EXHIBIT 12
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$40,890,000
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ River Authority (Texas)
Pollution Control Revenue Refunding Bonds
(Central Power and Light Company Project)
Series 1995
___________________________
___________________________
October __, 1995
Central Power and Light Company
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter (this "Agreement") will confirm the agreement between
Central Power and Light Company (the "Company") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated (the "Remarketing Agent") whereby the Remarketing Agent will act
as Remarketing Agent under the Indenture (hereinafter defined) in connection
with the remarketing by the Remarketing Agent of the ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ River
Authority (Texas) Pollution Control Revenue Refunding Bonds (Central Power and
Light Company Project) Series 1995, while such Bonds bear interest at the
Flexible Rate, the Daily Rate, the Weekly Rate, the Monthly Rate, the
Quarterly Rate, the Semiannual Rate and the Multiannual Rate (as defined in
the Indenture) (the "Bonds"). The Bonds were issued by ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ River
Authority of Texas (the "Authority") for the benefit of the Company pursuant
to a Resolution of the Authority (the "Resolution"), dated October 18, 1995,
and an Indenture of Trust dated as of October 1, 1995 (the "Indenture"),
between the Authority and The Bank of New York, as trustee (the "Trustee").
Pursuant to the Indenture, certain of the Authority's rights under
the Installment Payment Agreement dated as of October 1, 1995 relating to the
Bonds (the "Installment Agreement") between the Authority and the Company have
been assigned to the Trustee as security for the payment of the principal of,
premium, if any, and interest on the Bonds. In addition, the Company has
caused an irrevocable, direct pay letter of credit, dated the date hereof (the
"Letter of Credit"), issued by ABN AMRO Bank N.V. (the "Bank"), to be
delivered to the Trustee, providing for the Bank to make certain payments to
the Paying Agent (as defined in the Indenture) under the Indenture for the
benefit of the owners of the Bonds. The Bank will be entitled to
reimbursement for payments made under the Letter of Credit pursuant to the
terms of the Letter of Credit Agreement relating to the Bonds, dated as of
October __, 1995 between the Company and the Bank (the "Letter of Credit
Agreement").
Upon optional or mandatory tender for purchase in accordance with
their terms, the Bonds will be remarketed from time to time by the Remarketing
Agent in accordance with provisions contained herein and in the Indenture.
The Company understands that this Agreement does not constitute a commitment
or obligation, expressed or implied, on the part of the Remarketing Agent to
purchase any Bonds. The Remarketing Agent understands that this Agreement
does not constitute a commitment by the Company to remarket the Bonds through
the Remarketing Agent except to the extent provided herein. Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed
thereto in the Indenture.
1. The Company hereby appoints the Remarketing Agent as the
Remarketing Agent for the Bonds and the Remarketing Agent hereby confirms that
it satisfies the requirements for remarketing agents set forth in Section 8.02
of the Indenture, agrees to use its best efforts to remarket the Bonds,
subject to the terms and conditions contained herein and in the Indenture, and
accepts and agrees to perform the duties imposed on it as Remarketing Agent
under the Indenture. This Agreement provides for the remarketing of Bonds
tendered to the Paying Agent on any Purchase Date with respect to Bonds in the
Flexible, Daily, Weekly, Monthly, Quarterly, Semiannual or Multiannual Mode.
2. The Company hereby represents and warrants that:
(a) The Official Statement (as defined in the Bond Purchase
Agreement between the Authority and the Underwriter named therein, dated
October __, 1995 (the "Bond Purchase Agreement")) has been prepared by or on
behalf of the Company in form and substance satisfactory to the Company and
the Remarketing Agent for use in connection with the remarketing of the Bonds.
The Official Statement as of its date of issue did not, and the Official
Statement as of the date hereof does not, include any 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, not misleading, provided that no representation is made with
respect to (i) any information contained in Appendix B to the Official
Statement or (ii) any information furnished by the Remarketing Agent in
writing specifically for use in the Official Statement. The Company confirms
that it has consented to the use by the Remarketing Agent of the Official
Statement in connection with the remarketing of the Bonds. The Company
further represents and warrants that the consummation of the transactions
contemplated in this Agreement and the fulfillment of the terms hereof and of
the Installment Agreement and the Letter of Credit Agreement will not conflict
with, violate or result in a breach of any of the terms or provisions of, or
constitute a default (or an event which with notice or passage of time, or
both, would constitute a default) on the part of the Company under, any
indenture, commitment, agreement or other instrument to which the Company is a
party or by which it is bound or to which any of its property is subject, or
under any existing law, rule, regulation, judgment, ordinance, order or decree
to which the Company is subject.
(b) The information supplied by the Company with respect to the
Facilities and the use of proceeds from the issuance and sale of the Bonds as
described in the Installment Agreement, the Indenture and in the Official
Statement is true, correct and complete in all material respects for the
purposes for which it was supplied.
(c) Since the respective dates as of which information is given in
the Official Statement, except as may otherwise be stated or contemplated
therein, (i) there has been no material adverse change in the financial
condition of the Company or any adverse development concerning the Company's
business or assets which would reasonably be expected to result in a material
adverse change in the Company's prospective financial condition or results of
operations and (ii) there have been no material transactions entered into by
the Company other than those in the ordinary course of business.
(d) Each of this Agreement, the Installment Agreement and the Letter
of Credit Agreement have been duly authorized, executed and delivered by the
Company and is a legal, valid and binding obligation of the Company
enforceable in accordance with its terms.
3. As compensation for its services hereunder, the Company shall
pay the Remarketing Agent a fee equal to [___-_____________ percent(____%)]
per annum of the weighted average principal amount of Bonds in the Flexible,
Daily, Weekly, Monthly, Quarterly, Semiannual or Multiannual Mode outstanding
during each three-month period, or such amount as may be agreed upon from time
to time by the Company and the Remarketing Agent, payable quarterly in arrears
on each April 1, July 1, October 1 and January 1, commencing January 1, 1996.
The Remarketing Agent will not be entitled to compensation pursuant to this
Agreement for any period after conversion of the interest rate on all of the
bonds to a Fixed Rate or after this Agreement shall be terminated (whichever
is earlier) except for a pro rata portion of the fee for the quarter in which
such conversion or termination occurs with respect to Bonds outstanding in the
Flexible, Daily, Weekly, Monthly, Quarterly, Semiannual or Multiannual Mode
for any period during such quarter. The Trustee shall have no responsibility,
obligation or liability with respect to any such payment.
4. The obligations of the Remarketing Agent to remarket the Bonds
under this Agreement shall be subject to (i) the accuracy of the
representations of the Company contained in this Agreement on each Purchase
Date with respect to the Bonds, (ii) the compliance and performance by the
Company of its obligations set forth in its Rule 15c2-12 Undertakings attached
hereto as Exhibit 1, which is hereby incorporated by reference herein, and
(iii) to the following further conditions:
(a) on the date hereof, the Indenture, the Installment Agreement,
the Letter of Representation, dated October __, 1995, between the Company and
the Underwriter, the Letter of Credit and the Letter of Credit Agreement shall
be in full force and effect as valid and binding agreements between or among
the various parties thereto and shall not have been amended, modified or
supplemented except as may have been agreed to in writing by the Remarketing
Agent, and the Resolution shall be in full force and effect;
(b) at or prior to the date hereof, the Trustee shall have received
the Letter of Credit duly executed by the Bank, or a replacement therefor duly
executed by the issuer thereof, and the Remarketing Agent and the Paying Agent
shall have each received a copy thereof, satisfactory in form and substance to
each of them; and
(c) at or prior to the date hereof, the Remarketing Agent shall have
received the applicable opinions described in Section 6(e) of the Bond
Purchase Agreement and the opinion of Sidley & Austin, counsel for the
Remarketing Agent, addressing certain matters relating to the use of funds to
make payments to the owners of the Bonds under the Indenture while the Letter
of Credit is in effect.
If the conditions to the Remarketing Agent's obligations contained in
this Agreement are not satisfied or if the Remarketing Agent's obligations
shall be terminated for any reason permitted by this Agreement, this Agreement
shall terminate.
5. (a)The Company will provide the Remarketing Agent with as many
copies of the Official Statement as the Remarketing Agent may reasonably
request, from time to time, to use in connection with the remarketing of the
Bonds.
(b) The Company agrees to furnish promptly to the Remarketing Agent
copies of all reports filed with the Securities and Exchange Commission, all
documents filed with any stock exchange, all documents mailed to the Company's
public securityholders and such other publicly distributed documents as the
Remarketing Agent may reasonably request for distribution to purchasers of
Bonds. The Company agrees to notify the Remarketing Agent immediately upon
the occurrence of: (1) any Event of Default under the Indenture or the Letter
of Credit Agreement or (2) any notice to the Company from the Trustee or the
Paying Agent under the Indenture that either intends to resign.
(c) (i)If at any time any event or other development occurs as a
result of which the Official Statement includes an untrue statement of
material fact or omits to state any material fact necessary in order to make
the statements contained therein, in the light of the circumstances under
which they were made, not misleading, the Company will promptly notify the
Remarketing Agent thereof, and the Remarketing Agent will not thereafter use
the Official Statement or remarket such Bonds until an appropriately revised
Official Statement is available. The Company shall prepare and deliver
promptly, and at the Company's expense, as many copies of such a revised
Official Statement as the Remarketing Agent may reasonably request. Each
remarketing of a Bond for the Company by the Remarketing Agent involving the
use of the Official Statement shall constitute a representation by the Company
that the Official Statement (including any documents incorporated by reference
therein) at the time of such remarketing does not 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, not misleading.
(ii)The Company agrees to indemnify and hold harmless the Remarketing
Agent, its officers, directors, officials, employees and each person, if any,
who controls the Remarketing Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the
"Indemnified Parties") from and against any and all losses, claims, damages
and liabilities to which such Indemnified Party may become subject under the
Securities Act, the Exchange Act or the common law or otherwise, and to
reimburse each such indemnified Party for any reasonable legal or other
expenses (including reasonable counsel fees) incurred by it or them in
connection with defending against any such losses, claims, damages or
liabilities, arising out of or in connection with the remarketing of any Bonds
pursuant to this Agreement on the ground that the Official Statement used in
connection therewith included any untrue statement or an alleged untrue
statement of material fact or any omission or an alleged omission to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that this indemnity agreement shall not apply to any such losses,
claims, damages, liabilities, expenses or actions arising out of, or based
upon, 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 information furnished in writing to the Company by the
Remarketing Agent expressly for use in connection with the preparation of the
Official Statement or any amendment or supplement thereto.
(iii)The Remarketing Agent agrees that, upon the receipt of notice of
the commencement of any action against it or any other Indemnified Party, in
respect of which indemnity may be sought on account of the indemnity agreement
contained herein, it will promptly give written notice of the commencement
thereof to the Company, but the omission so to notify the Company of any such
action shall not relieve the Company from any liability which it has to the
Indemnified Party otherwise than on account of such indemnity agreement. In
case such notice of any such action shall be so given, the Company shall be
entitled to participate at its own expense in the defense or, if it so elects
by written notice to the Indemnified Party, to assume the defense of such
action (thereby conceding that the action in question is subject to
indemnification hereunder), in which event such defense shall be conducted by
counsel chosen by the Company and satisfactory to the Indemnified Party or
Parties who shall be defendant or defendants in such action, and such
defendant or defendants shall bear the fees and expenses of any additional
counsel retained by them; but if the Company shall elect not to assume the
defense of such action, the Company will reimburse such Indemnified Party or
Parties for the reasonable fees and expenses of any counsel retained by them;
provided, however, that if the defendants in any such action include both an
Indemnified Party and the Company and the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest involved in the
representation by such counsel of both the Company and such Indemnified Party
and/or other Indemnified Parties, the Indemnified Party or Parties shall have
the right to select separate counsel, satisfactory to the Company, to
participate in the defense of such action on behalf of such Indemnified Party
or Parties (it being understood, however, that the Company shall not be liable
for the expenses of more than one separate counsel representing the
Indemnified Parties who are parties to such action).
(iv)If the indemnification provided for in subparagraph 5(c)(ii)
above 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, liabilities and expenses for which such
indemnification provided for in subparagraph 5(c)(ii) above 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 in connection with the statements or omissions which have resulted in
such losses, claims, damages, liabilities and expenses, 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, provided that 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 the Company's
and each such Indemnified Party's relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Remarketing Agent agree that it would not be
just and equitable if contribution pursuant to this subparagraph 5(c)(iv) were
to be determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
The obligations of the Company under this subparagraph 5(c)(iv) shall be in
addition to any obligation or liability which the Company may have otherwise
than on account of the indemnity agreement in subparagraph 5(c)(ii).
6. The Company will not permit the amendment of the Indenture
without first informing the Remarketing Agent and will promptly furnish to the
Remarketing Agent a copy of any amendment to the Indenture.
7. The Company will cooperate with the Remarketing Agent in
obtaining the qualification of the Bonds for resale pursuant to this Agreement
under the laws of such jurisdictions as the Remarketing Agent designates, and
will use its best efforts to continue such qualifications in effect so long as
required for the resale of the Bonds, provided that the Company shall not be
required to qualify to do business as a foreign corporation or file a general
consent to service of process in any state or jurisdiction other than Texas.
The Company also agrees to reimburse the Remarketing Agent for any reasonable
fees or costs incurred in so qualifying the Bonds.
8. (a)This Agreement will continue in effect until terminated as
provided herein. This Agreement may be terminated by the Company by giving 30
days' written notice of its election to do so to the Remarketing Agent; or by
the Remarketing Agent by giving not less than 30 days' written notice of its
election to do so to the Company; provided, however, that the provisions of
paragraph 5(c) hereof and the last sentence of paragraph 7 hereof will
continue in effect subsequent to any such termination for a period of three
years after the last date of any remarketing of Bonds pursuant to this
Agreement.
(b) Notwithstanding anything contained in the preceding paragraph,
the Remarketing Agent may cease to remarket the Bonds pursuant to this
Agreement and terminate or suspend this Agreement with immediate effect, if
(i) the Company fails to provide the Remarketing Agent with the Official
Statements requested pursuant to paragraph 5(a) or 5(c) hereof or (ii) any
Official Statement so provided, in the reasonable judgment of the Remarketing
Agent, includes an untrue statement of a material fact or an omission to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. Each
party will pay the other any amounts owing at the time of termination.
9. The Remarketing Agent, in its individual capacity, either as
principal or agent, may buy, sell, own, hold and deal in any of the Bonds, and
may join in any action which any owner of Bonds may be entitled to take with
like effect as if it did not act in any capacity hereunder. The Remarketing
Agent, in its individual capacity, either as principal or agent, may also
engage in or be interested in any financial or other transaction with the
Company and may act as depository, trustee, or agent for any committee or body
of owners of Bonds or other obligations of the Company as freely as if it did
not act in any capacity hereunder.
10. It is the express intention of the parties hereto that no
remarketing, sale or transfer of any Bonds, as provided herein, shall
constitute or be construed to be the extinguishment of any Bond or the
refunding of any indebtedness represented thereby.
11. This Agreement may not be amended except by a writing signed by
each of the parties hereto, may not be assigned without the mutual consent of
the parties hereto, and, except as otherwise expressly provided herein, will
not confer any rights upon any other person or any holders of Bonds in their
capacities as such. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
12. This Agreement shall be binding upon and inure solely to the
benefit of the Remarketing Agent and the Company and, to the extent set forth
herein, persons controlling the Remarketing Agent and the Company, and their
personal representatives, successors and assigns, and no other person or firm
shall acquire or have any right under or by virtue of this Agreement.
13. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and shall be binding upon the
parties, their successors and assigns.
If the foregoing is in accordance with your understanding please
confirm the same by signing and returning a copy hereof.
Yours very truly,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:______________________________
Name:
Title:
Confirmed as of the above date:
CENTRAL POWER AND LIGHT COMPANY
By:____________________________
Name:
Title:
