SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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:
In the Matter of :
: CERTIFICATE
SOUTHWESTERN ELECTRIC POWER COMPANY :
: OF
File No. 70-8763 :
: NOTIFICATION
(Public Utility Holding Company Act :
of 1935) :
:
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Southwestern Electric Power Company (the "Company"), a
Delaware corporation and a wholly-owned public utility subsidiary
of Central and South West Corporation, a Delaware corporation and
a registered holding company under the Public Utility Holding
Company Act of 1935, as amended, hereby certifies that:
1. On December 15, 1995, the Company filed a Form U-1
Application-Declaration in File No. 70-8763 (the "Application")
with the Securities and Exchange Commission (the "Commission")
requesting authority to acquire 78 shares of common stock (the
"Shares") of the Arklahoma Corporation, an Arkansas corporation,
from Oklahoma Gas and Electric Company ("OG&E").
2. On April 26, 1996, the Commission issued an order
(the "Order") approving the Company's acquisition of the Shares.
3. On July 31, 1996, the Stock Purchase Agreement
between the Company, OG&E, and Entergy Arkansas, Inc. (formerly
Arkansas Power & Light Company)("Entergy Arkansas") was executed
in the form filed herewith as Exhibit 4(a).
4. The above-described transactions were carried out
in accordance with the terms and conditions of, and for the
purposes requested in, the Application, and in accordance with
the terms and conditions of the Order.
The following exhibits (in the final form thereof in
which executed, filed or used) are filed herewith:
Exhibit 2 - Final or "past tense" opinion of
Milbank, Tweed, Hadley & McCloy,
counsel to the Company.
Exhibit 4(a) - Stock Purchase Agreement dated July
31, 1996, among the Company, OG&E
and Entergy Arkansas.
S I G N A T U R E
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, as amended, the undersigned company
has duly caused this document to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 13, 1996
SOUTHWESTERN ELECTRIC POWER COMPANY
By:/s/SHIRLEY BRIONES
Shirley Briones
Treasurer
EXHIBIT INDEX
Exhibit Transmission
Number Exhibit Method
2 Final or "past tense" opinion Electronic
of Milbank, Tweed, Hadley & McCloy,
counsel to the Company
4(A) Stock Purchase Agreement dated Electronic
July 31, 1996, among the Company,
OG&E and Entergy Arkansas
EXHIBIT 2
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
August 13, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Southwestern Electric Power Company
Certificate of Notification to Form U-1
Application-Declaration (File No. 70-8763)
Dear Sirs:
We refer to the Form U-1 Application-Declaration (File
No. 70-8763) (the "Application") under the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act"), and the
Certificate of Notification filed by Southwestern Electric Power
Company (the "Company"), a Delaware corporation and a wholly-
owned electric utility subsidiary of Central and South West
Corporation ("CSW"), a Delaware corporation and a registered
holding company, and the Order (the "Order") of the Securities
and Exchange Commission dated April 26, 1996 approving the
Application. The Application, Certificate of Notification and
Order relate to the Company's request for authority under the
1935 Act to acquire (the "Acquisition") shares of common stock in
The Arklahoma Corporation, an Arkansas corporation. We have
acted as special counsel for the Company in connection with the
filing of the Application and the Certificate of Notification.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of the Company,
certificates of public officials, certificates of officers and
representatives of the Company and other documents as we have
deemed it necessary to require as a basis for the opinions
hereinafter expressed. In such examination we have assumed the
genuineness of all signatures and the authenticity of all
documents submitted to us as originals and the conformity with
the originals of all documents submitted to us as copies. As to
various questions of fact material to such opinions we have, when
relevant facts were not independently established, relied upon
certificates by officers of the Company and other appropriate
persons and statements contained in the Application and the
Certificate of Notification.
Based upon the foregoing, and having regard to legal
considerations which we deem relevant and subject to the
assumptions and conditions set forth below, we are of the opinion
that:
1. The Acquisition has been consummated in accordance
with the terms and conditions of the Application and the
Order.
2. All state laws applicable to the Acquisition as
described in the Application have been complied with.
3. The consummation of the Acquisition as described in
the Application does not violate the legal rights of the
lawful holders of any securities issued by the Company or
any associate company of the Company.
In rendering the opinions hereinabove expressed, we
have relied upon opinions of other counsel to the Company who are
qualified to practice in jurisdictions pertaining to the
Acquisition in which we are not admitted to practice. We do not
express any opinion as to matters governed by any laws other than
the Federal laws of the United States of America, the laws of the
State of New York and, to the extent hereinabove stated, the laws
of other jurisdictions pertaining to the Acquisition in reliance
upon said opinions of counsel to the Company.
We hereby consent to the use of this opinion as an
exhibit to the Certificate of Notification.
Very truly yours,
MILBANK, TWEED, HADLEY & McCLOY
EXHIBIT 4(a)
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made
and entered into this 31st day of July, 1996, by and among ENTERGY
ARKANSAS, INC. (formerly Arkansas Power & Light Company), an
Arkansas corporation ("Arkansas"), SOUTHWESTERN ELECTRIC POWER
COMPANY, a Delaware corporation ("SWEPCO"), and OKLAHOMA GAS AND
ELECTRIC COMPANY, an Oklahoma corporation ("OG&E").
W I T N E S S E T H:
WHEREAS, Arkansas, SWEPCO and OG&E, own, respectively,
one hundred seventy (170) shares, one hundred sixty (160) shares
and one hundred seventy (170) shares of common stock, $100 par
value, of The Arklahoma Corporation, an Arkansas corporation
("Arklahoma"), representing all of the outstanding shares of
capital stock of Arklahoma (the "Shares");
WHEREAS, Arklahoma owns certain facilities consisting of
(i) a 161 KV transmission line extending from Lake Catherine,
Arkansas to Boudinot Tap, near Tahlequah, Oklahoma, (ii) the Lake
Catherine substation at a terminus of said transmission line and
(iii) certain property incidental thereto (collectively, the
"Facilities");
WHEREAS, Arklahoma leases such facilities to Arkansas,
SWEPCO and OG&E pursuant to an Agreement and Indenture, dated as of
December 9, 1947, as extended by an Extension of Agreement and
Indenture, dated September 6, 1977 (collectively, the "Lease");
WHEREAS, such facilities are jointly operated by
Arkansas, SWEPCO and OG&E pursuant to an Operating Agreement, dated
December 9, 1947 ("Operating Agreement");
WHEREAS, in order to facilitate the formation by OG&E of
a holding company system exempt from the registration requirements
of the Public Utility Holding Company Act of 1935, as amended (the
"'35 Act"), OG&E desires to reduce its ownership of the outstanding
Shares to less than five percent by selling sixty-eight (68) Shares
to Arkansas and seventy-eight (78) Shares to SWEPCO; and
WHEREAS, Arkansas and SWEPCO have agreed to acquire such
Shares in accordance with the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the covenants and
agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
I. Purchase and Sale of Shares. Subject to the terms and
conditions herein stated, (a) OG&E agrees to sell, assign, transfer
and deliver to Arkansas, and Arkansas agrees to purchase from OG&E,
sixty-eight (68) Shares and (b) OG&E agrees to sell, assign,
transfer and deliver to SWEPCO, and SWEPCO agrees to purchase from
OG&E, seventy-eight (78) Shares.
II. Purchase Price. In full consideration for the purchase
by Arkansas and SWEPCO of the Shares to be purchased by them,
respectively, (a) Arkansas shall pay to OG&E an aggregate of Forty-
seven Thousand Eight Hundred Seventy-two Dollars ($47,872), and (b)
SWEPCO shall pay to OG&E an aggregate of Fifty-four Thousand Nine
Hundred Twelve Dollars ($54,912).
III. Closing. The closing of the transactions provided for
herein shall take place concurrently with the execution and
delivery of this Agreement.
IV. Deliveries at Closing. The following deliveries shall be
made by the respective parties hereto:
4.1. OG&E's Deliveries. OG&E shall deliver to Arkansas
and SWEPCO the following:
(a) Stock certificates representing sixty-eight (68)
Shares and seventy-eight (78) Shares, respectively, duly endorsed
in blank with all necessary transfer tax and other revenue stamps,
if any, acquired at OG&E's expense, affixed and canceled. OG&E
agrees to cure any deficiencies with respect to the endorsement of
the certificates representing the Shares or with respect to the
stock power accompanying any such certificates.
(b) Such other documents, certificates and opinions as
reasonably may be required by Arkansas and SWEPCO in order to (i)
demonstrate the accuracy of, or the compliance by OG&E with, all of
the representations, warranties, covenants and conditions set forth
herein, and (ii) consummate the transactions contemplated hereby.
4.2. Arkansas' and SWEPCO's Deliveries. Arkansas and
SWEPCO shall deliver to OG&E, respectively, the payments referred
to in Paragraph 2 above by check or by wire transfer of immediately
available funds to the account of OG&E designated in writing.
V. Provisions of Lease and Operating Agreement. Arkansas,
SWEPCO and OG&E hereby acknowledge that the sale of the Shares will
not, in itself, act to modify the rights and obligations of the
parties under the Lease and the Operating Agreement.
Notwithstanding the sale of the Shares contemplated herein, in
accordance with the provisions of the Lease and the Operating
Agreement (a) Arkansas, SWEPCO and OG&E shall continue to be
entitled to use up to but not in excess of one-third of the
capacity of the Facilities without payment for such use to either
of the other parties, and (b) all expenses, liabilities, losses,
damages, costs and other charges incurred by Arklahoma or arising
in connection with the operation or ownership of the Facilities
(whether incurred or arising prior to or after the sale of the
Shares) shall continue to be equally borne by Arkansas, SWEPCO and
OG&E.
VI. Representations and Warranties.
A. OG&E's Representations and Warranties. OG&E
represents and warrants to Arkansas and SWEPCO, as of the date of
this Agreement, as follows:
(a) Corporate Standing; Authorization. OG&E is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Oklahoma with all requisite
corporate power, authority and legal right to execute, deliver, and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereunder, and has taken all necessary
corporate action to authorize the sale of the Shares hereunder on
the terms and conditions of this Agreement and to authorize the
execution, delivery and performance of this Agreement.
(b) Due Execution and Enforceability. This Agreement is
a valid and binding obligation of OG&E enforceable in accordance
with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general
application referring to or affecting the enforcement of creditors'
rights and general principles of equity.
(c) No Restrictions Against Performance. Neither the
execution, delivery, authorization or performance of this
Agreement, nor the consummation of the transactions contemplated
hereby will, with or without the giving of notice or the passage of
time, or both, violate any provisions of, conflict with, result in
a breach of, constitute a default under, or result in the creation
or imposition of any lien or condition under (i) OG&E's Certificate
of Incorporation or By-Laws; (ii) any federal, state or local law,
statute, ordinance, regulation or rule, which is applicable to OG&E
other than as set forth in paragraph 6.1(d) hereof (provided that
OG&E makes no representation as to any such laws, statutes,
ordinances, regulations or rules which require consent,
authorization or approval with respect to Arkansas or SWEPCO);
(iii) any contract, indenture, instrument, agreement, mortgage,
lease, right or other obligation or restriction to which OG&E is a
party or by which OG&E is bound; or (iv) any order, judgment, writ,
injunction, decree, license, franchise, permit or other
authorization of any federal, state or local court, arbitration
tribunal or governmental agency by which OG&E is bound, any of
which, when taken as a whole, would have a material adverse affect
on OG&E.
(d) Third-Party and Governmental Consents. No approval,
consent, waiver, order or authorization of, or registration,
qualification, declaration, or filings with, or notice to, any
federal, state or local governmental authority or other third party
is required on the part of OG&E in connection with the execution of
this Agreement or the consummation of the sale of the Shares
contemplated hereby, other than the approvals of the Federal Energy
Regulatory Commission, the Oklahoma Corporation Commission and the
Arkansas Public Service Commission. Each of such approvals has
been obtained prior to the date hereof and has not been reversed,
stayed, enjoined or appealed.
(e) No Injunction. No action or proceeding by any
governmental authority or other person has been instituted or
threatened which could in any manner enjoin, restrain or prohibit,
or could result in substantial damages in respect of, any
provisions of this Agreement or the consummation of the
transactions contemplated hereby.
(f) No Litigation. No action or proceeding by any
governmental authority or other person is pending or has been
instituted or threatened which reasonably could be expected to have
an adverse effect on the business, operations, properties, assets
or financial condition of Arklahoma.
(g) Ownership of Shares. OG&E is the lawful owner of
one hundred seventy (170) Shares, free and clear of all liens,
charges, encumbrances, restrictions and claims of every kind; OG&E
has full legal right, power and authority to enter into this
Agreement and to sell, assign, transfer and convey the Shares
pursuant to this Agreement; the delivery to Arkansas and SWEPCO of
the Shares pursuant to the provisions of this Agreement will
transfer to Arkansas and SWEPCO, respectively, valid title thereto,
free and clear of all liens, encumbrances, restrictions and claims
of every kind.
B. Arkansas' and SWEPCO's Representations and
Warranties. Each of Arkansas and SWEPCO represents and warrants to
OG&E, with respect to itself only, as of the date of this
Agreement, as follows:
(a) Corporate Standing; Authorization. Arkansas and
SWEPCO are corporations duly organized, validly existing and in
good standing under the laws of the States of Arkansas and
Delaware, respectively. Each of Arkansas and SWEPCO has all
requisite corporate power, authority and legal right to execute,
deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereunder, and has taken
all necessary corporate action to authorize the purchase of the
Shares hereunder on the terms and conditions of this Agreement and
to authorize the execution, delivery and performance of this
Agreement.
(b) Due Execution and Enforceability. This Agreement is
a valid and binding obligation of Arkansas and SWEPCO, as the case
may be, enforceable in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application referring to or affecting the
enforcement of creditors' rights and general principles of equity.
(c) No Restrictions Against Performance. Neither the
execution, delivery, authorization or performance of this
Agreement, nor the consummation of the transactions contemplated
hereby will, with or without the giving of notice or the passage of
time, or both, violate any provisions of, conflict with, result in
a breach of, constitute a default under, or result in the creation
or imposition of any lien or condition under (i) Arkansas' or
SWEPCO's Articles or Certificate of Incorporation or By-Laws; (ii)
any federal, state or local law, statute, ordinance, regulation or
rule, which is applicable to Arkansas or SWEPCO, as the case may
be, other than as set forth in paragraph 6.2(d) hereof (provided
that Arkansas and SWEPCO make no representation as to any such
laws, statutes, ordinances, regulations or rules which require
consent, authorization or approval with respect to OG&E); (iii) any
contract, indenture, instrument, agreement, mortgage, lease, right
or other obligation or restriction to which Arkansas or SWEPCO, as
the case may be, is a party or by which Arkansas or SWEPCO, as the
case may be, is bound; or (iv) any order, judgment, writ,
injunction, decree, license, franchise, permit or other
authorization of any federal, state or local court, arbitration
tribunal or governmental agency by which Arkansas or SWEPCO, as the
case may be, is bound, any of which, when taken as a whole, would
have a material adverse affect on Arkansas or SWEPCO, as the case
may be.
(d) Third-Party and Governmental Consents. No approval,
consent, waiver, order or authorization of, or registration,
qualification, declaration, or filings with, or notice to, any
federal, state or local governmental authority or other third party
is required on the part of Arkansas or SWEPCO, as the case may be,
in connection with the execution of this Agreement or the
consummation of the sale of the Shares contemplated hereby, other
than the approvals of the Securities and Exchange Commission under
the '35 Act and the Arkansas Public Service Commission. Each of
such approvals has been obtained prior to the date hereof and has
not been reversed, stayed, enjoined or appealed.
(e) No Injunction. No action or proceeding by any
governmental authority or other person has been instituted or
threatened which could enjoin, restrain or prohibit, or could
result in substantial damages in respect of, any provisions of this
Agreement or the consummation of the transactions contemplated
hereby.
VIII. Survival of Representations, Warranties and Agreements.
All of the parties' warranties, representations and covenants
contained in this Agreement or in any document delivered hereunder
shall survive the purchase and sale of the Shares contemplated
hereby.
VII. Indemnification by OG&E. OG&E agrees to defend,
indemnify and hold Arkansas and SWEPCO and their respective
officers, directors and agents harmless from and against any and
all losses, liabilities, damages, costs, or expenses (including
reasonable attorneys' fees, penalties and interest) payable to or
for the benefit of, or asserted by, any party, resulting from,
arising out of, or incurred as a result of (a) the breach of any
representation made by OG&E herein or in accordance herewith; or
(b) the breach of any warranty or covenant made by OG&E herein or
in accordance herewith. The obligation to indemnify and hold
harmless pursuant to this Section shall survive the consummation of
the transactions contemplated hereby.
9. Expenses. OG&E shall pay its own and Arkansas' and
SWEPCO's expenses (including, without limitation, all filing fees
and the reasonable fees and expenses of their respective agents,
representatives, counsel, accountants and service companies)
incidental to (a) the negotiation, drafting, review and performance
of this Agreement and (b) the receipt of all necessary regulatory
approvals for the parties to consummate the transactions
contemplated hereby.
VIII. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of Arkansas, SWEPCO, OG&E and
their respective, successors, representatives and assigns.
IX. Waiver. No provision of this Agreement shall be deemed
waived by course of conduct, including the act of closing, unless
such waiver is made in a writing signed by the parties hereto
stating that it is intended specifically to modify this Agreement,
nor shall any course of conduct operate or be construed as a waiver
of any subsequent breach of this Agreement, whether of a similar or
dissimilar nature.
X. Entire Agreement; Modification. This Agreement
supersedes any other agreement, whether written or oral, that may
have been made or entered into by Arkansas, SWEPCO and OG&E (or by
any director, officer, agent, or other representative of such
parties) relating to the matters contemplated hereby. This
Agreement constitutes the entire agreement between the parties and
there are no agreements or commitments except as expressly set
forth herein. This Agreement may be amended or modified only by a
written instrument executed by the parties hereto which states
specifically that it is intended to amend or modify this Agreement.
XI. Notices. All notices, demands, requests, and other
communications hereunder shall be in writing and shall be deemed to
have been duly given and shall be effective upon receipt if
delivered by hand, or sent by certified or registered United States
mail, postage prepaid and return receipt requested, or by prepaid
overnight express service. Notices shall be sent to the parties at
the following addresses (or at such other addresses for a party as
shall be specified by like notice; provided that such notice shall
be effective only upon receipt thereof): (a) if to Arkansas:
Entergy Arkansas, Inc., c/o Entergy Services, Inc., P.O. Box 61000,
New Orleans, Louisiana 70161, Attention: Vice President,
Transmission and Distribution System, with copies to Laurence M.
Hamric, Esq., General Attorney-Corporate and Securities, at the
foregoing address, and to John T. Hood, Esq., Reid & Priest LLP, 40
West 57th Street, New York, New York 10019; (b) if to SWEPCO:
Southwestern Electric Power Company, 428 Travis Street, P.O. Box
21106, Shreveport, Louisiana 71156, Attention: Michael Madison,
Vice President of Engineering and Operations, with copies to Joris
M. Hogan, Esq., Milbank, Tweed, Hadley and McCloy, One Chase
Manhattan Plaza, New York, New York 10005; or (c) if to OG&E:
Oklahoma Gas and Electric Company, 101 North Robinson, Oklahoma
City, Oklahoma 73101, Attention: James R. Hatfield, Treasurer, with
copies to Peter D. Clarke, Esq., Gardner, Carton & Douglas, 321 N.
Clark Street, Chicago, Illinois 60610.
XII. Governing Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in
accordance with the substantive laws of the State of Arkansas,
without giving effect to the principles of conflicts of law
thereof.
XIII. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above-written.
ENTERGY ARKANSAS, INC.
By: ___________________________________
Name:
Title:
SOUTHWESTERN ELECTRIC POWER COMPANY
By: ___________________________________
Name:
Title:
OKLAHOMA GAS AND ELECTRIC COMPANY
By: ___________________________________
Name:
Title:
