6.01(c) of the
Indenture), provided that the payment of principal and interest on such Series A
Debentures shall remain subordinated to the extent provided in the Indenture.
(b) For so long as any Preferred Securities remain outstanding,
if, upon an Event of Default, the Trustee fails to proceed to enforce any right
available to the holders of the Series A Debentures for 60 days, the holders of
at least 33% in aggregate liquidation preference of the Preferred Securities
then outstanding (determined in accordance with the Trust Agreement) shall have
the right, to the fullest extent permitted by law, to directly institute
proceedings for enforcement of such rights.
(c) For so long as any Preferred Securities remain outstanding,
to the fullest extent permitted by law, upon the occurrence of an Event of
Default described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture, any
holder of Preferred Securities shall have the right to institute a proceeding
directly against the Company for enforcement of payment to such holder of the
principal of or interest on the Series A Debentures having a principal amount
equal to the aggregate liquidation preference of the related Preferred
Securities held by such holder after the due date specified for such payment in
the Series A Debentures.
SECTION 5.02. For so long as any Preferred Securities remain
outstanding, if the holders of a majority in aggregate principal amount of the
Series A Debentures fail to waive an Event of Default in accordance with Section
6.06 of the Indenture, the holders of a majority in aggregate liquidation
preference of the Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) have such right.
SECTION 5.03. For so long as any Preferred Securities remain
outstanding, the Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, and no Person shall consolidate with or merge into
the Company or convey, transfer or lease its properties and assets substantially
as an entirety to the Company, unless such consolidation, merger, conveyance,
transfer or lease is permitted under the Trust Agreement and the Guarantee and
does not give rise to any breach or violation of the Trust Agreement or the
Guarantee.
SECTION 5.04. For so long as any Preferred Securities remain
outstanding, the Company shall not terminate the Indenture or amend or
supplement the Indenture in any manner that materially adversely affects the
interests of the holders of the Preferred Securities, and subject to Section
6.01(c) of the Indenture, no waiver of any Event of Default or compliance with
any covenant under the Indenture shall be effective without the prior consent to
such waiver of the holders of at least a majority of the aggregate liquidation
preference of such Preferred Securities then outstanding (determined in
accordance with the Trust Agreement) unless and until the principal of the
Series A Debentures and all accrued and unpaid interest thereon have been paid
in full.
SECTION 5.05. In the event that (i) the Trust is the holder of
all of the Outstanding Series A Debentures, (ii) a Tax Event in respect of the
Trust shall have occurred and be continuing and (iii) the Company shall not have
(a) redeemed the Series A Debentures pursuant to Section 3.02 of this First
Supplemental Indenture or (b) terminated the Trust pursuant to Section 902(b) of
the Trust Agreement, the Company shall pay to the Trust (and its permitted
successors or assigns under the Trust Agreement) for so long as the Trust (or
its permitted successor or assignee) is the registered holder of any Series A
Debentures, such additional amounts as may be necessary in order that the amount
of Distributions (including any Additional Amounts (as defined in the Trust
Agreement)) then due and payable by the Trust on the related Preferred
Securities and Common Securities that at any time remain outstanding in
accordance with the terms thereof shall not be reduced as a result of any
Additional Taxes (the "Additional Sums"). Whenever in the Indenture or the
Series A Debentures there is a reference in any context to the payment of
principal of or interest on the Series A Debentures, such mention shall be
deemed to include mention of the payments of the Additional Sums provided for in
this paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made, PROVIDED, however,
that the deferral of the payment of interest pursuant to Section 4.01 of this
First Supplemental Indenture or the Series A Debentures shall not defer the
payment of any Additional Sums that may be due and payable during such interest
payment period.
SECTION 5.06. For so long as any Preferred Securities remain
outstanding, the Company covenants and agrees with each holder of Series A
Debentures issued to the Trust that it will not, and it will not permit any
Subsidiary of the Company to, (i) declare, set aside or pay any dividend or
distribution on, or repurchase, redeem, or otherwise acquire or make any sinking
fund payment with respect to, any shares of the Company's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities that rank PARI PASSU with or junior in
interest to the Series A Debentures or make any guarantee payments with respect
to the foregoing (other than (a) dividends or distributions in shares of its
capital stock or in rights to acquire shares of its capital stock, (b)
conversions into or exchanges for shares of its capital stock, (c) redemptions,
purchases or other acquisitions of shares of its capital stock made for the
purpose of an employee incentive plan or benefit plan of the Company or any of
its subsidiaries and mandatory redemptions or sinking fund payments with respect
to any series of Preferred Stock of the Company that are subject to mandatory
redemption or sinking fund requirements, provided that the aggregate stated
value of all such series outstanding at the time of any such payment does not
exceed five percent of the aggregate of (1) the total principal amount of all
bonds or other securities representing secured indebtedness issued or assumed by
the Company and then outstanding and (2) the capital and surplus of the Company
to be stated on the books of account of the Company after giving effect to such
payment, provided, however, that any moneys deposited in any sinking fund and
not in violation of this provision may thereafter be applied to the purchase or
redemption of such Preferred Stock in accordance with the terms of such sinking
fund without regard to the restrictions contained in this provision, and (d)
payments under any guarantee by the Company with respect to any securities of a
subsidiary of the Company, provided that the proceeds from the issuance of such
securities were used to purchase Debentures of any series) if at such time (i)
there shall have occurred any event of which the Company has actual knowledge
that (a) with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (ii) the Company shall be in
default with respect to its payment of any obligations under the Guarantee or
(iii) the Company shall have given notice of its election to begin an Extension
Period as provided herein and shall not have rescinded such notice, or such
period, or any extension thereof, shall be continuing.
SECTION 5.07. For so long as any Preferred Securities remain
outstanding, the Company also covenants with each holder of Series A Debentures
issued to the Trust (i) to maintain directly or indirectly 100% ownership of the
Common Securities of the Trust; provided, however, that any permitted successor
of the Company under the Indenture may succeed to the Company's ownership of
such Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate
the Trust, except (a) in connection with a distribution of the Series A
Debentures to the holders of Preferred Securities in liquidation of the Trust or
(b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement and (iii) to use its reasonable efforts,
consistent with the terms and provisions of the Trust Agreement, to cause the
Trust to remain classified as a "grantor trust" and not to be classified as an
association taxable as a corporation for United States federal income tax
purposes.
ARTICLE SIX
Form of Series A Debenture
The Series A Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[If the Debenture is to be issued as a Global Debenture,
insert--This Debenture is a Global Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary, or to a successor Depositary or
to a nominee of such successor Depositary) may be registered except in limited
circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the issuer or its agent for registration of transfer, exchange or payment, and
any Debenture issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.]
No.___________ $__________
CUSIP No. ______________
Public Service Company of Oklahoma
-----%
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A
PUBLIC SERVICE COMPANY OF OKLAHOMA, a corporation duly organized
and existing under the laws of the State of Oklahoma (herein referred to as the
"Company", which term includes any successor corporation under the Indenture),
for value received, hereby promises to pay to _____________________ or
registered assigns, the principal sum of $____, on _______, 2037, or on such
earlier date as the Company may elect subject to the terms of Section 2.01 of
the First Supplemental Indenture and to pay interest on such principal sum from
and including _______, 199_ or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or duly
provided for, payable quarterly in arrears on March 31, June 30, September 30
and December 31 of each year, commencing on _______, 1997, at the rate of _____%
per annum, until the principal hereof shall have become due and payable, and on
any overdue principal and premium, if any, and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months and, for any period shorter than a full calendar month, on the
basis of the actual number of days elapsed in such period. In the event that any
date on which interest is payable on this Debenture is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly provided for on any
Interest Payment Date will, as provided in the Indenture, be paid to the person
in whose name this Debenture (or one or more Predecessor Debentures, as defined
in the Indenture) is registered at the close of business on the Business Day
next preceding that Interest Payment Date (each a "Record Date"); provided,
however, that if this Debenture shall not be in the form of a Global Debenture
the record date shall be the 15th day of the month in which the relevant
Interest Payment Date occurs. Any such interest installment not punctually paid
or duly provided for on any Interest Payment Date shall forthwith cease to be
payable to the registered holder on the relevant Record Date, and may be paid to
the person in whose name this Debenture (or one or more Predecessor Debentures)
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may then be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture
hereinafter referred to; provided, however, that interest shall not be
considered payable by the Company on any Interest Payment Date falling within an
Extension Period (as defined below), unless the Company has elected to make a
full or partial payment of interest accrued on this Debenture on that Interest
Payment Date. Any partial payment of interest accrued on this series of
Debentures on any Interest Payment Date falling within an Extension Period shall
be paid pro rata to the registered holder of this Debenture based upon the
principal amount of this Debenture in relation to the aggregate principal amount
of all Debentures of this series then outstanding. The principal of (and
premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, in any coin or currency of the United States of
America which at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered holder at such address
as shall appear in the Debenture Register or, with respect to a registered
holder of $1,000,000 or more in aggregate principal amount of Debentures who has
delivered a written request to the Trustee at least 14 days prior to the
relevant Interest Payment Date electing to have payments made by wire transfer
to a designated account in the United States, by wire transfer of immediately
available funds to such designated account.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee its attorney-in-fact for
any and all such purposes. Each holder hereof, by its acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
those provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are contained on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.
PUBLIC SERVICE COMPANY OF
OKLAHOMA
By
, Treasurer
Attest:
, Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK
as Trustee or as Authenticating Agent
By
Authorized Signatory
(REVERSE)
_____% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE,
SERIES A
(continued)
This Debenture is one of a duly authorized series of debentures
of the Company (herein sometimes referred to as the "Debentures"), specified in
the Indenture (as defined below), all issued or to be issued in one or more
series under and pursuant to an Indenture dated as of _____, 1997 duly executed
and delivered between the Company and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee (herein referred to as the "Trustee"), as supplemented
by the First Supplemental Indenture dated as of _____, 1997 between the Company
and the Trustee (such Indenture as so supplemented being hereinafter referred to
as the "Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debentures. By the terms of the Indenture, the Debentures are
issuable in series which may vary as to amount, date of maturity, rate of
interest and in other respects as in the Indenture provided. This series of
Debentures is limited in aggregate principal amount as specified in the First
Supplemental Indenture.
Subject to the terms of Article Three of the Indenture, the
Company shall have the right to redeem the Debentures of this series at the
option of the Company, without premium or penalty, in whole or in part at any
time and from time to time on or after _______ (an "Optional Redemption"), at a
redemption price equal to 100% of the principal amount of the Debentures of this
series to be redeemed plus any accrued and unpaid interest thereon to the date
of such redemption. If the Debentures of this series are only partially redeemed
by the Company pursuant to an Optional Redemption, the Debentures of this series
will be redeemed by lot or by any other method utilized by the Trustee, such
method to be determined solely in the discretion of the Trustee.
If a Special Event in respect of the Trust shall occur and be
continuing, the Company may, at its option, redeem this Debenture at any time
within 90 days of the occurrence of such Special Event, in whole, but not in
part, subject to the provisions of the Indenture. The redemption price for any
Debenture of this series so redeemed shall be equal to 100% of the principal
amount thereof plus accrued and unpaid interest to the date of such redemption.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will be
issued in the name of the holder hereof upon the cancellation hereof.
In case an Event of Default with respect to the Debentures of
this series shall have occurred and be continuing, the principal of all of the
Debentures of this series may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of
the entire indebtedness of the Debentures of this series upon compliance by the
Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
Outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to, changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debentures of any series, reduce the principal amount thereof, reduce the
rate or extend the time of payment of interest thereon or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debenture then outstanding and
affected thereby. The Indenture also contains provisions permitting the holders
of a majority in aggregate principal amount of the Debentures of all series at
the time outstanding affected thereby, on behalf of the holders of the
Debentures of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any of the
Debentures of such series, which default may be waived by the unanimous consent
of the holders affected. A default may also be deemed to be waived subject to
the Company's compliance with certain provisions of the Indenture, including the
payment of matured interest and principal, other than principal on the
Debentures that has not become due by their terms, and the remedy or,
alternatively, waiver of all other defaults under the Indenture. Any such
consent or waiver by the registered holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and of any Debenture issued
in exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
For so long as any Preferred Securities remain outstanding, if,
upon an Event of Default, the Trustee fails or the holders of not less than 33%
in principal amount of the outstanding Debentures of this series fail to declare
the principal of all of the Debentures of this series to be immediately due and
payable, the holders of at least 33% in aggregate liquidation preference of the
Preferred Securities then outstanding (determined in accordance with the related
Trust Agreement) shall have such right by a notice in writing to the Company and
the Trustee; and upon any such declaration such principal amount of and the
accrued interest on all of the Debentures of this series shall become
immediately due and payable (subject to Section 6.01(c) of the Indenture),
provided that the payment of principal and interest on such Debentures shall
remain subordinated to the extent provided in the Indenture.
For so long as any Preferred Securities remain outstanding, if,
upon an Event of Default, the Trustee fails to proceed to enforce any right
available to the holders of the Series A Debentures for 60 days, the holders of
at least 33% in aggregate liquidation preference of the Preferred Securities
then outstanding (determined in accordance with the Trust Agreement) shall have
the right, to the fullest extent permitted by law, to directly institute
proceedings for enforcement of such rights.
For so long as any Preferred Securities remain outstanding, to
the fullest extent permitted by law, upon the occurrence of an Event of Default
described in Section 6.01(a)(1) or 6.02(a)(2) of the Indenture, any holder of
Preferred Securities shall have the right to institute a proceeding directly
against the Company for enforcement of payment to such holder of the principal
of or interest on the Series A Debentures having a principal amount equal to the
aggregate liquidation preference of the related Preferred Securities held by
such holder after the due date specified for such payment in the Series A
Debentures.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
Subject to the provisions of the Indenture, the Company shall
have the right, at any time during the term of this series of Debentures, to
defer the payment of interest on this series of Debentures at any time and from
time to time for a period not to exceed 20 consecutive calendar quarters from
the last Interest Payment Date to which interest was paid in full (but in no
event beyond the maturity of the Series A Debentures) (each, an "Extension
Period") during which periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date, and at the end of such
Extension Period the Company shall pay all interest then accrued and unpaid
thereon. Prior to the termination of any such Extension Period, the Company may
further extend the interest payment period, provided that such Extension Period
together with all such previous and further extensions of such Extension Period
shall not exceed 20 consecutive quarters or extend beyond the maturity of the
Series A Debentures. Upon termination of any such Extension Period and upon the
payment of all accrued and unpaid interest then due, the Company may select a
new Extension Period, subject to the above requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Debenture Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, The City of New York,
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by the registered
holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[If the Debenture is to be issued as a Global Debenture,
insert--This Global Debenture is exchangeable for Debentures in certificated
form only under certain limited circumstances set forth in the Indenture.] The
Debentures of this series are issuable in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations herein and therein set forth,
Debentures of this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different authorized
denomination, as requested by the holder surrendering the same.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE SEVEN
Original Issue of Series A Debentures
Series A Debentures in the aggregate principal amount of
$___________ may, upon execution of this First Supplemental Indenture, or from
time to time thereafter, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
such Debentures to or upon the written order of the Company, signed by its
Chairman, President, Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE EIGHT
Miscellaneous Provisions
SECTION 8.01. Except as otherwise expressly provided in this
First Supplemental Indenture or in the form of Series A Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
the form of Series A Debenture that are defined in the Indenture shall have the
several meanings respectively assigned to them thereby.
SECTION 8.02. The Indenture, as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided.
SECTION 8.03. The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee makes no representation as to the validity
or sufficiency of this First Supplemental Indenture.
SECTION 8.04. This First Supplemental Indenture may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:
, Treasurer
THE BANK OF NEW YORK, as Trustee
By:
Exhibit 4(e)
CERTIFICATE OF TRUST
OF
PSO CAPITAL I
THIS CERTIFICATE OF TRUST of PSO Capital I (the "Trust"), dated
January 29, 1997, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801 et seq.).
1. Name. The name of the business trust being
formed hereby is PSO Capital I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), 23 White Clay Center, Newark, New Castle County,
Delaware 19711.
3. Counterparts. This Certificate of Trust may be
executed in one or more counterparts, all of which together
constitute one and the same instrument.
4. Effective Date. This Certificate of Trust shall
be effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK,
as Trustee
By: /S/ REMO J. REALE
Name: Remo J. Reale
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE)
as Trustee
By: /S/ JOSEPH G. ERNST_
Name: Joseph G. Ernst
Title: Assistant Vice President
/S/ WENDY G. HARGUS
Wendy G. Hargus, not in her
individual capacity but solely
as Trustee
EXHIBIT 4(f)
TRUST AGREEMENT
This TRUST AGREEMENT, dated as of January 29, 1997, is among Public
Service Company of Oklahoma, an Oklahoma corporation, as "Depositor," The Bank
of New York, a New York banking corporation, The Bank of New York (Delaware), a
Delaware corporation, and Wendy G. Hargus, not in their individual capacities,
but solely as Trustees. The Depositor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "PSO Capital I," in
which name the Trustees, or the Depositor to the extent provided
herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over
to the Trustees the sum of $10. The Trustees hereby acknowledge
receipt of such amount in trust from the Depositor, which amount
shall constitute the initial trust estate. The Trustees hereby
declare that they will hold the trust estate in trust for the
Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 28
of Title 12 of the Delaware Code, 12 DEL. Css.3801 ET SEQ. (the
"Business Trust Act"), and that this document constitutes the
governing instrument of the Trust. The Trustees are hereby
authorized and directed to execute and file a certificate of
trust with the Delaware Secretary of State in accordance with the
provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended and
restated Trust Agreement, satisfactory to each such party and
substantially in the form to be included as an Exhibit to the
1933 Act Registration Statement (as defined below), to provide
for the contemplated operation of the Trust created hereby and
the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such
amended and restated Trust Agreement, the Trustees shall not have
any duty or obligation hereunder or with respect to the trust
estate, except as otherwise required by applicable law or as may
be necessary to obtain prior to such execution and delivery any
licenses, consents or approvals required by applicable law or
otherwise.
4. The Depositor, as the sponsor of the Trust, shall have the
exclusive right and responsibility to engage in the following
activities: (i) to file with the Securities and Exchange
Commission (the "Commission") and execute, in each case on behalf
of the Trust, (a) the Registration Statement on Form S-3
(including the prospectus and the exhibits contained therein)
(the "1933 Act Registration Statement"), including any
pre-effective or post-effective amendments to such 1933 Act
Registration Statement, relating to the registration under the
Securities Act of 1933, as amended, of the Preferred Securities
of the Trust and certain other securities and (b) a Registration
Statement on Form 8-A (the "1934 Act Registration Statement")
(including any pre-effective and post-effective amendments
thereto) relating to the registration of the Preferred Securities
of the Trust under Section 12(b) of the Securities Exchange Act
of 1934, as amended; (ii) to file with the New York Stock
Exchange, any other national stock exchange or interdealer
quotation system (collectively, the "Exchange") and execute on
behalf of the Trust listing applications and all other
applications, statements, certificates, agreements and other
instruments as shall be necessary or desirable to cause the
Preferred Securities to be listed on the Exchange; (iii) to file
and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under
the securities or "Blue Sky" laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or
desirable and (iv) to execute on behalf of the Trust that certain
Underwriting Agreement relating to the Preferred Securities,
among the Trust, the Depositor and the several Underwriters named
therein, substantially in the form to be included as an Exhibit
to the 1933 Act Registration Statement. In the event that any of
the filings referred to in clauses (i), (ii) and (iii) above is
required by the rules and regulations of the Commission, the
Exchange or state securities or blue sky laws, to be executed on
behalf of the Trust by any of the Trustees, Wendy G. Hargus, in
her capacity as Trustee of the Trust, is hereby authorized and
directed to join in any such filing and to execute on behalf of
the Trust any and all of the foregoing.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be three and thereafter
the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Depositor
which may increase or decrease the number of Trustees, provided,
however, that to the extent required by the Business Trust Act,
one Trustee shall either be a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity
which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable
Delaware law. Subject to the foregoing, the Depositor is entitled
to appoint or remove without cause any Trustee at any time. The
Trustees may resign upon thirty days prior notice to the
Depositor.
7. This Trust Agreement shall be governed by, and be construed in
accordance with, the laws of the State of Delaware (without
regard to conflict of laws principles).
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed as of the day and year first above written.
PUBLIC SERVICE COMPANY OF OKLAHOMA,
as Depositor
By: /S/ WENDY G. HARGUS
Name: Wendy G. Hargus
Title: Treasurer
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee
By: /S/ REMO J. REALE
Name: Remo J. Reale
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity but
solely as Trustee
By: /S/ JOSEPH G. ERNST
Name: Joseph G. Ernst
Title: Assistant Vice President
/S/ WENDY G. HARGUS
Wendy G. Hargus, not in her individual
capacity but solely as Trustee
Exhibit 4(g)
AMENDED AND RESTATED
TRUST AGREEMENT
among
PUBLIC SERVICE COMPANY OF OKLAHOMA, as Depositor,
THE BANK OF NEW YORK, as Property Trustee,
THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of [ ], 1997
PSO CAPITAL [I]
TABLE OF CONTENTS
Page
ARTICLE I
Defined Terms
Section 101. Definitions........................................... 2
ARTICLE II
Establishment of the Trust
Section 201. Name.................................................. 11
Section 202. Office of the Delaware Trustee; Principal Place
of Business......................................... 11
Section 203. Initial Contribution of Trust Property;
Organizational Expenses............................. 11
Section 204. Issuance of the Preferred Securities.................. 12
Section 205. Issuance of the Common Securities; Subscription
and Purchase of Debentures..................... 12
Section 206. Declaration of Trust.................................. 12
Section 207. Authorization to Enter into Certain Transactions...... 13
Section 208. Assets of Trust....................................... 17
Section 209. Title to Trust Property............................... 17
ARTICLE III
Payment Account
Section 301. Payment Account....................................... 17
ARTICLE IV
Distributions; Redemption
Section 401. Distributions......................................... 17
Section 402. Redemption............................................ 18
Section 403. Subordination of Common Securities.................... 20
Section 404. Payment Procedures.................................... 21
Section 405. Tax Returns and Reports............................... 21
Section 406. Payment of Taxes, Duties, Etc. of the Trust........... 22
ARTICLE V
Trust Securities Certificates
Section 501. Initial Ownership..................................... 22
Section 502. The Trust Securities Certificates..................... 22
Section 503. Execution and Delivery of Trust Securities
Certificates........................................ 22
Section 505. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates............................. 24
Section 506. Persons Deemed Securityholders........................ 24
Section 507. Access to List of Securityholders' Names and
Addresses........................................... 24
Section 508. Maintenance of Office or Agency....................... 25
Section 509. Appointment of Paying Agent........................... 25
Section 510. Ownership of Common Securities by Depositor........... 26
Section 511. Book-Entry Preferred Securities Certificates; Common
Securities Certificate......................... 26
Section 512. Notices to Clearing Agency............................ 27
Section 513. Definitive Preferred Securities Certificates.......... 27
Section 514. Rights of Securityholders............................. 28
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 601. Limitations on Voting Rights.......................... 29
Section 602. Notice of Meetings.................................... 30
Section 603. Meetings of Preferred Securityholders................. 30
Section 604. Voting Rights......................................... 31
Section 605. Proxies, etc.......................................... 31
Section 606. Securityholder Action by Written Consent.............. 31
Section 607. Record Date for Voting and Other Purposes............. 32
Section 608. Acts of Securityholders............................... 32
Section 609. Inspection of Records................................. 33
ARTICLE VII
Representations and Warranties
Section 701. Representations and Warranties of the Bank and the
Property Trustee............................... 33
Section 702. Representations and Warranties of the Delaware Bank
and the Delaware Trustee....................... 34
Section 703. Representations and Warranties of Depositor........... 35
ARTICLE VIII
The Trustees
Section 801. Certain Duties and Responsibilities................... 36
Section 802. Certain Notices....................................... 38
Section 803. Certain Rights of Property Trustee.................... 38
Section 804. Not Responsible for Recitals or Issuance of
Securities.......................................... 40
Section 805. May Hold Securities................................... 40
Section 806. Compensation; Indemnity; Fees......................... 40
Section 807. Corporate Property Trustee Required; Eligibility of
Trustees............................................ 41
Section 808. Conflicting Interests................................. 42
Section 809. Co-Trustees and Separate Trustee...................... 42
Section 810. Resignation and Removal; Appointment of Successor..... 43
Section 811. Acceptance of Appointment by Successor................ 45
Section 812. Merger, Conversion, Consolidation or Succession to
Business............................................ 45
Section 813. Preferential Collection of Claims Against Depositor
or Trust............................................ 46
Section 814. Reports by Property Trustee........................... 46
Section 815. Reports to the Property Trustee....................... 46
Section 816. Evidence of Compliance with Conditions Precedent...... 47
Section 817. Number of Trustees.................................... 47
Section 818. Delegation of Power................................... 47
Section 819. Voting................................................ 48
ARTICLE IX
Termination, Liquidation and Merger
Section 901. Termination Upon Expiration Date...................... 48
Section 902. Early Termination..................................... 48
Section 903. Termination........................................... 48
Section 904. Liquidation........................................... 49
Section 905. Mergers, Consolidations, Amalgamations or
Replacements of the Trust........................... 50
ARTICLE X
Miscellaneous Provisions
Section 1001. Limitation of Rights of Securityholders............... 51
Section 1002. Amendment............................................. 52
Section 1003. Separability.......................................... 53
Section 1004. Governing Law......................................... 53
Section 1005. Payments Due on Non-Business Day...................... 53
Section 1006. Successors............................................ 53
Section 1007. Headings.............................................. 54
Section 1008. Reports, Notices and Demands.......................... 54
Section 1009. Agreement Not to Petition............................. 54
Section 1010. Trust Indenture Act; Conflict with Trust Indenture
Act................................................. 55
Section 1011. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture...................................... 55
Section 1012. Counterparts........................................... 56
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities
PSO CAPITAL I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
ss. 310 (a)(1)........................................... 807
(a)(2)........................................... 807
(a)(3)........................................... 809
(a)(4)........................................... 207(a)(ii)
(b).............................................. 808
ss. 311 (a).............................................. 813
(b).............................................. 813
ss. 312 (a).............................................. 507
(b).............................................. 507
(c).............................................. 507
ss. 313 (a).............................................. 814(a)
(a)(4)........................................... 814(b)
(b).............................................. 814(b)
(c).............................................. 1008
(d).............................................. 814(c)
ss. 314 (a).............................................. 815
(b).............................................. Not Applicable
(c)(1)........................................... 816
(c)(2)........................................... 816
(c)(3)........................................... Not Applicable
(d).............................................. Not Applicable
(e).............................................. 101, 816
ss. 315 (a).............................................. 801(a), 803(a)
(b).............................................. 802, 1008
(c).............................................. 801(a)
(d).............................................. 801, 803
(e).............................................. Not Applicable
ss. 316 (a).............................................. Not Applicable
(a)(1)(A)........................................ Not Applicable
(a)(1)(B)........................................ Not Applicable
(a)(2)........................................... Not Applicable
(b).............................................. Not Applicable
(c).............................................. 607
ss. 317 (a)(1)........................................... Not Applicable
(a)(2)........................................... Not Applicable
(b).............................................. 509
ss. 318 (a).............................................. 1010
Note: This reconciliation and tie sheet shall not, for any purpose, be
deemed to be a part of the Trust Agreement.
AMENDED AND RESTATED TRUST AGREEMENT, dated as of , 1997, among
(i) Public Service Company of Oklahoma, an Oklahoma corporation (including any
successors or assigns, the "Depositor"), (ii) The Bank of New York, a New York
banking corporation duly organized and existing under the laws of the State of
New York, as property trustee (the "Property Trustee" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) The Bank of New York (Delaware), a Delaware banking corporation duly
organized and existing under the laws of the State of Delaware, as Delaware
trustee (the "Delaware Trustee," and, in its separate corporate capacity and not
in its capacity as Delaware Trustee, the "Delaware Bank") (iv) Wendy G. Hargus,
an individual, and R. Russell Davis, an individual, each of whose address is c/o
Public Service Company of Oklahoma (each an "Administrative Trustee" and
collectively the "Administrative Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees referred to collectively as the
"Trustees") and (v) the several Holders, as hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Depositor, the Property Trustee, the Delaware
Trustee, and Wendy G. Hargus, as Administrative Trustee (the "Prior
Administrative Trustee") have heretofore duly declared and established a
business trust pursuant to the Delaware Business Trust Act by the entering into
of that certain Trust Agreement, dated as of , 1997 (the "Original Trust
Agreement"), and by the execution and filing by the Delaware Trustee, the
Property Trustee and the Prior Administrative Trustee with the Secretary of
State of the State of Delaware of the Certificate of Trust, filed on , 1997, the
form of which is attached as Exhibit A; and
WHEREAS, the Depositor, the Delaware Trustee, the Property
Trustee and the Prior Administrative Trustee desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(iv) the appointment of an additional Administrative Trustee;
NOW THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, each party, for the benefit of the other
parties and for the benefit of the Securityholders, hereby amends and restates
the Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
Section 101. DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Trust Agreement as a whole and not to
any particular Article, Section or other subdivision.
"ACT" has the meaning specified in Section 608.
"ADDITIONAL AMOUNT" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of additional
interest accrued on interest in arrears and paid by the Depositor on a Like
Amount of Debentures for such period.
"ADDITIONAL SUMS" has the meaning specified in Section 5.05 of
the First Supplemental Indenture.
"ADMINISTRATIVE TRUSTEE" means each of Wendy G. Hargus and R.
Russell Davis, solely in his capacity as Administrative Trustee of the Trust
formed and continued hereunder and not in his individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"BANK" has the meaning specified in the preamble to this Trust
Agreement.
"BANKRUPTCY EVENT" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction
in the premises adjudging such Person a bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of or in respect of such Person under the United States
Bankruptcy Code or any other similar applicable Federal or State law,
and the continuance of any such decree or order unvacated and unstayed
for a period of 90 days; or the commencement of an involuntary case
under the Federal Bankruptcy Code in respect of such Person, which shall
continue undismissed for a period of 90 days or entry of an order for
relief in such case; or the entry of a decree or order of a court having
jurisdiction in the premises for the appointment on the ground of
insolvency or bankruptcy of a receiver, custodian, liquidator, trustee
or assignee in bankruptcy or insolvency of such Person or of its
property, or for the winding up or liquidation of its affairs, and such
decree or order shall have remained in force unvacated and unstayed for
a period of 90 days; or
(b) the institution by such Person of proceedings to be
adjudicated a voluntary bankrupt, or the consent by such Person to the
filing of a bankruptcy proceeding against it, or the filing by such
Person of a petition or answer or consent seeking liquidation or
reorganization under the Federal Bankruptcy Code or other similar
applicable Federal or State law, or the consent by such Person to the
filing of any such petition or to the appointment on the ground of
insolvency or bankruptcy of a receiver or custodian or liquidator or
trustee or assignee in bankruptcy or insolvency of such Person or of its
property, or shall make a general assignment for the benefit of
creditors.
"BANKRUPTCY LAWS" has the meaning specified in Section 1009.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Depositor to which authority to act on behalf of
the Board of Directors has been delegated, and to be in full force and effect on
the date of such certification, and delivered to the appropriate Trustee.
"BOOK ENTRY PREFERRED SECURITIES CERTIFICATES" means certificates
representing Preferred Securities issued in global, fully registered form to the
Clearing Agency as described in Section 511.
"BUSINESS DAY" means a day other than (a) a Saturday or Sunday,
(b) a day on which banking institutions in The City of New York are authorized
or required by law or executive order to remain closed, or (c) a day on which
the Property Trustee's Corporate Trust Office or the Corporate Trust Office of
the Debenture Trustee is closed for business.
"CERTIFICATE DEPOSITORY AGREEMENT" means the agreement among the
Trust, the Depositor and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
"CERTIFICATE OF TRUST" means the certificate of trust filed with
the Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. The Depository Trust
Company will be the initial Clearing Agency.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means the date of execution and delivery of this
Trust Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"COMMON SECURITY" means an undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"COMMON SECURITIES CERTIFICATE" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"CORPORATE TRUST OFFICE" means the principal corporate trust
office of the Property Trustee or Debenture Trustee, as the case may be, at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Amended and Restated
Trust Agreement is located at 101 Barclay Street, 21W, New York, New York 10286.
"DEBENTURE EVENT OF DEFAULT" means an "Event of Default" as
defined in the Indenture.
"DEBENTURE REDEMPTION DATE" means, with respect to any Debentures
to be redeemed under the Indenture, the date fixed for redemption under the
Indenture.
"DEBENTURE TAX EVENT" means a "Tax Event" as defined in the
Indenture.
"DEBENTURE TRUSTEE" means The Bank of New York, a New York
banking corporation organized under the laws of the State of New York and any
successor thereto, as trustee under the Indenture.
"DEBENTURES" means the $[ ] aggregate principal amount of the
Depositor's [ ]% Junior Subordinated Deferrable Interest Debentures, Series [A],
issued pursuant to the Indenture.
"DEFINITIVE PREFERRED SECURITIES CERTIFICATES" means either or
both (as the context requires) of (a) Preferred Securities Certificates issued
as Book-Entry Preferred Securities Certificates as provided in Section 511(a)
and (b) Preferred Securities Certificates issued in certificated, fully
registered form as provided in Section 513.
"DELAWARE BANK" has the meaning specified in the preamble to this
Trust Agreement.
"DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (ss.) 3801, ET SEQ., as it may be amended from time to
time.
"DELAWARE TRUSTEE" means the commercial bank or trust company
identified as the "Delaware Trustee" in the preamble to this Trust Agreement
solely in its capacity as Delaware Trustee of the Trust formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor trustee appointed as herein provided.
"DEPOSITOR" has the meaning specified in the preamble to this
Trust Agreement.
"DISTRIBUTION DATE" has the meaning specified in Section 401(a).
"DISTRIBUTIONS" means amounts payable in respect of the Trust
Securities as provided in Section 401.
"EVENT OF DEFAULT" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a
period of 30 days; or
(c) default by the Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Trust
Agreement (other than a covenant or warranty a default in the
performance of which or the breach of which is dealt with in clause (b)
or (c), above) and continuation of such default or breach for a period
of 60 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees by the Holders of at least 33% in
aggregate liquidation preference of the Outstanding Preferred Securities
a written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the
Property Trustee and the failure by the Depositor to appoint a successor
Property Trustee within 60 days thereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXPENSE AGREEMENT" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in the form
attached as Exhibit D, as amended from time to time.
"EXPIRATION DATE" has the meaning specified in Section 901.
"EXTENSION PERIOD" has the meaning specified in Section 4.01 of
the First Supplemental Indenture.
"FIRST SUPPLEMENTAL INDENTURE" means the First Supplemental
Indenture dated as of [ ], 1997 between the Depositor and the Debenture Trustee,
as Trustee.
"GLOBAL DEBENTURE" has the meaning specified in the Indenture.
"GUARANTEE" means the Guarantee Agreement executed and delivered
by the Depositor and The Bank of New York, as trustee, contemporaneously with
the execution and delivery of this Trust Agreement, for the benefit of the
holders of the Preferred Securities, as amended from time to time.
"INDENTURE" means the Indenture, dated as of [ ], 1997, as
supplemented by the First Supplemental Indenture, between the Depositor and the
Debenture Trustee, as trustee, as amended or supplemented from time to time.
"INVESTMENT COMPANY EVENT" means the receipt by the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized national tax and
securities law practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or will be considered an
"investment company" that is required to be registered under the 1940 Act, which
Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under this Trust Agreement.
"LIEN" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"LIKE AMOUNT" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture and the proceeds of which will be used to pay the Redemption Price of
such Trust Securities and (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a termination or liquidation of
the Trust, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities of the Holder to whom such Debentures are distributed.
"LIQUIDATION AMOUNT" means the stated amount of $25 per Trust
Security.
"LIQUIDATION DATE" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 904(a).
"LIQUIDATION DISTRIBUTION" has the meaning specified in Section
904(d).
"1940 ACT" means the Investment Company Act of 1940, as amended.
"OFFICER'S CERTIFICATE" means a certificate signed by the
President, a General Manager, the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary, of
the Depositor, and delivered to the appropriate Trustee. The officer signing an
Officer's Certificate given pursuant to Section 816 shall be the principal
executive, financial or accounting officer of the Depositor. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by the officer in rendering the Officer's
Certificate;
(c) a statement that the officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of the officer,
such condition or covenant has been complied with.
"OPINION OF COUNSEL" means a written opinion of counsel, who may
be counsel for the Trust, the Property Trustee, the Delaware Trustee or the
Depositor, but not an employee of any thereof, and who shall be reasonably
acceptable to the Property Trustee.
"ORIGINAL TRUST AGREEMENT" has the meaning specified in the
recitals to this Trust Agreement.
"OUTSTANDING", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities theretofore
executed and delivered under this Trust Agreement, EXCEPT:
(a) Preferred Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent for the Holders of such Preferred
Securities; PROVIDED that, if such Preferred Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange for
or in lieu of which other Preferred Securities have been executed and
delivered pursuant to Sections 504, 505, 511 and 513;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be so owned shall
be so disregarded and (b) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Depositor, one or more of
the Trustees and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.
"OWNER" means each Person who is the beneficial owner of a Book
Entry Preferred Securities Certificate as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).
"PAYING AGENT" means any paying agent or co-paying agent
appointed pursuant to Section 509 and shall initially be the Bank.
"PAYMENT ACCOUNT" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with the Bank in its
trust department for the benefit of the Securityholders in which all amounts
paid in respect of the Debentures will be held and from which the Property
Trustee shall make payments to the Securityholders in accordance with Sections
401 and 402.
"PERSON" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"PREFERRED SECURITY" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $25 and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"PREFERRED SECURITIES CERTIFICATE" means a certificate evidencing
that a Person is a Holder of Preferred Securities, substantially in the form
attached as Exhibit E.
"PROPERTY TRUSTEE" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as herein
provided.
"REDEMPTION DATE" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; PROVIDED that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
"REDEMPTION PRICE" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.
"RELEVANT TRUSTEE" shall have the meaning specified in Section
810.
"SECURITIES REGISTER" and "SECURITIES REGISTRAR" have the
respective meanings specified in Section 504.
"SECURITYHOLDER" or "HOLDER" means a Person in whose name a Trust
Security or Trust Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business Trust
Act. If such Person is the Clearing Agency or its nominee, this shall not
prevent the Owners from having an undivided beneficial interest in the assets of
the Trust.
"TAX EVENT" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States, or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities under this Trust Agreement, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days after the date of such Opinion
of Counsel, subject to United States federal income tax with respect to income
received or accrued on the Debentures, (ii) interest payable by the Depositor on
the Debentures is not, or within 90 days after the date of such Opinion of
Counsel, will not be, deductible by the Depositor, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days after the date of such Opinion of Counsel, subject to more than a
de minimis amount of other taxes, duties, assessments or other governmental
charges.
"TRUST" means the Delaware business trust created and continued
hereby and identified on the cover page to this Trust Agreement.
"TRUST AGREEMENT" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in accordance
with the applicable provisions hereof, including all exhibits hereto, including,
for all purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed;
PROVIDED, HOWEVER, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"TRUST PROPERTY" means (a) the Debentures, (b) the rights of the
Property Trustee under the Guarantee, (c) any cash on deposit in, or owing to,
the Payment Account and (d) all proceeds and rights in respect of the foregoing
and any other property and assets for the time being held or deemed to be held
by the Property Trustee pursuant to the trusts of this Trust Agreement.
"TRUST SECURITY" means any one of the Common Securities or the
Preferred Securities.
"TRUST SECURITIES CERTIFICATE" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
"TRUSTEES" means, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated
as of [ ], 1997, among the Trust, the Depositor and the Underwriters named
therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 201. NAME.
The Trust created and continued hereby shall be known as "PSO
Capital I," as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders of Trust Securities and the
other Trustees, in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and sue and be sued.
Section 202. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS.
The address of the Delaware Trustee in the State of Delaware is
c/o The Bank of New York (Delaware), 23 White Clay Center, Newark, Delaware
19711, Attention: Corporate Trust Administration, or such other address in the
State of Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is c/o Public Service Company of Oklahoma, 212 East Sixth Street, Tulsa,
Oklahoma 74119-1212.
Section 203. INITIAL CONTRIBUTION OF TRUST PROPERTY;
ORGANIZATIONAL EXPENSES.
The Trustees acknowledge receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 204. ISSUANCE OF THE PREFERRED SECURITIES.
On [ ], 1997 the Depositor, on behalf of the Trust and pursuant
to the Original Trust Agreement, executed and delivered the Underwriting
Agreement. Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 502 and deliver in accordance with the Underwriting
Agreement Preferred Securities Certificates, registered in the name of the
nominee of the initial Clearing Agency, in an aggregate amount of [ ] Preferred
Securities having an aggregate Liquidation Amount of $[ ], against receipt of
the aggregate purchase price of such Preferred Securities of $[ ], which amount
such Administrative Trustee shall promptly deliver to the Property Trustee.
Section 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION
AND PURCHASE OF DEBENTURES.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 502 and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount of
[ ] Common Securities having an aggregate Liquidation Amount of $[ ] against
payment by the Depositor of such amount. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor Debentures, registered in the name of the Property Trustee on
behalf of the Trust and having an aggregate principal amount equal to $[ ], and,
in satisfaction of the purchase price for such Debentures, the Property Trustee,
on behalf of the Trust, shall deliver to the Depositor the sum of $[ ].
Section 206. DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Debentures, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Delaware Business Trust Act.
Section 207. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in
accordance with the terms of this Trust Agreement. Subject to the
limitations set forth in paragraph (b) of this Section and Article VIII,
and in accordance with the following provisions (i) and (ii), the
Administrative Trustees shall have the authority to enter into all
transactions and agreements determined by the Administrative Trustees to
be appropriate in exercising the authority, express or implied,
otherwise granted to the Administrative Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including
without limitation, the following:
(i) As among the Trustees, each Administrative Trustee,
acting singly or jointly, shall have the power and authority to
act on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust, the
Expense Agreement and the Certificate Depository
Agreement and such other agreements or documents as may
be necessary or desirable in connection with the purposes
and function of the Trust;
(C) assisting in the registration of the Preferred
Securities under the Securities Act of 1933, as amended,
and under state securities or blue sky laws, and the
qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(D) assisting in the listing of the Preferred
Securities upon such securities exchange or exchanges as
shall be determined by the Depositor and the registration
of the Preferred Securities under the Securities Exchange
Act of 1934, as amended, and the preparation and filing
of all periodic and other reports and other documents
pursuant to the foregoing;
(E) the sending of notices (other than notices of
default) and other information regarding the Trust
Securities and the Debentures to the Securityholders in
accordance with this Trust Agreement;
(F) the appointment of a Paying Agent,
authenticating agent and Securities Registrar in
accordance with this Trust Agreement;
(G) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust and the preparation, execution
and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(H) to take all action that may be necessary or
appropriate for the preservation and the continuation of
the Trust's valid existence, rights, franchises and
privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction
in which such existence is necessary to protect the
limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes
for which the Trust was created; and
(I) the taking of any action incidental to the
foregoing as the Administrative Trustees may from time to
time determine is necessary or advisable to give effect
to the terms of this Trust Agreement for the benefit of
the Securityholders (without consideration of the effect
of any such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall
have the power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any
other payments made in respect of the Debentures in the
Payment Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in
accordance with the terms of this Trust Agreement;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this
Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and
liquidation of the Trust;
(I) after an Event of Default, the taking of any
action incidental to the foregoing as the Property
Trustee may from time to time determine is necessary or
advisable to give effect to the terms of this Trust
Agreement and protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration
of the effect of any such action on any particular
Securityholder);
(J) registering transfers of the Trust Securities
in accordance with this Trust Agreement; and
(K) except as otherwise provided in this Section
207(a)(ii), the Property Trustee shall have none of the
duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 207(a)(i).
(b) So long as this Trust Agreement remains in effect,
the Trust (or the Trustees acting on behalf of the Trust) shall
not undertake any business, activities or transaction except as
expressly provided herein or contemplated hereby. In particular,
the Trustees shall not (i) acquire any investments or engage in
any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or
otherwise dispose of any of the Trust Property or interests
therein, including to Securityholders, except as expressly
provided herein, (iii) take any action that would cause the Trust
to fail or cease to qualify as a "grantor trust" for United
States federal income tax purposes, (iv) incur any indebtedness
for borrowed money or issue any other debt or (v) take or consent
to any action that would result in the placement of a Lien on any
of the Trust Property. The Administrative Trustees shall defend
all claims and demands of all Persons at any time claiming any
Lien on any of the Trust Property adverse to the interest of the
Trust or the Securityholders in their capacity as
Securityholders.
(c) In connection with the issue and sale of the
Preferred Securities, the Depositor shall have the right and
responsibility to assist the Trust with respect to, or effect on
behalf of the Trust, the following (and any actions taken by the
Depositor in furtherance of the following prior to the date of
this Trust Agreement are hereby ratified and confirmed in all
respects):
(i) the preparation and filing by the Trust with
the Commission and the execution on behalf of the Trust
of a registration statement on the appropriate form in
relation to, among other securities, the Preferred
Securities and the Debentures, including any amendments
thereto;
(ii) the determination of the states in which to
take appropriate action to qualify or register for sale
all or part of the Preferred Securities, the Debentures
and the Guarantee and to do any and all such acts, other
than actions which must be taken by or on behalf of the
Trust, and advise the Trustees of actions they must take
on behalf of the Trust, and prepare for execution and
filing any documents to be executed and filed by the
Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the
applicable laws of any such States;
(iii) the preparation for filing by the Trust and
execution on behalf of the Trust of an application to the
New York Stock Exchange or any other national stock
exchange or other organizations for listing upon notice
of issuance of any Preferred Securities or Debentures, if
applicable, and to file or cause an Administrative
Trustee to file thereafter with such exchange or
organization such notifications and documents as may be
necessary from time to time;
(iv) the preparation for filing by the Trust with
the Commission and the execution on behalf of the Trust
of a registration statement on Form 8-A relating to the
registration of the Preferred Securities or Debentures,
if applicable, under Section 12(b) or 12(g) of the
Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the
execution and delivery of, the Underwriting Agreement
providing for the sale of the Preferred Securities; and
(vi) the taking of any other actions necessary or
desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct
the affairs of the Trust and to operate the Trust so that the
Trust will not be deemed to be an "investment company" required
to be registered under the 1940 Act, will be classified as a
"grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes and so
that the Debentures will be treated as indebtedness of the
Depositor for United States federal income tax purposes. In this
connection, subject to Section 1002, the Depositor and the
Administrative Trustees are authorized to take any action, not
inconsistent with applicable law or this Trust Agreement, that
each of the Depositor and the Administrative Trustees determines
in their discretion to be necessary or desirable for such
purposes.
Section 208. ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
Section 209. TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in
the Property Trustee (in its capacity as such) and shall be held and
administered by the Property Trustee for the benefit of the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
Section 301. PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to time in the Payment
Account shall be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as herein
provided, including (and subject to) any priority of payments provided for
herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
Section 401. DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Trust available for
the payment of Distributions. Distributions shall accumulate from [ ], 1997,
and, except during any Extension Period with respect to the Debentures, shall be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing on [ ], 1997. If any date on which a Distribution is
otherwise payable on the Trust Securities is not a Business Day, then the
payment of such Distribution shall be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) with the same force and effect as if made on such date (each date on
which distributions are payable in accordance with this Section 401(a) a
"Distribution Date").
(b) The Trust Securities represent undivided beneficial interests
in the Trust Property, and, as a practical matter, the Distributions on the
Trust Securities shall be payable at a rate of [ ]% per annum of the Liquidation
Amount of the Trust Securities. The amount of Distributions payable for any full
period shall be computed on the basis of a 360-day year of twelve 30-day months.
The amount of Distributions for any partial period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day months.
During any Extension Period with respect to the Debentures, Distributions on the
Preferred Securities will be deferred for a period equal to the Extension
Period. The amount of Distributions payable for any period shall include the
Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the
Property Trustee solely from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand and
immediately available in the Payment Account for the payment of such
Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities and, if the Preferred Securities
are in book-entry form and registered to the Clearing Agency or its nominee,
will be paid by the Clearing Agency or its nominee to the Owners thereof, on the
relevant record date, which shall be one Business Day prior to such Distribution
Date; PROVIDED, HOWEVER, that in the event that the Preferred Securities do not
remain in book-entry-only form, the relevant record date shall be the date 15
days prior to the relevant Distribution Date.
Section 402. REDEMPTION.
(a) On each Debenture Redemption Date and on the stated maturity
of the Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee
by first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date to each Holder of Trust Securities to be
redeemed, at such Holder's address appearing in the Security Register. The
Trustee shall have no responsibility for the accuracy of any CUSIP number
contained in such notice. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities
are to be redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price
will become due and payable upon each such Trust Security to be redeemed and
that distributions thereon will cease to accumulate on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall
be redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has immediately available funds then on hand and available in the
Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then, by 12:00 noon, New York City time, on
the Redemption Date, subject to Section 402(c), the Property Trustee will, so
long as the Preferred Securities are in book-entry-only form, deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the holders thereof.
If the Preferred Securities are no longer in book-entry-only form, the Property
Trustee, subject to Section 402(c), will deposit with the Paying Agent funds
sufficient to pay the applicable Redemption Price and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their Preferred Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Register for the
Trust Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of Securityholders
holding Trust Securities so called for redemption will cease, except the right
of such Securityholders to receive the Redemption Price and any Distribution
payable on or prior to the Redemption Date, but without interest, and such
Securities will cease to be Outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case, with the same force and effect as if made on such date. In the event
that payment of the Redemption Price in respect of any Trust Securities called
for redemption is improperly withheld or refused and not paid either by the
Trust or by the Depositor pursuant to the Guarantee, Distributions on such Trust
Securities will continue to accrue, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities to
the date such Redemption Price is actually paid, in which case the actual
payment date will be the date fixed for redemption for purposes of calculating
the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall
be made to the recordholders thereof as they appear on the Securities Register
for the Trust Securities on the relevant record date, which shall be one
Business Day prior to the relevant Redemption Date; PROVIDED, HOWEVER, that in
the event that the Preferred Securities do not remain in book-entry-only form,
the relevant record date shall be the date fifteen days prior to the relevant
Redemption Date.
(f) Subject to Section 403(a), if less than all the Outstanding
Trust Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected on a PRO RATA basis not more than 60 days prior to the
Redemption Date by the Property Trustee from the Outstanding Preferred
Securities not previously called for redemption, by such method (including,
without limitation, by lot) as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or an integral multiple of $25 in excess thereof) of the
Liquidation Amount of Preferred Securities of a denomination larger than $25.
The Property Trustee shall promptly notify the Security Registrar in writing of
the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the Liquidation
Amount of Preferred Securities which has been or is to be redeemed.
Section 403. SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Sums, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 402(f), pro rata among the Common
Securities and the Preferred Securities based on the Liquidation Amount of the
Trust Securities; PROVIDED, HOWEVER, that if on any Distribution Date or
Redemption Date any Event of Default resulting from a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Sums, if applicable) on, or Redemption Price of, any Common Security,
and no other payment on account of the redemption, liquidation or other
acquisition of Common Securities, shall be made unless payment in full in cash
of all accumulated and unpaid Distributions (including Additional Sums, if
applicable) on all Outstanding Preferred Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all Outstanding Preferred
Securities then called for redemption, shall have been made or provided for, and
all funds immediately available to the Property Trustee shall first be applied
to the payment in full in cash of all Distributions (including Additional Sums,
if applicable) on, or the Redemption Price of, Preferred Securities then due and
payable.
(b) In the case of the occurrence of any Event of Default
resulting from a Debenture Event of Default, the Holder of Common Securities
will be deemed to have waived any right to act with respect to any such Event of
Default under this Trust Agreement until the effect of all such Events of
Default with respect to the Preferred Securities shall have been cured, waived
or otherwise eliminated. Until any such Event of Default under this Trust
Agreement with respect to the Preferred Securities shall have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on behalf
of the Holders of the Preferred Securities and not the Holder of the Common
Securities, and only the Holders of the Preferred Securities will have the right
to direct the Property Trustee to act on their behalf.
Section 404. PAYMENT PROCEDURES.
Payments of Distributions (including Additional Sums, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which shall credit the relevant Persons' accounts at such Clearing Agency
on the applicable distribution dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Common Securityholder.
Section 405. TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States federal, state and local tax
and information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
furnished to such Securityholder or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor with a copy
of all such returns and reports promptly after such filing or furnishing. The
Property Trustee shall comply with United States federal withholding and backup
withholding tax laws and information reporting requirements with respect to any
payments to Securityholders under the Trust Securities.
Section 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Debentures of Additional Sums, the
Property Trustee at the direction of an Administrative Trustee or Depositor
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United States
or any other taxing authority.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 501. INITIAL OWNERSHIP.
Upon the creation of the Trust and the contribution by the
Depositor pursuant to Section 203 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are outstanding,
the Depositor shall be the sole beneficial owner of the Trust.
Section 502. THE TRUST SECURITIES CERTIFICATES.
The Preferred Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in excess
thereof, and the Common Securities Certificates shall be issued in denominations
of $25 Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 504, 511
and 513.
Section 503. EXECUTION AND DELIVERY OF TRUST SECURITIES
CERTIFICATES.
On the Closing Date, the Administrative Trustees shall cause
Trust Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 204 and 205, to be executed on behalf of the Trust by at least one of
the Administrative Trustees and delivered to or upon the written order of the
Depositor, signed by its President, General Manager, the Treasurer or any
Assistant Treasurer without further corporate action by the Depositor, in
authorized denominations.
Section 504. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED
SECURITIES CERTIFICATES.
The Depositor shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 508, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Preferred Securities Certificates (herein referred to as the "Securities
Register") in which the registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and Common
Securities Certificates (subject to Section 510 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Property Trustee shall
be the initial Securities Registrar.
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
508, the Administrative Trustees or any one of them shall execute and deliver,
in the name of the designated transferee or transferees, one or more new
Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such Administrative
Trustee or Trustees. The Securities Registrar shall not be required to register
the transfer of any Preferred Securities that have been called for redemption.
At the option of a Holder, Preferred Securities Certificates may be exchanged
for other Preferred Securities Certificates in authorized denominations of the
same class and of a like aggregate Liquidation Amount upon surrender of the
Preferred Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 508.
Every Preferred Securities Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Property Trustee in accordance with its customary practice. The Trust shall not
be required to (i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business 15 calendar days
before the date of mailing of a notice of redemption of any Preferred Securities
called for redemption and ending at the close of business on the day of such
mailing or (ii) register the transfer of or exchange any Preferred Securities so
selected for redemption, in whole or in part, except the unredeemed portion of
any such Preferred Securities being redeemed in part.
No service charge shall be made for any registration of transfer
or exchange of Preferred Securities Certificates, but the Securities Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
Section 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST
SECURITIES CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and make available for delivery, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
Section 506. PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent and the Securities Registrar shall
treat the Person in whose name any Trust Securities Certificate shall be
registered in the Securities Register as the owner of such Trust Securities
Certificate for the purpose of receiving Distributions and for all other
purposes whatsoever, and neither the Trustees nor the Securities Registrar shall
be bound by any notice to the contrary. Nothing in this provision shall be
construed to prevent the Owners from having an undivided beneficial interest in
the assets of the Trust.
Section 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND
ADDRESSES.
At any time when the Property Trustee is not also acting as the
Securities Registrar, the Administrative Trustees or the Depositor shall furnish
or cause to be furnished (a) to the Property Trustee, semi-annually on or before
January 15 and July 15 in each year, a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the
Securityholders as of the most recent Record Date and (b) to the Property
Trustee, promptly after receipt by any Administrative Trustee or the Depositor
of a request therefor from the Property Trustee in order to enable the Property
Trustee to discharge its obligations under this Trust Agreement, in each case to
the extent such information is in the possession or control of the
Administrative Trustees or the Depositor and is not identical to a previously
supplied list or has not otherwise been received by the Property Trustee in its
capacity as Securities Registrar. The rights of Securityholders to communicate
with other Securityholders with respect to their rights under this Trust
Agreement or under the Trust Securities, and the corresponding rights of the
Trustee shall be as provided in the Trust Indenture Act. Each Holder, by
receiving and holding a Trust Securities Certificate, and each owner shall be
deemed to have agreed not to hold the Depositor, the Property Trustee or the
Administrative Trustees accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
Section 508. MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain in The City of New
York, an office or offices or agency or agencies where Preferred Securities
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Trustees in respect of the Trust
Securities Certificates may be served. The Administrative Trustees initially
designate the principal corporate trust office of the Property Trustee, 101
Barclay Street, New York, NY 10286, as the principal corporate trust office for
such purposes. The Administrative Trustees shall give prompt written notice to
the Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.
Section 509 APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Securityholders from
the Payment Account and if the Preferred Securities are held in book-entry form
and registered to the Clearing Agency or its nominee, the Clearing Agency or its
nominee will in turn make Distributions to the Owners thereof, and the Paying
Agent shall report the amounts of such distributions to the Property Trustee and
the Administrative Trustees. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account for the purpose of making the
Distributions referred to above. The Administrative Trustees may revoke such
power and remove the Paying Agent if such Trustees determine in their sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Trust Agreement in any material respect. The Paying Agent shall
initially be the Property Trustee, and any co-paying agent chosen by the
Property Trustee, and acceptable to the Administrative Trustees and the
Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Depositor. In the event that the Property Trustee shall
no longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees to execute and deliver to the Trustees
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 801, 803 and 806 shall apply to
the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
Section 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
On the Closing Date, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the fullest extent
permitted by law, any attempted transfer of the Common Securities (other than a
transfer in connection with a merger or consolidation of the Depositor into
another corporation or transfer of assets substantially as an entirety pursuant
to Section 10.01 of the Indenture) shall be void. The Administrative Trustees
shall cause each Common Securities Certificate issued to the Depositor to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 511. BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES;
COMMON SECURITIES CERTIFICATE.
(a) The Preferred Securities Certificates, upon original
issuance, will be issued in the form of a typewritten Preferred Securities
Certificate or Certificates representing Book-Entry Preferred Securities
Certificates, to be delivered to or held on behalf of The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of, the Trust. Such
Book-Entry Preferred Securities Certificate or Certificates shall initially be
registered on the Securities Register in the name of Cede & Co., the nominee of
the initial Clearing Agency, and no beneficial owner will receive a Definitive
Preferred Securities Certificate representing such beneficial owner's interest
in such Preferred Securities, except as provided in Section 513. Unless and
until Definitive Preferred Securities Certificates have been issued to
beneficial owners pursuant to Section 513:
(i) the provisions of this Section 511(a) shall be in
full force and effect;
(ii) the Securities Registrar, the Paying Agent and the
Trustees shall be entitled to deal with the Clearing Agency for
all purposes of this Trust Agreement relating to the Book Entry
Preferred Securities Certificates (including the payment of the
Liquidation Amount of and Distributions on the Book-Entry
Preferred Securities) as the sole Holder of Book-Entry Preferred
Securities and shall have no obligations to deal with the Owners
thereof;
(iii) to the extent that the provisions of this Section
511 conflict with any other provisions of this Trust Agreement,
the provisions of this Section 511 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the
Clearing Agency and shall be limited to those established by law
and agreements between such Owners and the Clearing Agency and/or
the Clearing Agency Participants. Pursuant to the Certificate
Depository Agreement, unless and until Definitive Preferred
Securities Certificates are issued pursuant to Section 513, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments on
the Preferred Securities to such Clearing Agency Participants.
Any Clearing Agency designated pursuant hereto will not be deemed
an agent of the Trustees for any purpose.
(b) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate.
Section 512. NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Owners
is required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
513, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
Section 513. DEFINITIVE PREFERRED SECURITIES CERTIFICATES.
If (a) the Depositor advises the Trustees in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Preferred Securities Certificates, and the
Depositor is unable to locate a qualified successor, (b) the Depositor at its
option advises the Trustees in writing that it elects to terminate the
book-entry system through the Clearing Agency, or (c) after the occurrence of a
Debenture Event of Default, Owners of Preferred Securities Certificates
representing beneficial interests aggregating at least a majority of the
Liquidation Amount advise the Property Trustee in writing that the continuation
of a book-entry system through the Clearing Agency is no longer in the best
interests of the Owners of Preferred Securities Certificates, then the Property
Trustee shall notify the Clearing Agency, and the Clearing Agency shall notify
all Owners of Preferred Securities Certificates, of the occurrence of any such
event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Property Trustee of the typewritten Preferred
Securities Certificate or Certificates representing the Book-Entry Preferred
Securities Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in accordance with the instructions
of the Clearing Agency. Neither the Securities Registrar nor the Trustees shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Preferred Securities Certificates, the Trustees shall
recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
Section 514. RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively
in the Property Trustee (in its capacity as such) in accordance with Section
209, and the Securityholders and/or Owners shall not have any right or title
therein other than the rights conferred by their Trust Securities and they shall
have no right to call for any partition or division of property, profits or
rights of the Trust except as described below. The Trust Securities shall be
personal property giving only the rights specifically set forth therein and in
this Trust Agreement. The Trust Securities shall have no preemptive or similar
rights. When issued and delivered to Holders of the Preferred Securities against
payment of the purchase price therefor, the Preferred Securities will be fully
paid and nonassessable interests in the Trust. The Holders of the Preferred
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
(b) (i) For so long as any Preferred Securities remain
Outstanding, if, upon a Debenture Event of Default, the Debenture Trustee fails
or the holders of not less than 33% in principal amount of the outstanding
Debentures fail to declare the principal of all of the Debentures to be
immediately due and payable, the Holders of at least 33% in Liquidation Amount
of the Preferred Securities then Outstanding shall have such right by a notice
in writing to the Depositor and the Debenture Trustee; and upon any such
declaration such principal amount of and the accrued interest on all of the
Debentures shall become immediately due and payable, provided that the payment
of principal and interest on such Debentures shall remain subordinated to the
extent provided in the Indenture.
(ii) The provisions of subsection (b)(i), however, are
subject to the condition that if, at any time after such a
declaration of acceleration with respect to the Debentures has
been made, and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided
in the Indenture, the Depositor shall pay or shall deposit with
the Debenture Trustee a sum sufficient to pay all amounts
required to be paid pursuant to Section 6.01(c) of the Indenture
with respect to a rescission and annulment of such a declaration
and any and all Events of Default with respect to the Debentures,
other than nonpayment of principal on Debentures which shall have
not have become due by their terms, shall have been remedied or
waived as provided in Section 6.06 of the Indenture, then the
Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Depositor and the Debenture
Trustee, may rescind and annul such declaration and its
consequences, but no such rescission and annulment shall extend
to or shall affect any subsequent default, or shall impair any
right consequent thereon.
(c) For so long as any Preferred Securities remain Outstanding,
if, upon a Debenture Event of Default, the Debenture Trustee fails to proceed to
enforce any right available to the Holders of the Debentures for 60 days, the
Holders of at least 33% in Liquidation Amount of the Preferred Securities then
Outstanding shall, to the fullest extent permitted by law, have the right to
directly institute proceedings for enforcement of such rights.
(d) For so long as any Preferred Securities remain Outstanding,
to the fullest extent permitted by law, upon the occurrence of a Debenture Event
of Default specified in Section 6.01(a)(1) or 6.01(a)(2) of the Indenture, any
Holder of Preferred Securities shall have the right to institute a proceeding
directly against the Depositor for enforcement of payment to such Holder of the
principal of or interest on Debentures having a principal amount equal to the
Liquidation Amount of the Preferred Securities of such Holder after the due date
specified for such payment in the Debentures. Except as set forth in Section
514(b), (c) and (d), the Holders of Preferred Securities shall have no right to
exercise directly any right or remedy available to the holders of, or in respect
of, the Debentures.
(e) The Depositor will be subrogated to the rights of the Holder
of the Preferred Securities to the extent of any payment made by the Depositor
to any such Holder of Preferred Securities pursuant to Section 514(c) or (d)
hereof.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 601. LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Sections 514, 810 and
1002 and in the Indenture and as otherwise required by law, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Article Six of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable or (iv) consent to
any amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least a majority in Liquidation Amount of all
Outstanding Preferred Securities; PROVIDED, HOWEVER, that where a consent under
the Indenture would require the consent of each Holder of Outstanding Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior written consent of each holder of Preferred Securities. The Trustees
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Outstanding Preferred Securities, except by a subsequent vote of
the Holders of the Outstanding Preferred Securities. The Property Trustee shall
notify each Holder of the Outstanding Preferred Securities of any notice of
default received from the Debenture Trustee with respect to the Debentures. In
addition to obtaining the foregoing approvals of the Holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Trustees shall, at
the expense of the Depositor, obtain an Opinion of Counsel experienced in such
matters to the effect that the Trust will continue to be classified as a
"grantor trust" and not as an association taxable as a corporation for United
States federal income tax purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides
for, or the Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Preferred Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Preferred Securities as a class will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a majority in
Liquidation Amount of the Outstanding Preferred Securities. No amendment to this
Trust Agreement may be made if, as a result of such amendment, the Trust would
cease to be classified as a "grantor trust" or would be classified as an
association taxable as a corporation for United States federal income tax
purposes.
Section 602. NOTICE OF MEETINGS.
Notice of all meetings of the Preferred Securityholders, stating
the time, place and purpose of the meeting, shall be given by the Property
Trustee pursuant to Section 1008 to each Preferred Securityholder of record, at
his registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
Section 603. MEETINGS OF PREFERRED SECURITYHOLDERS.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
33% of the Preferred Securities (based upon their aggregate Liquidation Amount)
and the Administrative Trustees or the Property Trustee may, at any time in
their discretion, call a meeting of Preferred Securityholders to vote on any
matters as to which the Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their aggregate Liquidation Amount), present in
person or by proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding more
than a majority of the Preferred Securities (based upon their aggregate
Liquidation Amount) held by the Preferred Securityholders of record present,
either in person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
Section 604. VOTING RIGHTS.
Securityholders shall be entitled to one vote for each $25 of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
Section 605. PROXIES, ETC.
At any meeting of Securityholders, any Securityholder entitled to
vote thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Administrative
Trustees, or with such other officer or agent of the Trust as the Administrative
Trustees may direct, for verification prior to the time at which such vote shall
be taken. When Trust Securities are held jointly by several persons, any one of
them may vote at any meeting in person or by proxy in respect of such Trust
Securities, but if more than one of them shall be present at such meeting in
person or by proxy, and such joint owners or their proxies so present disagree
as to any vote to be cast, such vote shall not be received in respect of such
Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and, the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.
Section 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Securityholders at a meeting may
be taken without a meeting if Securityholders holding more than a majority of
all Outstanding Trust Securities (based upon their aggregate Liquidation Amount)
entitled to vote in respect of such action (or such larger proportion thereof as
shall be required by any express provision of this Trust Agreement) shall
consent to the action in writing (based upon their aggregate Liquidation
Amount).
Section 607. RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are
entitled to notice of and to vote at any meeting or by written consent, or to
participate in any Distribution on the Trust Securities in respect of which a
record date is not otherwise provided for in this Trust Agreement, or for the
purpose of any other action, the Administrative Trustees may from time to time
fix a date, not more than 90 days prior to the date of any meeting of
Securityholders or the payment of Distribution or other action, as the case may
be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
Section 608. ACTS OF SECURITYHOLDERS.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Trust Agreement to be
given, made or taken by Securityholders or Owners may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Securityholders or Owners in person or by an agent duly appointed in
writing; and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Securityholders or Owners signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
801) conclusive in favor of the Trustees, if made in the manner provided in this
Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
Whether a Person is a Holder of Preferred Securities shall be
proved by the Securities Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Securityholder of any Trust Security shall bind every
future Securityholder of the same Trust Security and the Securityholder of every
Trust Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount of
such Trust Security or by one or more duly appointed agents each of which may do
so pursuant to such appointment with regard to all or any part of such
Liquidation Amount.
A Securityholder may institute a legal proceeding directly
against the Depositor under the Guarantee to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee (as defined in the Guarantee), the Trust or any Person.
Section 609. INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the
Property Trustee, the records of the Trust shall be open to inspection by
Securityholders during normal business hours for any purpose reasonably related
to such Securityholder's interest as a Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 701. REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE
PROPERTY TRUSTEE.
The Bank and the Property Trustee, each severally on behalf of
and as to itself, as of the date hereof, and each Successor Property Trustee at
the time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee hereunder (the term "Bank" being used to refer to such
Successor Property Trustee in its separate corporate capacity) hereby represents
and warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Bank is a New York banking corporation duly organized,
validly existing and in good standing under the laws of the State of New York;
(b) the Bank has full corporate power, authority and legal right
to execute, deliver and perform its obligations under this Trust Agreement and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and constitutes the valid and legally binding
agreement of the Property Trustee enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(d) the execution, delivery and performance by the Property
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate or other action on the part of the Property Trustee and does not
require any approval of stockholders of the Bank and such execution, delivery
and performance will not (i) violate the Bank's charter or by-laws, (ii) violate
any provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of, any Lien on any
properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or instrument
to which the Property Trustee or the Bank is a party or by which it is bound, or
(iii) violate any law, governmental rule or regulation of the United States or
the State of New York , as the case may be, governing the banking or trust
powers of the Bank or the Property Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Bank;
(e) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein or therein requires the
consent or approval of, the giving of notice to, the registration with or the
taking of any other action with respect to any governmental authority or agency
under any existing federal law governing the banking or trust powers of the Bank
or the Property Trustee, as the case may be, under the laws of the United States
or the State of New York; and
(f) there are no proceedings pending or, to the best of the
Property Trustee's knowledge, threatened against or affecting the Bank or the
Property Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power and
authority of the Property Trustee to enter into or perform its obligations as
one of the Trustees under this Trust Agreement.
Section 702. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE BANK
AND THE DELAWARE TRUSTEE.
The Delaware Bank and the Delaware Trustee, each severally on
behalf of and as to itself, as of the date hereof, and each Successor Delaware
Trustee at the time of the Successor Delaware Trustee's acceptance of
appointment as Delaware Trustee hereunder (the term "Delaware Bank" being used
to refer to such Successor Delaware Trustee in its separate corporate capacity),
hereby represents and warrants (as applicable) for the benefit of the Depositor
and the Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware;
(b) the Delaware Bank has full corporate power, authority and
legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally binding
agreement of the Delaware Trustee enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(d) the execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate or other action on the part of the Delaware Trustee and does not
require any approval of stockholders of the Delaware Bank and such execution,
delivery and performance will not (i) violate the Delaware Bank's charter or
by-laws, (ii) violate any provision of, or constitute, with or without notice or
lapse of time, a default under, or result in the creation or imposition of, any
Lien on any properties included in the Trust Property pursuant to the provisions
of, any indenture, mortgage, credit agreement, license or other agreement or
instrument to which the Delaware Bank or the Delaware Trustee is a party or by
which it is bound, or (iii) violate any law, governmental rule or regulation of
the United States or the State of Delaware, as the case may be, governing the
banking or trust powers of the Delaware Bank or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Delaware Bank or the Delaware Trustee;
(e) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware Trustee contemplated herein or therein requires the
consent or approval of, the giving of notice to, the registration with or the
taking of any other action with respect to any governmental authority or agency
under any existing federal law governing the banking or trust powers of the
Delaware Bank or the Delaware Trustee, as the case may be, under the laws of the
United States or the State of Delaware; and
(f) there are no proceedings pending or, to the best of the
Delaware Trustee's knowledge, threatened against or affecting the Delaware Bank
or the Delaware Trustee in any court or before any governmental authority,
agency or arbitration board or tribunal which, individually or in the aggregate,
would materially and adversely affect the Trust or would question the right,
power and authority of the Delaware Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Section 703. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of
the Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date
on behalf of the Trust have been duly authorized and will have been, duly and
validly executed, issued and delivered by the Administrative Trustees pursuant
to the terms and provisions of, and in accordance with the requirements of, this
Trust Agreement and the Securityholders will be, as of such date, entitled to
the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges
payable by the Trust (or the Trustees on behalf of the Trust) under the laws of
the State of Delaware or any political subdivision thereof in connection with
the execution, delivery and performance by the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
Section 801. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
To the extent that, at law or in equity, an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Securityholders, such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Administrative Trustee's good faith
reliance on the provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they restrict the duties and liabilities of the
Administrative Trustees otherwise existing at law or in equity, are agreed by
the Depositor and the Securityholders to replace such other duties and
liabilities of the Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent
in respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms hereof.
Each Securityholder, by its acceptance of a Trust Security, agrees that it will
look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable in respect
of any Trust Security or for any other liability in respect of any Trust
Security. This Section 801(b) does not limit the liability of the Trustees
expressly set forth elsewhere in this Trust Agreement or, in the case of the
Property Trustee, in the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any
error of judgment made in good faith by an authorized officer of
the Property Trustee, unless it shall be proved that the Property
Trustee was negligent in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less
than a majority in Liquidation Amount of the Trust Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee
under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to
the custody, safe keeping and physical preservation of the
Debentures and the Payment Account shall be to deal with such
Property in a similar manner as the Property Trustee deals with
similar property for its own account, subject to the protections
and limitations on liability afforded to the Property Trustee
under this Trust Agreement and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree with the Depositor and money held by the Property Trustee
need not be segregated from other funds held by it except in
relation to the Payment Account maintained by the Property
Trustee pursuant to Section 301 and except to the extent
otherwise required by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust
Agreement, nor shall the Property Trustee be liable for the
negligence, default or misconduct of the Administrative Trustees
or the Depositor.
Section 802. CERTAIN NOTICES.
(a) Within 15 Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 1008, notice of
such Event of Default to the Securityholders, the Administrative Trustees and
the Depositor, unless such Event of Default shall have been cured or waived. For
purposes of this Section the term "Event of Default" means any event that is, or
after notice or lapse of time or both would become, an Event of Default.
(b) The Administrative Trustees shall transmit, to the
Securityholders in the manner and to the extent provided in Section 1008, notice
of the Depositor's election to begin or further extend an Extension Period on
the Debentures (unless such election shall have been revoked) within the time
specified for transmitting such notice to the holders of the Debentures pursuant
to the Indenture.
Section 803.CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 801:
(a) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution, Opinion of
Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties.
(b) if (i) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses of action
or (ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with other provisions contained
herein or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to which the
Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; PROVIDED, HOWEVER, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officer's Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly delivered by
the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any filing
under tax or securities laws) or any rerecording, refiling or reregistration
thereof;
(f) the Property Trustee may consult with counsel of its choice
(which counsel may be counsel to the Depositor or any of its Affiliates) and the
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon and in accordance with such advice, such counsel
may be counsel to the Depositor or any of its Affiliates, and may include any of
its employees; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Securityholders pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
(h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper
or document, unless requested in writing to do so by one or more
Securityholders, but the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, PROVIDED that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent or
attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the Property
Trustee (i) may request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Trust, and the Trustees do
not assume any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of the
Debentures.
Section 805. MAY HOLD SECURITIES.
Any Trustee or any other agent of any Trustee or the Trust, in
its individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 808 and 813 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
Section 806. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any
provision of this Trust Agreement (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to such
Trustee's negligence, bad faith or willful misconduct (or, in the case
of the Administrative Trustees, any such expense, disbursement or
advance as may be attributable to his or her gross negligence, bad faith
or willful misconduct); and
(c) to indemnify each of the Trustees or any predecessor Trustee
for, and to hold the Trustees harmless against, any loss, damage,
claims, liability, penalty or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance
or administration of this Trust Agreement, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
No Trustee may claim any lien or charge on any Trust Property as
a result of any amount due pursuant to this Section 806.
Section 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF
TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each Administrative
Trustee shall be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect
to the Trust Securities. The Delaware Trustee shall either be (i) a natural
person who is at least 21 years of age and a resident of the State of Delaware
or (ii) a legal entity with its principal place of business in the State of
Delaware and that otherwise meets the requirements of applicable Delaware law
that shall act through one or more persons authorized to bind such entity.
Section 808. CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Property Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Trust Agreement.
Section 809. CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless an Event of Default shall have occurred and be continuing,
at any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor shall have power to appoint,
and upon the written request of the Property Trustee, the Depositor shall for
such purpose join with the Property Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to act as
co-trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to the extent required by law to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Depositor does not join
in such appointment within 15 days after the receipt by it of a request so to
do, or in case a Debenture Event of Default has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment. Any co-trustee
or separate trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity.
Should any written instrument from the Depositor be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged, and
delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:
(a) The Trust Securities shall be executed and delivered and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees specified
hereunder, shall be exercised, solely by such Trustees and not by such
co-trustee or separate trustee.
(b) The rights, powers, duties and obligations hereby conferred
or imposed upon the Property Trustee in respect of any property covered
by such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular
act is to be performed, the Property Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section, and, in case a Debenture Event of Default
has occurred and is continuing, the Property Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Depositor. Upon the written
request of the Property Trustee, the Depositor shall join with the
Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section 809.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee or any other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act
of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate
trustee.
Section 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of any Trustee (the "Relevant Trustee")
and no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 811.
Subject to the immediately preceding paragraph, the Relevant
Trustee may resign at any time with respect to the Trust Securities by giving
written notice thereof to the Securityholders. If the instrument of acceptance
by the successor Trustee required by Section 811 shall not have been delivered
to the Relevant Trustee within 30 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of the Depositor,
any court of competent jurisdiction for the appointment of a successor Relevant
Trustee with respect to the Trust Securities.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee for
any cause, at a time when no Debenture Event of Default shall have occurred and
be continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees with respect to the Trust Securities and the Trust, and the successor
Trustee shall comply with the applicable requirements of Section 811. If the
Property Trustee or the Delaware Trustee shall resign, be removed or become
incapable of continuing to act as the Property Trustee or the Delaware Trustee,
as the case may be, at a time when a Debenture Event of Default shall have
occurred and is continuing, the Preferred Securityholders, by Act of the
Securityholders of a majority in Liquidation Amount of the Preferred Securities
then Outstanding delivered to the retiring Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees with respect to the Trust
Securities and the Trust, and such successor Trustee shall comply with the
applicable requirements of Section 811. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative Trustee, at a
time when a Debenture Event of Default shall have occurred and be continuing,
the Common Securityholder, by Act of the Common Securityholder delivered to an
Administrative Trustee, shall promptly appoint a successor Administrative
Trustee or Administrative Trustees with respect to the Trust Securities and the
Trust, and such successor Administrative Trustee or Administrative Trustees
shall comply with the applicable requirements of Section 811. If no successor
Relevant Trustee with respect to the Trust Securities shall have been so
appointed by the Common Securityholder or the Preferred Securityholders and
accepted appointment in the manner required by Section 811, any Securityholder
who has been a Securityholder of Trust Securities for at least six months may,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Relevant Trustee with
respect to the Trust Securities.
The Property Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 1008 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee
who is a natural person dies or becomes, in the opinion of the Depositor,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) the unanimous act of remaining Administrative
Trustees if there are at least two of them or (b) otherwise by the Depositor
(with the successor in each case being a Person who satisfies the eligibility
requirement for Administrative Trustees set forth in Section 807).
Section 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Relevant
Trustee with respect to the Trust Securities and the Trust, the retiring
Relevant Trustee and each successor Relevant Trustee with respect to the Trust
Securities shall execute and deliver an amendment hereto wherein each successor
Relevant Trustee shall accept such appointment and which (a) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Relevant Trustee all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust Securities and
the Trust and (b) shall add to or change any of the provisions of this Trust
Agreement as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Relevant Trustee, it being understood
that nothing herein or in such amendment shall constitute such Relevant Trustees
co-trustees of the same trust and that each such Relevant Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Relevant Trustee and upon the
execution and delivery of such amendment the resignation or removal of the
retiring Relevant Trustee shall become effective to the extent provided therein
and each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Relevant Trustee with respect to the Trust Securities and the
Trust; but, on request of the Trust or any successor Relevant Trustee such
retiring Relevant Trustee shall duly assign, transfer and deliver to such
successor Relevant Trustee all Trust Property, all proceeds thereof and money
held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the immediately preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless
at the time of such acceptance such successor Relevant Trustee shall be
qualified and eligible under this Article.
Section 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Property Trustee, the Delaware Trustee
or any Administrative Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Relevant Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
Section 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR
OR TRUST.
If and when the Property Trustee or the Delaware Trustee shall be
or become a creditor of the Depositor or the Trust (or any other obligor upon
the Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).
Section 814. REPORTS BY PROPERTY TRUSTEE.
(a) Not later than [ ] of each year commencing with [ ] 1998 the
Property Trustee shall transmit to all Securityholders in accordance with
Section 1008, and to the Depositor, a brief report dated as of such [ ] with
respect to:
(i) its eligibility under Section 807 or, in lieu
thereof, if to the best of its knowledge it has continued to be eligible
under said Section, a written statement to such effect; and
(ii) any change in the property and funds in its
possession as Property Trustee since the date of its last report and any
action taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and its actions
under this Trust Agreement as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each national
securities exchange or other organization upon which the Trust Securities are
listed, with the Commission and with the Depositor.
Section 815. REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314(a) of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Section 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf
of the Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314 (c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officer's Certificate.
Section 817. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be four, provided that the
Holder of all of the Common Securities by written instrument may increase or
decrease the number of Administrative Trustees. The Property Trustee and the
Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to Section 817(a), or
if the number of Trustees is increased pursuant to Section 817(a), a vacancy
shall occur. The vacancy shall be filled with a Trustee appointed in accordance
with Section 810.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 810, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
Section 818. DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 207(a); and
(b) The Administrative Trustees shall have power to delegate from
time to time to such of their number or to the Depositor the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
Section 819. VOTING.
Except as otherwise provided in this Trust Agreement, the consent
or approval of the Administrative Trustees shall require consent or approval by
not less than a majority of the Administrative Trustees.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
Section 901. TERMINATION UPON EXPIRATION DATE.
Unless earlier terminated, the Trust shall automatically
terminate on [ ], 2042 (the "Expiration Date") subject to distribution of the
Trust Property in accordance with Section 904.
Section 902. EARLY TERMINATION.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is wholly optional and within the
discretion of the Depositor) to terminate the Trust and distribute the
Debentures to Securityholders in exchange for the Preferred Securities
in accordance with Section 904;
(c) the redemption of all of the Preferred Securities in
connection with the redemption of all of the Debentures; and
(d) an order for dissolution of the Trust shall have been entered
by a court of competent jurisdiction.
Section 903. TERMINATION.
The respective obligations and responsibilities of the Trustees
and the Trust created and continued hereby shall terminate upon the latest to
occur of the following: (a) the distribution by the Property Trustee to
Securityholders upon the liquidation of the Trust pursuant to Section 904, or
upon the redemption of all of the Trust Securities pursuant to Section 402, of
all amounts required to be distributed hereunder upon the final payment of the
Trust Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders.
Section 904. LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b),
or (d) of Section 902 occurs or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to each Securityholder or if the Preferred
Securities are held in book-entry form, to each Owner through the Clearing
Agency or its nominee, a Like Amount of Debentures, subject to Section 904(d).
Notice of liquidation shall be given by the Property Trustee by first-class
mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to
the Liquidation Date to each Holder of Trust Securities at such Holder's address
appearing in the Securities Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be Outstanding and
any Trust Securities Certificates not surrendered for exchange
will be deemed to represent a Like Amount of Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
certificates for Debentures, or if Section 904(d) applies receive
a Liquidation Distribution, as the Administrative Trustees or the
Property Trustee shall deem appropriate.
(b) Except where Section 902(c) or 904(d) applies, in order to
effect the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 902(c) or 904(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates (or, at the election of the Depositor a Global
Debenture, subject to the provisions of the Indenture) representing a Like
Amount of Debentures will be issued to holders of Trust Securities Certificates
upon surrender of such certificates to the Administrative Trustees or their
agent for exchange, (iii) the Depositor shall use its reasonable efforts to have
the Debentures listed on the New York Stock Exchange or on such other securities
exchange or other organization as the Preferred Securities are then listed or
traded, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to holders of Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of
this Section 904, whether because of an order for dissolution entered by a court
of competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders or if the
Preferred Securities are held in book-entry form, Owners through the Clearing
Agency or its nominee, will be entitled to receive out of the assets of the
Trust available for distribution to Securityholders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the Liquidation Amount per Trust Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, winding-up or termination, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). The holder of the Common Securities will be entitled
to receive Liquidation Distributions upon any such dissolution, winding-up or
termination pro rata (determined as aforesaid) with Holders of Preferred
Securities, except that, if a Debenture Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities.
Section 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR
REPLACEMENTS OF THE TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 905. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the holders of the Preferred
Securities, the Trust may merge with or into, consolidate, amalgamate, be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to a trust organized as such under the laws of any state;
PROVIDED, that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities) so long
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing substantially the same powers and duties as the Property
Trustee as the holder of the Debentures, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed or traded upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Depositor has received an Opinion of Counsel to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an "investment company" under the 1940
Act and (viii) the Depositor owns all of the Common Securities of such successor
entity and guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to any other Person or
permit any other Person to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or the successor entity to be classified as other than a
"grantor trust" for United States federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity of any Person having an interest,
beneficial or otherwise, in Trust Securities shall not operate to terminate this
Trust Agreement, nor entitle the legal representatives or heirs of such Person
or any Securityholder for such Person, to claim an accounting, take any action
or bring any proceeding in any court for a partition or winding-up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
Section 1002. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Administrative Trustees and the Depositor, without the consent of any
Securityholders, (i) as provided in Section 811 with respect to acceptance of
appointment by a successor Trustee, (ii) to cure any ambiguity, correct or
supplement any provision herein which may be inconsistent with any other
provision herein, or to make any other provisions with respect to matters or
questions arising under this Trust Agreement, that shall not be inconsistent
with the other provisions of this Trust Agreement, or (iii) to modify, eliminate
or add to any provisions of this Trust Agreement to such extent as shall be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes as a "grantor trust" at all times that any Trust Securities
are outstanding or to ensure that the Trust will not be required to register as
an "investment company" under the 1940 Act; PROVIDED, HOWEVER, that in the case
of clause (ii), such action shall not adversely affect in any material respect
the interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 601(c) or Section 1002(c)
hereof, any provision of this Trust Agreement may be amended by the
Administrative Trustees and the Depositor (i) with the consent of Trust
Securityholders representing not less than a majority (based upon Liquidation
Amounts) of the Trust Securities then Outstanding and (ii) upon receipt by the
Trustees of an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a "grantor trust" for United States
federal income tax purposes or the Trust's exemption from status of an
"investment company" under the 1940 Act.
(c) In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 603 or 606 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 603 or 606 hereof), this
paragraph (c) of this Section 1002 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement,
no Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an "investment company" under the 1940 Act or to fail or cease to be
classified as a "grantor trust" for United States federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is
made, the Administrative Trustees shall promptly provide to the Depositor a copy
of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall
be required to enter into any amendment to this Trust Agreement which affects
its own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officer's
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
Section 1003. SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 1004. GOVERNING LAW.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF
THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST
AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).
Section 1005. PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be
a day that is not a Business Day, then such payment need not be made on such
date but may be made on the next succeeding day which is a Business Day (except
as otherwise provided in Sections 401(a) and 402(d)), with the same force and
effect as though made on the date fixed for such payment, and no distribution
shall accumulate thereon for the period after such date.
Section 1006. SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant Trustee,
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article Ten of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
Section 1007. HEADINGS.
The Article and Section headings are for convenience only and
shall not affect the construction of this Trust Agreement.
Section 1008. REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Securityholder or the Depositor may be given or served in writing
by deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Public Service
Company of Oklahoma, c/o Central and South West Corporation, 1616 Woodall
Rodgers Freeway, Dallas, Texas 75202, Attention: Director, Finance, facsimile
no: (214) 777-1223. Any notice to Preferred Securityholders shall also be given
to such owners as have, within two years preceding the giving of such notice,
filed their names and addresses with the Property Trustee for that purpose. Such
notice, demand or other communication to or upon a Securityholder shall be
deemed to have been sufficiently given or made, for all purposes, upon hand
delivery, mailing or transmission.
Any notice, demand or other communication which by any provision
of this Trust Agreement is required or permitted to be given or served to or
upon the Trust, the Property Trustee or the Administrative Trustees shall be
given in writing addressed (until another address is published by the Trust) as
follows: (a) with respect to the Property Trustee to The Bank of New York, 101
Barclay Street, New York, New York 10286, Attention: Corporate Trust Trustee
Administration; (b) with respect to the Delaware Trustee, to 23 White Clay
Center, Newark, New Castle County, Delaware 19711, Attention: Corporate Trust
Trustee Administration; and (c) with respect to the Administrative Trustees, to
them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of PSO Capital I." Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Trust or the Property Trustee.
Section 1009. AGREEMENT NOT TO PETITION.
Each of the Trustees and the Depositor agree for the benefit of
the Securityholders that, until at least one year and one day after the Trust
has been terminated in accordance with Article IX, they shall not file, or join
in the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 1009, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor (which expense shall be paid prior to the filing), it shall
file an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by the Depositor against the Trust or the commencement
of such action and raise the defense that the Depositor has agreed in writing
not to take such action and should be stopped and precluded therefrom. The
provisions of this Section 1009 shall survive the termination of this Trust
Agreement.
Section 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE
ACT.
(a) This Trust Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Trust Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control. If any provision of this Trust Agreement modifies or
excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Trust Agreement
as so modified or to be excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 1011. ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE
AND INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
Section 1012. COUNTERPARTS.
This Trust Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all counterparts shall together constitute but one and the same instrument.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By: _________________________________
Name: [ ]
Title: Treasurer
THE BANK OF NEW YORK
as Property Trustee
By: _________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
as Delaware Trustee
By: _________________________________
Name:
Title:
as Administrative Trustee
as Administrative Trustee
EXHIBIT A
CERTIFICATE OF TRUST
OF
PSO CAPITAL I
THIS CERTIFICATE OF TRUST of PSO Capital I (the "Trust"), dated
________ __, 1997, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801 et seq.).
1. Name. The name of the business trust being formed hereby
is PSO Capital I.
2. Delaware Trustee. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), 23 White Clay Center, Newark, New Castle County,
Delaware 19711.
3. Counterparts. This Certificate of Trust may be executed in
one or more counterparts, all of which together constitute one and the same
instrument.
4. Effective Date. This Certificate of Trust shall be effective
as of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK,
as Trustee
By __________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE)
as Trustee
BY
Name:
Title:
Wendy G. Hargus, not in her individual
capacity, but solely as Administrative
Trustee
EXHIBIT B
________, 1997
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099.
Attention:[ ]
General Counsel's Office
Re: PSO Capital I Trust Originated
PREFERRED SECURITIES, SERIES A
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters
relating to the issuance and deposit with The Depository Trust Company
("DEPOSITORY TRUST COMPANY") of PSO Capital I [ ]% Trust Originated Preferred
Securities, Series A (the "Preferred Securities"), of PSO Capital I, a Delaware
business trust (the "Issuer"), created pursuant to a Trust Agreement between
Public Service Company of Oklahoma, an Oklahoma corporation ("PSO"), The Bank of
New York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee and the Administrative Trustees named therein. The payment of
distributions on the Preferred Securities and payments due upon liquidation of
Issuer or redemption of the Preferred Securities, to the extent the Issuer has
funds available for the payment thereof, are guaranteed by PSO to the extent set
forth in a Guarantee Agreement dated [ ], 1997 by PSO with respect to the
Preferred Securities. PSO and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated [ ], 1997 by and among the Underwriters, the Issuer
and PSO, and the Underwriters wish to take delivery of the Preferred Securities
through DEPOSITORY TRUST COMPANY. The Bank of New York acting as transfer agent
and registrar with respect to the Preferred Securities (the "Transfer Agent and
Registrar").
To induce DEPOSITORY TRUST COMPANY to accept the Preferred
Securities as eligible for deposit at DEPOSITORY TRUST COMPANY, and to act in
accordance with DEPOSITORY TRUST COMPANY's rules with respect to the Preferred
Securities, the Issuer, the Transfer Agent and Registrar and DEPOSITORY TRUST
COMPANY agree among each other as follows:
1. Prior to the closing of the sale of the Preferred Securities
to the Underwriters, which is expected to occur on or about [ ], 1997, there
shall be deposited with DEPOSITORY TRUST COMPANY one or more global certificates
(individually and collectively, the "Global Certificate") registered in the name
of DEPOSITORY TRUST COMPANY's Preferred Securities nominee, Cede & Co.,
representing an aggregate of [ ] Preferred Securities and bearing the following
legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DEPOSITORY TRUST COMPANY"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative
of DEPOSITORY TRUST COMPANY (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized
representative of DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.
2. The Amended and Restated Trust Agreement of the Issuer
provides for the voting by holders of the Preferred Securities under certain
limited circumstances. The Issuer shall establish a record date for such
purposes and shall, to the extent possible, give DEPOSITORY TRUST COMPANY notice
of such record date not less than 15 calendar days in advance of such record
date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DEPOSITORY TRUST COMPANY a notice of
such event at least 5 business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of
rights with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DEPOSITORY TRUST COMPANY a notice
specifying: (a) the amount of and conditions, if any, applicable to the payment
of any such distribution or any such offering or issuance of rights; (b) any
applicable expiration or deadline date, or any date by which any action on the
part of the holders of Preferred Securities is required; and (c) the date any
required notice is to be mailed by or on behalf of the Issuer to holders of
Preferred Securities or published by or on behalf of the Issuer (whether by mail
or publication, the "Publication Date"). Such notice shall be sent to DEPOSITORY
TRUST COMPANY by a secure means (E.G., legible telecopy, registered or certified
mail, overnight delivery) in a timely manner designed to assure that such notice
is in DEPOSITORY TRUST COMPANY's possession no later than the close of business
on the business day before the Publication Date. The Issuer or the Transfer
Agent and Registrar will forward such notice either in a separate secure
transmission for each CUSIP number or in a secure transmission of multiple CUSIP
numbers (if applicable) that includes a manifest or list of each CUSIP number
submitted in that transmission. (The party sending such notice shall have a
method to verify subsequently the use of such means and the timeliness of such
notice.) The Publication Date shall be not less than 30 calendar days nor more
than 60 calendar days prior to the payment of any such distribution or any such
offering or issuance of rights with respect to the Preferred Securities. After
establishing the amount of payment to be made on the Preferred Securities, the
Issuer or the Transfer Agent and Registrar will notify DEPOSITORY TRUST
COMPANY's Dividend Department of such payment 5 business days prior to payment
date. The notices provided for in this paragraph shall be sent as described in
Section 9.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DEPOSITORY TRUST COMPANY not less than 30 calendar days prior to
such event by a secure means in the manner set forth in paragraph 4. Such
redemption notice shall be sent to DEPOSITORY TRUST COMPANY's Call Notification
Department at (516) 227-4164 or (516) 227-4190, and receipt of such notice shall
be confirmed by telephoning (516) 227-4070. Notice by mail or by any other means
shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred
Securities, notice specifying the terms of the tender and the Publication Date
of such notice shall be sent by the Issuer or the Transfer Agent and Registrar
to DEPOSITORY TRUST COMPANY by a secure means and in a timely manner as
described in paragraph 4. Notices to DEPOSITORY TRUST COMPANY pursuant to this
paragraph and notices of other corporate actions (including mandatory tenders,
exchanges and capital changes), shall be sent, unless notification to another
department is expressly provided for herein, by telecopy to DEPOSITORY TRUST
COMPANY's Reorganization Department at (212) 709-1093 or (212) 709-1094 and
receipt of such notice shall be confirmed by telephoning (212) 709-6884, or by
mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DEPOSITORY TRUST
COMPANY shall contain the CUSIP number or numbers of the Preferred Securities
and the accompanying designation of the Preferred Securities, which, as of the
date of this letter, is "PSO Capital I [ ]% Trust Originated Preferred
Securities, Series A."
8. The Issuer or the Transfer Agent and Registrar shall provide
automated notification of CUSIP-level detail for Distribution payments to
DEPOSITORY TRUST COMPANY no later than noon (Eastern Time) on the payment date.
9. Distribution payments shall be received by Cede & Co. as
nominee of DEPOSITORY TRUST COMPANY, or its registered assigns, in same-day
funds or the equivalent no later than 2:30 p.m. (Eastern Time) on each payment
date. Absent any other arrangements between the Issuer and DEPOSITORY TRUST
COMPANY, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000128
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
The Issuer or the Transfer Agent and Registrar shall provide Distribution
payment information to a standard announcement service subscribed to by
DEPOSITORY TRUST COMPANY. In the unlikely event that no such service exists, the
Issuer agrees that it or the Transfer Agent and Registrar shall provide this
information directly to DEPOSITORY TRUST COMPANY in advance of the Distribution
payment date as soon as the information is available. This information should be
conveyed directly to DEPOSITORY TRUST COMPANY electronically. If electronic
transmission is not available, such information should be sent by telecopy to
DEPOSITORY TRUST COMPANY's Dividend Department at (212) 709-1723 or (212)
709-1686, and receipt of such notices shall be confirmed by telephoning (212)
709-1270. Notices to DEPOSITORY TRUST COMPANY pursuant to the above by mail or
by any other means shall be sent to:
Manager: Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
10. DEPOSITORY TRUST COMPANY shall receive maturity and
redemption payments and CUSIP-level detail on the payable date in same day funds
by 2:30 p.m. (Eastern Time). Absent any other arrangements between the Transfer
Agent and Registrar and DEPOSITORY TRUST COMPANY, such payments shall be wired
as follows:
The Chase Manhattan Bank
ABA 021000128
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth in
DEPOSITORY TRUST COMPANY's SDFS PAYING AGENT OPERATING PROCEDURES, a copy of
which has previously been furnished to the Transfer Agent and Registrar.
11. DEPOSITORY TRUST COMPANY shall receive all reorganization
payments and CUSIP-level detail resulting from corporation actions (such as
tender offers or mergers) on the first payable date in same-day funds by 2:30
p.m. (Eastern Time). Absent any other arrangements between the Transfer Agent
and Registrar and DEPOSITORY TRUST COMPANY, such payments shall be wired as
follows:
The Chase Manhattan Bank
ABA 021000128
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DEPOSITORY TRUST COMPANY may by prior written notice direct
the Issuer and the Transfer Agent and Registrar to use any other telecopy number
or address of DEPOSITORY TRUST COMPANY as the number or address to which notices
or payments may be sent.
13. In the event of a conversion, redemption, or any other
similar transaction (E.G., tender made and accepted in response to the Issuer's
or the Transfer Agent and Registrar's invitation) necessitating a reduction in
the aggregate number of Preferred Securities outstanding evidenced by the Global
Certificate, DEPOSITORY TRUST COMPANY, in its discretion: (a) may request the
Issuer or the Transfer Agent and Registrar to issue and countersign a new Global
Certificate; or (b) may make an appropriate notation on the Global Certificate
indicating the date and amount of such reduction.
14. DEPOSITORY TRUST COMPANY may discontinue its services as a
securities depositary with respect to the Preferred Securities at any time by
giving at least 90 days' prior written notice to the Issuer and the Transfer
Agent and Registrar (at which time DEPOSITORY TRUST COMPANY will confirm with
the Issuer or the Transfer Agent and Registrar the aggregate number of Preferred
Securities deposited with it) and discharging its responsibilities with respect
thereto under applicable law. Under such circumstances, the Issuer may determine
to make alternative arrangements for book-entry settlement for the Preferred
Securities, make available one or more separate global certificates evidencing
Preferred Securities to any Participant having Preferred Securities credited to
its DEPOSITORY TRUST COMPANY account, or issue definitive Preferred Securities
to the beneficial holders thereof, and in any such case, DEPOSITORY TRUST
COMPANY agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
15. In the event that the Issuer determines that beneficial
owners of Preferred Securities shall be able to obtain definitive Preferred
Securities, the Issuer or the Transfer Agent and Registrar shall notify
DEPOSITORY TRUST COMPANY of the availability of certificates. In such event, the
Issuer or the Transfer Agent and Registrar shall issue, transfer and exchange
certificates in appropriate amounts, as required by DEPOSITORY TRUST COMPANY and
others, and DEPOSITORY TRUST COMPANY agrees to cooperate fully with the Issuer
and the Transfer Agent and Registrar and to return the Global Certificate, duly
endorsed for transfer as directed by the Issuer or the Transfer Agent and
Registrar, together with any other documents of transfer reasonably requested by
the Issuer or the Transfer Agent and Registrar.
16. The Issuer: (a) understands that DEPOSITORY TRUST COMPANY has
no obligation to, and will not, communicate to its Participants or to any person
having an interest in the Preferred Securities any information contained in the
Preferred Security certificate(s); and (b) acknowledges that neither DEPOSITORY
TRUST COMPANY's Participants nor any person having an interest in the Preferred
Securities shall be deemed to have notice of the provisions of the Preferred
Security certificate(s) by virtue of submission of such certificate(s) to
DEPOSITORY TRUST COMPANY.
17. This letter may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of PSO Capital I.
Very truly yours,
PSO CAPITAL I
(As Issuer)
By
Name: [ ]
Title: Administrative Trustee
THE BANK OF NEW YORK,
AS PROPERTY TRUSTEE
(As Transfer Agent and Registrar)
By:
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By
Authorized Officer
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-1
Certificate Evidencing Common Securities
of
PSO Capital I
[ ]% Common Securities
(liquidation amount $25 per Common Security)
PSO Capital I, a statutory business trust created under the laws
of the State of Delaware (the "Trust") hereby certifies that Public Service
Company of Oklahoma (the "Holder") is the registered owner of
______________________________________ (_______________) common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
and designated the [ ]% Common Securities (liquidation amount $25 per Common
Security) (the "Common Securities"). In accordance with Section 510 of the Trust
Agreement (as defined below) the Common Securities are not transferable and any
attempted transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of [ ], 1997, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of the Common Securities as
set forth therein. The Trust will furnish a copy of the Trust Agreement to the
Holder without charge upon written request to the Trust at its principal place
of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate this ________ day of ______, _____.
PSO CAPITAL I
By:
Name:
Administrative Trustee
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of [ ], 1997, between Public Service Company
of Oklahoma, an Oklahoma corporation ("PSO"), and PSO Capital I, a Delaware
business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the
"Common Securities") to, and receive Debentures (as defined in the Trust
Agreement) from, PSO and to issue and sell [ ]% Trust Originated Preferred
Securities, Series A (the "Preferred Securities") with such powers, preferences
and special rights and restrictions as are set forth in the Amended and Restated
Trust Agreement of the Trust dated as of [ ], 1997 as the same may be amended
from time to time (the "Trust Agreement");
WHEREAS, PSO will directly or indirectly own all of the Common
Securities of Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder
of the Preferred Securities, which purchase PSO hereby agrees shall benefit PSO
and which purchase PSO acknowledges will be made in reliance upon the execution
and delivery of this Agreement, PSO, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.1. GUARANTEE BY PSO.
Subject to the terms and conditions hereof, PSO, including in its
capacity as holder of the Common Securities, hereby irrevocably and
unconditionally guarantees to each person or entity to whom the Trust is now or
hereafter becomes indebted or liable (the "Beneficiaries") the full payment,
when and as due, of any and all Obligations (as hereinafter defined) to such
Beneficiaries. As used herein, "Obligations" means any costs, expenses or
liabilities of the Trust, other than obligations of the Trust to pay to holders
of any Preferred Securities or other similar interests in the Trust the amounts
due such holders pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
Section 1.2. TERM OF AGREEMENT.
This Agreement shall terminate and be of no further force and
effect upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; PROVIDED, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Preferred Securities or any Beneficiary must restore payment
of any sums paid under the Preferred Securities, under any Obligation, under the
Guarantee Agreement dated the date hereof by PSO and The Bank of New York as
guarantee trustee or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.3. WAIVER OF NOTICE.
PSO hereby waives notice of acceptance of this Agreement and of
any Obligation to which it applies or may apply, and PSO hereby waives
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
Section 1.4. NO IMPAIRMENT.
The obligations, covenants, agreements and duties of PSO under
this Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or
any portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part
of the Beneficiaries to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Trust or any of the
assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, PSO with respect to the happening of any of the foregoing.
Section 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against PSO and
PSO waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against PSO.
ARTICLE II
Section 2.1. BINDING EFFECT.
All guarantees and agreements contained in this Agreement shall
bind the successors, assigns, receivers, trustees and representatives of PSO and
shall inure to the benefit of the Beneficiaries.
Section 2.2. AMENDMENT.
So long as there remains any Beneficiary or any Preferred
Securities of any series are outstanding, this Agreement shall not be modified
or amended in any manner adverse to such Beneficiary or to the holders of the
Preferred Securities.
Section 2.3. NOTICES.
Any notice, request or other communication required or permitted
to be given hereunder shall be given in writing by delivering the same against
receipt therefor by facsimile transmission (confirmed by mail), telex or by
registered or certified mail, addressed as follows (and if so given, shall be
deemed given when mailed or upon receipt of an answer-back, if sent by telex):
PSO Capital I
c/o The Bank of New York
101 Barclay Street
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Public Service Company of Oklahoma
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
Section 2.4 This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York (without regard
to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above
written.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:
Name: [ ]
Title: Treasurer
PSO CAPITAL I
By:
Name: [ ]
Title: Administrative Trustee
EXHIBIT E
IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT -
This Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository. This
Preferred Security is exchangeable for Preferred Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Trust Agreement (as defined below) and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
PSO Capital I or its agent for registration of transfer, exchange or payment,
and any Preferred Security issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
P-
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
PSO Capital I
[ ]% Trust Originated Preferred Securities,
Series A
(liquidation preference $25 per Preferred Security)
PSO Capital I, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that _____________ (the
"Holder") is the registered owner of ________ (______) preferred securities of
the Trust representing an undivided beneficial interest in the assets of the
Trust and designated PSO Capital I [ ]% Trust Originated Preferred Securities,
Series A (liquidation preference $25 per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in Section
504 of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of [ ], 1997, as the same may be amended from time to time (the
"Trust Agreement"), including the designation of the terms of Preferred
Securities as set forth therein. The Holder is entitled to the benefits of the
Guarantee Agreement entered into by Public Service Company of Oklahoma, an
Oklahoma corporation, and The Bank of New York, as guarantee trustee, dated as
of [ ], 1997 (the "Guarantee"), to the extent provided therein. The Trust will
furnish a copy of the Trust Agreement and the Guarantee to the Holder without
charge upon written request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate this__________ day of ___________, _____.
PSO CAPITAL I
By:
Name:
Title: Administrative Trustee
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
agent to transfer this Preferred Securities Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)
Signature(s) Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCK BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
SEC RULE 17Ad-15.
Exhibit 4(i)
GUARANTEE AGREEMENT
BETWEEN
PUBLIC SERVICE COMPANY OF OKLAHOMA
(AS GUARANTOR)
AND
THE BANK OF NEW YORK
(AS GUARANTEE TRUSTEE)
DATED AS OF
, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 101. Definitions............................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. Trust Indenture Act; Application.......................5
SECTION 202. List of Holders........................................5
SECTION 203. Reports by the Guarantee Trustee.......................5
SECTION 204. Periodic Reports to Guarantee Trustee..................5
SECTION 205. Evidence of Compliance with Conditions Precedent.......6
SECTION 206. Events of Default; Waiver..............................6
SECTION 207. Event of Default; Notice...............................6
SECTION 208. Conflicting Interests..................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. Powers and Duties of the Guarantee Trustee.............7
SECTION 302. Certain Rights of Guarantee Trustee....................8
SECTION 303. Indemnity.............................................10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. Guarantee Trustee; Eligibility........................10
SECTION 402. Appointment, Removal and Resignation of the
Guarantee Trustee...................................11
ARTICLE V
GUARANTEE
SECTION 501. Guarantee.............................................11
SECTION 502. Waiver of Notice and Demand...........................12
SECTION 503. Obligations Not Affected..............................12
SECTION 504. Rights of Holders.....................................13
SECTION 505. Guarantee of Payment..................................13
SECTION 506. Subrogation...........................................13
SECTION 507. Independent Obligations...............................13
PAGE
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. Subordination.........................................14
SECTION 602. Pari Passu Guarantees.................................14
ARTICLE VII
TERMINATION
SECTION 701. Termination...........................................14
ARTICLE VIII
MISCELLANEOUS
SECTION 801. Successors and Assigns................................14
SECTION 802. Amendments............................................15
SECTION 803. Notices...............................................15
SECTION 804. Benefit...............................................16
SECTION 805. Interpretation........................................16
SECTION 806. Governing Law.........................................17
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
OF 1939, AS AMENDED AGREEMENT
310(a).......................................................... 401(a)
310(b).......................................................... 401(c), 208
310(c).......................................................... Inapplicable
311(a).......................................................... 202(b)
311(b).......................................................... 202(b)
311(c).......................................................... Inapplicable
312(a).......................................................... 202(a)
312(b).......................................................... 202(b)
313............................................................. 203
314(a).......................................................... 204
314(b).......................................................... Inapplicable
314(c).......................................................... 205
314(d).......................................................... Inapplicable
314(e).......................................................... 101, 205, 302
314(f).......................................................... 201, 302
315(a).......................................................... 301(d)
315(b).......................................................... 207
315(c).......................................................... 301
315(d).......................................................... 301(d)
316(a).......................................................... 101, 206, 504
316(b).......................................................... 503
316(c).......................................................... 802
317(a).......................................................... Inapplicable
317(b).......................................................... Inapplicable
318(a).......................................................... 201(b)
318(b).......................................................... 201
318(c).......................................................... 201(b)
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of , 1997, is executed and
delivered by Public Service Company of Oklahoma, an Oklahoma corporation (the
"Guarantor"), and The Bank of New York, a New York banking corporation organized
under the laws of the State of New York, as trustee (the "Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of PSO Capital [ ], a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of , 1997 among the Issuer Trustees named therein,
the Guarantor, as Depositor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing
__________ of its ___% Cumulative Quarterly Income Preferred Securities, Series
A (liquidation preference $25 per preferred security) (the "Preferred
Securities") representing preferred undivided beneficial interests in the assets
of the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer
and the proceeds thereof, together with the proceeds from the issuance of the
Issuer's Common Securities (as defined below), will be used to purchase the
Debentures (as defined in the Trust Agreement) of the Guarantor which will be
deposited with The Bank of New York, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder
of Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
ARTICLE I
DEFINITIONS
SECTION 101. DEFINITIONS.
As used in this Guarantee Agreement, the terms set forth below
shall, unless the context otherwise requires, have the following meanings.
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person, PROVIDED, HOWEVER, that an Affiliate
of the Guarantor shall not be deemed to include the Issuer. For the purposes of
this definition, "CONTROL" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "CONTROLLING" and "CONTROLLED" have meanings
correlative to the foregoing.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Debt" means, with respect to any Person, whether recourse is to
all or a portion of the assets of such Person and whether or not contingent, (i)
every obligation of such Person for money borrowed; (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; PROVIDED, HOWEVER,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Issuer: (i) any accumulated
and unpaid Distributions (as defined in the Trust Agreement) required to be paid
on the Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor at
the date of redemption, and (iii) upon a voluntary or involuntary termination,
winding-up or liquidation of the Issuer, unless Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the liquidation preference of
$25 per Preferred Security plus accumulated and unpaid Distributions on the
Preferred Securities to the date of payment to the extent the Issuer shall have
funds on hand available to make such payment at such time and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; PROVIDED, HOWEVER, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor, the Guarantee Trustee or any Affiliate of the
Guarantor or the Guarantee Trustee.
"Indenture" means the Indenture dated as of , 1997 relating to
Junior Subordinated Debentures of the Guarantor, as supplemented and amended
between the Guarantor and The Bank of New York, as trustee.
"List of Holders" has the meaning specified in Section 202(a).
"Majority in liquidation preference of the Preferred Securities"
means, except as provided by the Trust Indenture Act, a vote by the Holder(s),
voting separately as a class, of more than 50% of the liquidation preference of
all then outstanding Preferred Securities issued by the Issuer.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chairman, President, General Manager, the Treasurer,
an Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary
of such Person, and delivered to the Guarantee Trustee. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by the officer in rendering the Officer's
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any Senior Vice President, any Vice President, any Assistant Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant
Treasurer, any Trust Officer or Assistant Trust Officer or any other officer of
the Corporate Trust Department of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Senior Indebtedness" means the principal of, and premium, if
any, and interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of this Guarantee or thereafter
incurred, created or assumed: (a) all indebtedness of the Guarantor evidenced by
notes, debentures, bonds or other securities sold by the Guarantor for money,
(b) all indebtedness of others of the kinds described in the preceding clause
(a) assumed by or guaranteed in any manner by the Guarantor or in effect
guaranteed by the Guarantor through an agreement to purchase, contingent or
otherwise, (c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) and (b) and (d) any
payment of money relating to any lease which is capitalized on the balance sheet
or consolidated balance sheet, as the case may be, of the Guarantor, in
accordance with generally accepted accounting principles as in effect from time
to time, unless, in the case of any particular indebtedness, renewal, extension,
refunding or lease payment, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, renewal, extension, refunding or lease payment is not superior in
right of payment to or is PARI PASSU with this Guarantee. Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions set forth in Article VI of this
Guarantee irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 401.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 201. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this
Guarantee Agreement and shall, to the extent applicable, be
governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed
by Sections 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.
SECTION 202. LIST OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before January 15 and
July 15 of each year, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of a date not more than 15 days
prior to the delivery thereof, and (b) at such other times as the
Guarantee Trustee may request in writing, within 30 days after
the receipt by the Guarantor of any such request, a List of
Holders as of a date not more than 15 days prior to the time such
list is furnished, in each case to the extent such information is
in the possession or control of the Guarantor and is not
identical to a previously supplied list of Holders or has not
otherwise been received by the Guarantee Trustee in its capacity
as such. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 203. REPORTS BY THE GUARANTEE TRUSTEE.
Not later than __________ of each year, commencing __________,
1998, the Guarantee Trustee shall provide to the Holders such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 204. PERIODIC REPORTS TO GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee, the
Securities and Exchange Commission and the Holders such documents, reports and
information, if any, as required by Section 314 of the Trust Indenture Act and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 205. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with such conditions precedent, if any, provided for in
this Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officer's Certificate.
SECTION 206. EVENTS OF DEFAULT: WAIVER.
The Holders of a Majority in liquidation preference of the
Preferred Securities may, by vote, on behalf of the Holders, waive any past
Event of Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Guarantee Agreement, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 207. EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders, notices of all Events of Default
known to the Guarantee Trustee, unless such defaults have been
cured before the giving of such notice, provided, that, except in
the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice
if and so long as the Board of Directors, the executive committee
or a trust committee of directors and/or Responsible Officers of
the Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have
received written notice, or a Responsible Officer charged with
the administration of the Trust Agreement shall have obtained
written notice, of such Event of Default.
SECTION 208. CONFLICTING INTERESTS.
The Trust Agreement shall be deemed to be specifically described
in this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 301. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee
shall not transfer this Guarantee Agreement to any Person except
a Holder exercising his or her rights pursuant to Section 504(iv)
or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the
Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee, upon acceptance by such Successor Guarantee
Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the
benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee Agreement, and no
implied covenants shall be read into this Guarantee Agreement
against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section
206), the Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for failure to act
or willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee Agreement,
and the Guarantee Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any provision hereof
or of the Trust Indenture Act are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee Trustee,
unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
preference of the Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee Agreement or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 302. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 301:
(i) The Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated
by this Guarantee Agreement shall be sufficiently evidenced by an Officer's
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely upon
an Officer's Certificate which, upon receipt of such request from the Guarantee
Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel
of its choice, and the written advice or opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it hereunder
in good faith and in accordance with such advice or opinion. Such legal counsel
may be legal counsel to the Guarantor or any of its Affiliates and may be one of
its employees. The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee; provided that
nothing contained in this Section 302(a)(v) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the Holders,
(B) may refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (C) shall be protected in acting in
accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 303. INDEMNITY.
The Guarantor agrees to indemnify the Guarantee Trustee for, and
to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Guarantee Trustee, arising out of or
in connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 401. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section 310
(a) of the Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of this Section and
to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 401(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 402(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 402. APPOINTMENT, REMOVAL AND RESIGNATION OF THE
GUARANTEE TRUSTEE.
(a) Subject to Section 402(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 402 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 501. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer), as and when due, regardless of
any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 502. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 503. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as so provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 503 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 504. RIGHTS OF HOLDERS.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation preference of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other Person.
SECTION 505. GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not
of collection. This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer) or upon distribution of Debentures to Holders as provided in
the Trust Agreement.
SECTION 506. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 501; PROVIDED, HOWEVER, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 507. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 503 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 601. SUBORDINATION.
This Guarantee Agreement will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment to all
Senior Indebtedness of the Guarantor.
SECTION 602. PARI PASSU GUARANTEES.
This Guarantee Agreement shall rank pari passu with any similar
Guarantee Agreements issued by the Guarantor on behalf of the holders of
Preferred Securities issued by PSO Capital [ ].
ARTICLE VII
TERMINATION
SECTION 701. TERMINATION.
This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debentures to the Holders in exchange for
all of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 801. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Ten of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.
SECTION 802. AMENDMENTS.
Except with respect to any changes which do not adversely affect
the rights of the Holders in any material respect (in which case no consent of
the Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Holders of not less than a Majority in liquidation
preference of the Preferred Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of the Holders shall apply to the giving of
such approval.
SECTION 803. NOTICES.
Any notice, request or other communication required or permitted
to be given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth
below or such other address as the Guarantor may give notice of to the Holders:
Public Service Company of Oklahoma
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
(b) if given to the Issuer, in care of the Guarantee
Trustee, at the Issuer's (and the Guarantee Trustee's) address set forth below
or such other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:
PSO Capital [ ]
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Facsimile No: (214) 777-1223
Attention: Director, Finance
with a copy to:
The Bank of New York
101 Barclay Street
21 West
New York, NY 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Trustee Administration
(c) if given to any Holder, at the address set forth on
the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 804. BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders
and is not separately transferable from the Preferred Securities.
SECTION 805. INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 101;
(b) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 806. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:
Name:
Title: Treasurer
THE BANK OF NEW YORK, as Guarantee Trustee
By:
Name:
Title:
Exhibit 5(a)
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
February 5, 1997
Public Service Company of Oklahoma
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
PSO Capital I
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
PSO Capital II
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Re: Registration Statement on Form S-3 of
Public Service Company of Oklahoma
Ladies and Gentlemen:
We are acting as special counsel to Public Service Company of
Oklahoma, an Oklahoma corporation (the "Company"), in connection with the
proposed issuance and sale by the Company from time to time of up to $75 million
aggregate principal amount of the Company's Junior Subordinated Debentures (the
"Debentures"), to be issued in one or more series pursuant to an indenture
between the Company and The Bank of New York, as Trustee (the "Indenture"), and
the proposed public offering by PSO Capital I and PSO Capital II, each a
business trust created under the laws of the State of Delaware (collectively,
the "Issuer Trusts"), from time to time in one or more series, of an amount not
to exceed $75 million of preferred securities, representing preferred undivided
beneficial interests in the assets of such Issuer Trusts (the "Preferred
Securities"), all as contemplated by the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by the Company and the Issuer Trusts with
the Securities and Exchange Commission (the "Commission") for the registration
of the Debentures and Preferred Securities under the Securities Act of 1933, as
amended (the "Act") and their sale pursuant to one or more underwriting
agreements filed as an exhibit to the Registration Statement (each, an
"Underwriting Agreement"). Capitalized terms used herein and not otherwise
defined have the meanings ascribed to them in the Registration Statement.
As described in the Registration Statement, the Company may issue the
Debentures to (a) the public or institutional investors or (b) the Issuer Trusts
in connection with the issuance of Preferred Securities. If Preferred Securities
are issued by the Issuer Trusts, the proceeds therefrom, together with the
capital contribution of the Company, as owner of the common securities of each
Issuer Trust, will be used to purchase Debentures. The Company will guarantee
pursuant to a Guarantee Agreement between the Company and The Bank of New York,
as trustee, the payment by each Issuer Trust of distributions that are required
to be made from time to time with respect to the Preferred Securities and of
amounts due upon liquidation of each Issuer Trust or the redemption of the
Preferred Securities (the "Guarantee," or when referred to collectively, the
"Guarantees"), all to the extent such Issuer Trust has funds available therefor
as set forth in the Guarantees. The Preferred Securities are to be issued by
each Issuer Trust pursuant to a Trust Agreement, each as amended and restated.
We have examined originals, or copies certified to our satisfaction,
of such corporate records of the Company and the Issuer Trusts, certificates of
public officials, certificates of officers and representatives of the Company
and the Issuer Trusts and other documents, as we have deemed it necessary to
require as a basis for the opinions hereinafter expressed. In our examination we
have assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity with the originals of
all documents submitted to us as copies. As to various questions of fact
material to such opinions we have, when relevant facts were not independently
established, relied upon certifications by officers of the Company and other
appropriate persons and statements contained in the Registration Statement.
Based on the foregoing, and having regard to legal considerations we
deem relevant, we are of the opinion that when the Indenture has been duly
authorized, executed and delivered by the Company and duly executed and
delivered by The Bank of New York, as Trustee, when the supplemental indenture
with respect to a series of Debentures has been duly authorized, executed and
delivered, when the Guarantee Agreement relating to the Guarantee with respect
to a series of Preferred Securities has been duly authorized, executed and
delivered, when the Amended and Restated Trust Agreement of the Issuer Trust
issuing the Preferred Securities has been duly authorized, executed and
delivered, and when the Debentures and Preferred Securities of such series have
been duly authorized, executed, and, in the case of the Debentures,
authenticated, and issued in accordance with the terms of the Indenture and the
applicable supplemental indenture and delivered against payment therefor in
accordance with the terms of the applicable Underwriting Agreement, the
Debentures of such series and the Guarantee relating to such series of Preferred
Securities of such Issuer Trust, will constitute legal, valid and binding
obligations of the Company, entitled to the benefits of, and subject to the
provisions of, the Indenture and the applicable supplemental indenture, and the
Guarantee Agreement, except (i) as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws of general
applicability affecting the enforcement of creditors' rights and (ii) that such
enforceability may be limited by the application of general principals of equity
(regardless of whether considered in a proceeding in equity or at law),
including without limitation (x) the possible unavailability of specific
performance, injunctive relief or any other equitable remedies and (y) concepts
of materiality, reasonableness, good faith and fair dealing.
We do not express any opinion as to matters governed by any laws other
than the Federal laws of the United States and the laws of the State of New
York, and we are expressing no opinion as to the effects of the laws of any
other jurisdiction.
We hereby consent to the use of this opinion as Exhibit 5(a) to the
Registration Statement and further consent to the use of our name in the
Registration Statement, and any amendment thereto, and in the preliminary
Prospectus and the preliminary Prospectus Supplement constituting a part
thereof.
Very truly yours,
/s/ MILBANK, TWEED, HADLEY & McCLOY
Exhibit 5(b)
RICHARDS, LAYTON & FINGER
February 5, 1997
PSO Capital One
c/o Public Service Company of Oklahoma
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Re: PSO CAPITAL I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Public Service Company
of Oklahoma, an Oklahoma corporation (the "Company"), and PSO Capital I, a
Delaware business trust (the "Trust" ), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated January 29, 1997 as
filed with the office of the Secretary of State of the State of Delaware (the
"Secretary of State") on January 29, 1997;
(b) The Trust Agreement of the Trust, dated as of January 29, 1997
between the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a prospectus and prospectus supplement with respect to the
Trust (collectively, the "Prospectus"), relating to the Trust Originated
Preferred Securities of the Trust representing preferred undivided beneficial
interests in the assets of the Trust (each, a "Security" and collectively, the
"Securities"), filed by the Company and the Trust with the Securities and
Exchange Commission on or about February 5, 1997;
(d) A form of Amended and Restated Trust Agreement for the Trust, to
be entered into between the Company, the trustees of the Trust named therein,
and the holders, from time to time, of the undivided beneficial interests in the
assets of the Trust (including Exhibits C and E thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated February 4,
1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (e) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (e) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent with
the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate of Trust are in full force and effect and have not
been amended, (ii) except to the extent provided in paragraph 1 below, the due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Security is to be issued by the Trust (collectively, the "Security Holders")
of a certificate for such Security in the form prescribed by the Trust Agreement
and the payment for such Security, in accordance with the Trust Agreement and
the Registration Statement, and (vii) that the Securities are issued and sold to
the Security Holders in accordance with the Trust Agreement and the Registration
Statement. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Securities of the Trust will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Security Holders, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We note that the Security Holders may be obligated to
make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus and "Legal Opinions" in the Prospectus. In giving the foregoing
consents, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
Exhibit 5(c)
RICHARDS, LAYTON & FINGER
February 5, 1997
PSO Capital One
c/o Public Service Company of Oklahoma
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Re: PSO CAPITAL II
Ladies and Gentlemen:
We have acted as special Delaware counsel for Public Service Company
of Oklahoma, an Oklahoma corporation (the "Company"), and PSO Capital II, a
Delaware business trust (the "Trust" ), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated January 29, 1997 as
filed with the office of the Secretary of State of the State of Delaware (the
"Secretary of State") on January 29, 1997;
(b) The Trust Agreement of the Trust, dated as of January 29, 1997
between the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a prospectus and prospectus supplement with respect to the
Trust (collectively, the "Prospectus"), relating to the Trust Originated
Preferred Securities of the Trust representing preferred undivided beneficial
interests in the assets of the Trust (each, a "Security" and collectively, the
"Securities"), filed by the Company and the Trust with the Securities and
Exchange Commission on or about February 5, 1997;
(d) A form of Amended and Restated Trust Agreement for the Trust, to
be entered into between the Company, the trustees of the Trust named therein,
and the holders, from time to time, of the undivided beneficial interests in the
assets of the Trust (including Exhibits C and E thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated February 4,
1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (e) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (e) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent with
the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate of Trust are in full force and effect and have not
been amended, (ii) except to the extent provided in paragraph 1 below, the due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Security is to be issued by the Trust (collectively, the "Security Holders")
of a certificate for such Security in the form prescribed by the Trust Agreement
and the payment for such Security, in accordance with the Trust Agreement and
the Registration Statement, and (vii) that the Securities are issued and sold to
the Security Holders in accordance with the Trust Agreement and the Registration
Statement. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Securities of the Trust will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Security Holders, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We note that the Security Holders may be obligated to
make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus and "Legal Opinions" in the Prospectus. In giving the foregoing
consents, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
EXHIBIT 5(d)
FORM OF DOERNER, SAUNDERS, DANIEL & ANDERSON
OPINION LETTER
February 5, 1997
Public Service Company of Oklahoma
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
PSO Capital I
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
PSO Capital II
c/o Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Re: Registration Statement on Form S-3 of Public Service
Company of Oklahoma
Ladies and Gentlemen:
We are acting as special Oklahoma counsel to Public Service Company of
Oklahoma, an Oklahoma corporation (the "Company"), in connection with the
proposed public offering by the Company from time to time of up to $75 million
aggregate principal amount of the Company's Junior Subordinated Debentures (the
"Debentures") to be issued in one or more series pursuant to an indenture
between the Company and The Bank of New York, as Trustee (the "Indenture"), and
the proposed issuance and sale by PSO Capital I and PSO Capital II, each a
business trust created under the laws of the State of Delaware (collectively,
the "Issuer Trusts"), from time to time in one or more series, not to exceed $75
million, of their preferred securities, representing preferred undivided
beneficial interests in the assets of such Issuer Trusts (the "Preferred
Securities"), all as contemplated by the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by the Company and the Issuer Trusts with
the Securities and Exchange Commission (the "Commission") for the registration
of the Debentures and Preferred Securities under the Securities Act of 1933, as
amended (the "Act"), and their sale pursuant to one or more underwriting
agreements filed as an exhibit to the Registration Statement (each, an
"Underwriting Agreement").
As described in the Registration Statement, the Company may issue the
Debentures to (a) the public or institutional investors or (b) the Issuer Trusts
in connection with the issuance of Preferred Securities. If Preferred Securities
are issued by the Issuer Trusts, the proceeds therefrom, together with the
capital contribution of the Company, as owner of the common securities of each
Issuer Trust, will be used to purchase Debentures. The Company will guarantee
pursuant to a Guarantee Agreement the payment by each Issuer Trust of
distributions with respect to the Preferred Securities and of amounts due upon
liquidation of each Issuer Trust or redemption of the Preferred Securities
(collectively, the "Guarantees"), all to the extent such Issuer Trust has funds
available therefor as set forth in the Guarantees. The Preferred Securities are
to be issued by each Issuer Trust pursuant to a Trust Agreement, each as amended
and restated.
We have examined originals, or copies certified to our satisfaction, or
such corporate records of the Company and the Issuer Trusts, certificates of
public officials, certificates of officers and representatives of the Company
and the Issuer Trusts and other documents as we have deemed necessary as a basis
for the opinions hereinafter expressed. In our examination we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity with the originals of all documents submitted
to us as copies. As to various questions of fact material to such opinions we
have, when relevant facts were not independently established, relied upon
certifications by officers of the Company and other appropriate persons and
statements contained in the Registration Statement.
Based on the foregoing, and having regard to legal considerations we deem
relevant, we are of the opinion that:
1. All requisite action necessary for the due execution and delivery of
the Guarantees will have been taken when the Board of Directors of the Company,
or a committee or officer duly authorized thereby, shall have taken such action
as may be necessary to fix and determine the terms of the Guarantees and the
Guarantees shall have been duly executed and delivered.
2. All requisite action necessary for the due execution and delivery of
the Debentures will have been taken when the Board of Directors of the Company,
or a committee or officer duly authorized thereby, shall have taken such action
as may be necessary to fix and determine the terms of the Debentures, the
Indenture shall have been executed and delivered, and the Debentures shall have
been issued and delivered in exchange for the proceeds from the Preferred
Securities and the capital contribution of the Company.
The opinions expressed above are limited to the laws of the State of
Oklahoma.
We hereby consent to the use of this opinion as Exhibit 5(d) to the
Registration Statement. In giving such consent, we do not thereby admit that we
are within the category of persons whose consent is required pursuant to Section
7 of the Act or rules and regulations of the Securities and Exchange Commission.
Very truly yours,
/s/ DOERNER, SAUNDERS, DANIEL & ANDERSON
Exhibit 8
Christy & Viener
Rockefeller Center
620 Fifth Avenue
New York, New York 10020
February 5, 1997
Public Service Company of Oklahoma
PSO Capital I
212 East Sixth Street
Tulsa, Oklahoma 74119-1212
Ladies and Gentlemen:
We have acted as special tax counsel to you in connection with the
proposed offering by PSO Capital I, a Delaware statutory business trust (the
"Trust"), of its Trust Originated Preferred Securities, Series A (the "Series A
Preferred Securities"), as described in the Registration Statement on Form S-3
(the "Registration Statement"), which is being filed by Public Service Company
of Oklahoma, an Oklahoma corporation (the "Company"), the Trust, and PSO Capital
II, a Delaware statutory business trust, with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended. The Registration
Statement includes the Prospectus and the Prospectus Supplement (collectively,
the "Prospectuses") relating to such offering.
In rendering the opinion expressed below, we have examined the
Prospectuses and such other documents as we have deemed relevant and necessary,
including, without limitation, the Trust Agreement dated as of January 29, 1997,
the Form of the Amended and Restated Trust Agreement, the Form of the Indenture,
the Form of the First Supplemental Indenture, and the Form of the Guarantee
Agreement attached as Exhibits to the Registration Statement. Such opinion is
conditioned, among other things, upon the accuracy and completeness of the
facts, information, and representations contained in the Prospectuses as of the
date hereof and the continuing accuracy and completeness thereof as of the date
of the issuance of the Series A Preferred Securities. We have not undertaken any
independent investigation of any factual matters set forth in the Prospectuses
or such other documents. We have assumed that the transactions contemplated by
the Prospectuses and such other documents will occur as provided therein and
that there will be no material change to the Prospectuses or any of such other
documents between the date hereof and the date of the issuance of the Series A
Preferred Securities.
Based upon and subject to the foregoing, we are of the opinion that
the discussion set forth in the Prospectus Supplement under the caption "CERTAIN
FEDERAL INCOME TAX CONSIDERATIONS" is a fair and accurate summary of the matters
addressed therein, based upon current law and the assumptions stated or referred
to therein.
We assume no obligation to update or supplement this letter to reflect
any facts or circumstances which may hereafter come to our attention with
respect to the opinion expressed above, including any changes in applicable law
which may hereafter occur.
We hereby consent to the filing of this letter as an Exhibit to the
Registration Statement and to the references to our firm under the captions
"CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" and "LEGAL OPINIONS" in the
Prospectus Supplement.
Very truly yours,
/s/ Christy & Viener
Public Service Company of Oklahoma
Ratio of Earnings to Comined Fixed Charges
and Preferred Stock Dividend Requirements
(Unaudited)
<TABLE>
<CAPTION>
12 Months
Ended Year Ended December 31,
-----------------------------------------------------------
Sept. 30, 1996 1995 1994 1993 1992 1991
---------------------------------------------------------------------------
(thousands, except for ratios)
<S> <C> <C> <C> <C> <C> <C>
Operating Income $105,927 $111,769 $98,258 $72,156 $78,096 $86,796
Adjustments:
Federal income taxes 29,841 37,490 27,954 13,554 (835) 18,321
Provision for deferred income taxes (5,054) 2,704 7,779 9,537 21,157 10,133
Deferred investment tax credits (2,785) (2,789) (2,789) (2,838) (2,711) (2,925)
Utility Plant development costs, net of tax (35,552) - - -
Other income and deductions 64 2,274 933 531 (940) (1,667)
Allowance for borrowed and equity
funds used during construction 1,272 3,734 2,513 1,948 740 1,931
Interest portion of financing leases - - - 17 37 34
---------------------------------------------------------------------------
Earnings $93,713 $155,182 $134,648 $94,905 $95,544 $112,623
===========================================================================
Fixed Charges:
Interest on long-term debt $30,334 $29,594 $29,594 $31,410 $30,688 $30,545
Interest on short-term debt and other 5,919 6,355 3,844 2,729 1,646 3,286
Interest portion of financing leases - - - 17 37 34
Preferred stock dividend requirements 970 1,189 1,210 1,224 1,131 1,207
---------------------------------------------------------------------------
$37,223 $37,138 $34,648 $35,380 $33,502 $35,072
===========================================================================
Ratio of earnings to combined fixed
charges and preferred stock dividend
requirements 2.52 4.18 3.89 2.68 2.85 3.21
</TABLE>
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of Public Service Company of
Oklahoma on Form S-3 of our report dated February 28, 1996 incorporated by
reference in the Annual Report on Form 10-K of Public Service Company of
Oklahoma for the year ended December 31, 1995, and to the reference to us
under the headings "Selected Financial Information" and "Experts" in the
Prospectus, included in or made a part of this Registration Statement.
/S/ Arthur Andersen LLP
February 4, 1997
EXHIBIT 25(A)
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(D) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
PUBLIC SERVICE COMPANY OF OKLAHOMA
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
OKLAHOMA 73-0410895
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
212 EAST SIXTH STREET
TULSA, OKLAHOMA 74119-1212
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES(TITLE OF THE INDENTURE
SECURITIES)
================================================================================
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT
HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939
(THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF
NEW YORK (FORMERLY IRVING TRUST COMPANY) AS NOW IN
EFFECT, WHICH CONTAINS THE AUTHORITY TO COMMENCE
BUSINESS AND A GRANT OF POWERS TO EXERCISE CORPORATE
TRUST POWERS. (EXHIBIT 1 TO AMENDMENT NO. 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-6215, EXHIBITS
1A AND 1B TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-21672 AND EXHIBIT 1 TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT
4 TO FORM T-1 FILED WITH REGISTRATION STATEMENT NO.
33-31019.)
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF
THE ACT. (EXHIBIT 6 TO FORM T-1 FILED WITH REGISTRATION
STATEMENT NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR TO THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(D) OF REGULATION S-T
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF
NEW YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF
NEW YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW
YORK, AND STATE OF NEW YORK, ON THE 29TH DAY OF JANUARY, 1997.
THE BANK OF NEW YORK
BY: /S/MARY JANE MORRISSEY
NAME: MARY JANE MORRISSEY
TITLE: VICE PRESIDENT
EXHIBIT 25(B)
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(D) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
PUBLIC SERVICE COMPANY OF OKLAHOMA
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
OKLAHOMA 73-0410895
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
212 EAST SIXTH STREET
TULSA, OKLAHOMA 74119-1212
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
GUARANTEE OF PREFERRED SECURITIES OF
PSO CAPITAL I(TITLE OF THE INDENTURE SECURITIES)
================================================================================
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT
HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939
(THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF
NEW YORK (FORMERLY IRVING TRUST COMPANY) AS NOW IN
EFFECT, WHICH CONTAINS THE AUTHORITY TO COMMENCE
BUSINESS AND A GRANT OF POWERS TO EXERCISE CORPORATE
TRUST POWERS. (EXHIBIT 1 TO AMENDMENT NO. 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-6215, EXHIBITS
1A AND 1B TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-21672 AND EXHIBIT 1 TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT
4 TO FORM T-1 FILED WITH REGISTRATION STATEMENT NO.
33-31019.)
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF
THE ACT. (EXHIBIT 6 TO FORM T-1 FILED WITH REGISTRATION
STATEMENT NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR TO THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(D) OF REGULATION S-T
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF
NEW YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF
NEW YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW
YORK, AND STATE OF NEW YORK, ON THE 29TH DAY OF JANUARY, 1997.
THE BANK OF NEW YORK
BY: /S/MARY JANE MORRISSEY
NAME: MARY JANE MORRISSEY
TITLE: VICE PRESIDENT
EXHIBIT 25(C)
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(D) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
PSO CAPITAL I
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE TO BE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
212 EAST SIXTH STREET
TULSA, OKLAHOMA 74119-1212
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
PREFERRED SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
================================================================================
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT
HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939
(THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF
NEW YORK (FORMERLY IRVING TRUST COMPANY) AS NOW IN
EFFECT, WHICH CONTAINS THE AUTHORITY TO COMMENCE
BUSINESS AND A GRANT OF POWERS TO EXERCISE CORPORATE
TRUST POWERS. (EXHIBIT 1 TO AMENDMENT NO. 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-6215, EXHIBITS
1A AND 1B TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-21672 AND EXHIBIT 1 TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT
4 TO FORM T-1 FILED WITH REGISTRATION STATEMENT NO.
33-31019.)
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF
THE ACT. (EXHIBIT 6 TO FORM T-1 FILED WITH REGISTRATION
STATEMENT NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR TO THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(D) OF REGULATION S-T
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF
NEW YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF
NEW YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW
YORK, AND STATE OF NEW YORK, ON THE 29TH DAY OF JANUARY, 1997.
THE BANK OF NEW YORK
BY: /S/MARY JANE MORRISSEY
NAME: MARY JANE MORRISSEY
TITLE: VICE PRESIDENT
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(D) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
PUBLIC SERVICE COMPANY OF OKLAHOMA
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
OKLAHOMA 73-0410895
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
212 EAST SIXTH STREET
TULSA, OKLAHOMA 74119-1212
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
GUARANTEE OF PREFERRED SECURITIES OF
PSO CAPITAL II(TITLE OF THE INDENTURE SECURITIES)
================================================================================
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT
HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939
(THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF
NEW YORK (FORMERLY IRVING TRUST COMPANY) AS NOW IN
EFFECT, WHICH CONTAINS THE AUTHORITY TO COMMENCE
BUSINESS AND A GRANT OF POWERS TO EXERCISE CORPORATE
TRUST POWERS. (EXHIBIT 1 TO AMENDMENT NO. 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-6215, EXHIBITS
1A AND 1B TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-21672 AND EXHIBIT 1 TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT
4 TO FORM T-1 FILED WITH REGISTRATION STATEMENT NO.
33-31019.)
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF
THE ACT. (EXHIBIT 6 TO FORM T-1 FILED WITH REGISTRATION
STATEMENT NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR TO THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(D) OF REGULATION S-T
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF
NEW YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF
NEW YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW
YORK, AND STATE OF NEW YORK, ON THE 29TH DAY OF JANUARY, 1997.
THE BANK OF NEW YORK
BY: /S/MARY JANE MORRISSEY
NAME: MARY JANE MORRISSEY
TITLE: VICE PRESIDENT
EXHIBIT 25(E)
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(D) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) |__|
THE BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5160382
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
48 WALL STREET, NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
PSO CAPITAL II
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE TO BE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
212 EAST SIXTH STREET
TULSA, OKLAHOMA 74119-1212
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
----------------------
PREFERRED SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
================================================================================
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
NAME ADDRESS
- --------------------------------------------------------------------------------
SUPERINTENDENT OF BANKS OF THE STATE OF 2 RECTOR STREET, NEW YORK,
NEW YORK N.Y. 10006, AND ALBANY, N.Y. 12203
FEDERAL RESERVE BANK OF NEW YORK 33 LIBERTY PLAZA, NEW YORK,
N.Y. 10045
FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, D.C. 20429
NEW YORK CLEARING HOUSE ASSOCIATION NEW YORK, NEW YORK 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
YES.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
NONE.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT
HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939
(THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE.
1. A COPY OF THE ORGANIZATION CERTIFICATE OF THE BANK OF
NEW YORK (FORMERLY IRVING TRUST COMPANY) AS NOW IN
EFFECT, WHICH CONTAINS THE AUTHORITY TO COMMENCE
BUSINESS AND A GRANT OF POWERS TO EXERCISE CORPORATE
TRUST POWERS. (EXHIBIT 1 TO AMENDMENT NO. 1 TO FORM T-1
FILED WITH REGISTRATION STATEMENT NO. 33-6215, EXHIBITS
1A AND 1B TO FORM T-1 FILED WITH REGISTRATION STATEMENT
NO. 33-21672 AND EXHIBIT 1 TO FORM T-1 FILED WITH
REGISTRATION STATEMENT NO. 33-29637.)
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE. (EXHIBIT
4 TO FORM T-1 FILED WITH REGISTRATION STATEMENT NO.
33-31019.)
6. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF
THE ACT. (EXHIBIT 6 TO FORM T-1 FILED WITH REGISTRATION
STATEMENT NO. 33-44051.)
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR TO THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
901(D) OF REGULATION S-T
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF
NEW YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF
NEW YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW
YORK, AND STATE OF NEW YORK, ON THE 29TH DAY OF JANUARY, 1997.
THE BANK OF NEW YORK
BY: /S/MARY JANE MORRISSEY
NAME: MARY JANE MORRISSEY
TITLE: VICE PRESIDENT
