AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of May 1, 1997, between Central Power and Light
Company, a Texas corporation ("CPL"), and CPL Capital I, a Delaware business
trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to, and receive Debentures (as defined in the Trust Agreement)
from, CPL and to issue and sell 7.875% Cumulative Quarterly Income Preferred
Securities, Series A (the "Preferred Securities") with such powers, preferences
and special rights and restrictions as are set forth in the Amended and Restated
Trust Agreement of the Trust dated as of May 1, 1997 as the same may be amended
from time to time (the "Trust Agreement");
WHEREAS, CPL will directly or indirectly own all of
the Common Securities of Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase CPL hereby agrees shall benefit CPL and
which purchase CPL acknowledges will be made in reliance upon the execution and
delivery of this Agreement, CPL, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.1. GUARANTEE BY CPL.
Subject to the terms and conditions hereof, CPL, including in its
capacity as holder of the Common Securities, hereby irrevocably and
unconditionally guarantees to each person or entity to whom the Trust is now or
hereafter becomes indebted or liable (the "Beneficiaries") the full payment,
when and as due, of any and all Obligations (as hereinafter defined) to such
Beneficiaries. As used herein, "Obligations" means any costs, expenses or
liabilities of the Trust, other than obligations of the Trust to pay to holders
of any Preferred Securities or other similar interests in the Trust the amounts
due such holders pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
Section 1.2. TERM OF AGREEMENT.
This Agreement shall terminate and be of no further force and effect
upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; PROVIDED, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Preferred Securities or any Beneficiary must restore payment
of any sums paid under the Preferred Securities, under any Obligation, under the
Guarantee Agreement dated the date hereof by CPL and The Bank of New York as
guarantee trustee or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.3. WAIVER OF NOTICE.
CPL hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and CPL hereby waives presentment,
demand for payment, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 1.4. NO IMPAIRMENT.
The obligations, covenants, agreements and duties of CPL under this
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, CPL with respect to the happening of any of the foregoing.
Section 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against CPL and CPL
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against CPL.
ARTICLE II
Section 2.1. BINDING EFFECT.
All guarantees and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives of CPL and
shall inure to the benefit of the Beneficiaries.
Section 2.2. AMENDMENT.
So long as there remains any Beneficiary or any Preferred Securities
of any series are outstanding, this Agreement shall not be modified or amended
in any manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
Section 2.3. NOTICES.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or by registered
or certified mail, addressed as follows (and if so given, shall be deemed given
when mailed or upon receipt of an answer-back, if sent by telex):
CPL Capital I
x/x Xxx Xxxx xx Xxx Xxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No: (000) 000-0000
Attention: Corporate Trust Trustee Administration
Central Power and Light Company
x/x Xxxxxxx xxx Xxxxx Xxxx Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Facsimile No: (000) 000-0000
Attention: Director, Finance
Section 2.4 This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York (without regard
to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above written.
CENTRAL POWER AND LIGHT COMPANY
By:
Name: Xxxxx X. Xxxxxx
Title: Treasurer
CPL CAPITAL I
By:
Name: Xxxxx X. Xxxxxx
Title: Administrative Trustee
