EXHIBIT 1
CENTRAL POWER AND LIGHT COMPANY
SENIOR NOTES
UNDERWRITING AGREEMENT
, 199
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Central Power and Light Company
000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxxx, Xxxxx 00000-0000
Dear Sirs:
We (the "Managers") understand that Central Power and Light
Company, a Texas corporation (the "Company"), proposes to issue and sell
$ _________ aggregate principal amount of its ________% Senior Notes due
___________ (the "Offered Securities"). Subject to the terms and conditions set
forth herein or incorporated by reference herein, the Company hereby agrees to
sell and the underwriter or underwriters named in Schedule I hereto (such
underwriter or underwriters being herein called the "Underwriters") agree to
purchase, severally and not jointly, the principal amounts of such Offered
Securities set forth opposite their names in Schedule I hereto at ________% of
their principal amount plus accrued interest, if any, from _______________,
199__ to the date of payment and delivery.
The Underwriters will pay for such Offered Securities at the
offices of Milbank, Tweed, Xxxxxx & XxXxxx, 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 at 10:00 a.m., New York Time, on ____________, 199__, or at such
other place and time, not later than ____________, 199__, as shall be mutually
agreed. The Offered Securities shall be concurrently delivered to the
Underwriters at the offices of ________________________________.
The Offered Securities shall have the following terms:
Maturity: ,
---------------------- -------
Interest Rate: %
-------------
Mandatory and Optional
Sinking-Fund Provisions: As described in the Prospectus
and applicable Prospectus
Supplement for the Offered
Securities
Optional Redemption Provisions: As described in the Prospectus
and applicable Prospectus
Supplement for the Offered
Securities
Interest Payment Dates: and
-----------------
, commencing
-----------------
, 199
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Address for Notices
to Managers under
Underwriting Agreement:
Payment Method:
All the provisions contained in the document entitled Central
Power and Light Company Underwriting Agreement Standard Provisions (Senior
Notes-Shelf) dated ____________, 199__, a copy of which you and we have
previously received, are herein incorporated by reference in their entirety and
shall be deemed to be a part of this Underwriting Agreement to the same extent
as if such provisions had been set forth in full herein. References herein and
therein to numbered sections of the Underwriting Agreement shall mean the
numbered sections of such Standard Provisions.
Please confirm your agreement by having an authorized officer sign
a copy of this Underwriting Agreement in the space set forth below and returning
the signed copy to us. This Underwriting Agreement may be signed in any number
of counterparts with the same effect as if the signature thereto and hereto were
upon the same instrument. It is understood that our acceptance of this agreement
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, upon request.
Very truly yours,
By:
--------------------------------
Title:
-----------------------------
(Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto)
Accepted:
CENTRAL POWER AND LIGHT COMPANY
By:
-----------------------------
Name:
Title:
2
Schedule I
-----------
Principal
Amount of
Offered
Underwriters Securities
------------- ------------
$
Total $
CENTRAL POWER AND LIGHT COMPANY
UNDERWRITING AGREEMENT
STANDARD PROVISIONS (SENIOR NOTES-SHELF)
Dated ______________, 199__
From time to time Central Power and Light Company, a Texas
corporation (the "Company"), may enter into one or more underwriting agreements
that provide for the sale of designated securities to the several underwriters
named therein. The standard provisions set forth herein may be incorporated by
reference in any such underwriting agreement and any such underwriting
agreement, including the provisions incorporated therein by reference, is herein
referred to as the "Underwriting Agreement".
The Company proposes to issue the series of Senior Notes specified
in the attached Underwriting Agreement (the "Offered Securities") pursuant to
the provisions of its Indenture dated _____________, 1998, as the same may from
time to time be amended or supplemented (the "Indenture"), to The Bank of New
York, a New York banking association, as Trustee (the "Trustee"). The Offered
Securities will have the terms and rights, including the maturity, rate and
times of payment of interest, selling price and redemption terms, and other
terms, as set forth in the Underwriting Agreement and Prospectus (as hereinafter
defined). The Underwriting Agreement shall be in the form of an executed writing
(which may be in counterparts) and may be evidenced by facsimile or any other
electronic transmission designed to produce a written record of communications
transmitted.
1. Representations and Warranties of the Company.
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-_______), including a prospectus, relating to the Offered Securities, and
the offering thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"), and such registration
statement has become effective. The Company has prepared or will promptly
prepare for filing with, or transmission for filing to, the Commission, pursuant
to Rule 424 under the Securities Act, a Prospectus Supplement (the "Supplement")
for the purpose of supplying information in respect of the public offering of
the Offered Securities, the names of the underwriter or group of underwriters
and other matters. The registration statement, as amended at the time it became
effective, including the information contained in the final prospectus filed
with the Commission pursuant to Rule 424(b) of the Securities Act, and the
prospectus, as supplemented by the Supplement, relating to the Offered
Securities in final form as filed with the Commission pursuant to Rule 424 under
the Securities Act, are hereinafter called the "Registration Statement" and the
"Prospectus", respectively. The term "Basic Prospectus" means the prospectus
included in the Registration Statement.
The term "preliminary prospectus" means a preliminary prospectus
supplement, if any, relating to the Offered Securities together with the Basic
Prospectus. Whenever the word "Registration Statement", "registration
statement", "Prospectus", "preliminary prospectus" or "prospectus" is used
herein it shall be deemed to include all documents incorporated therein by
reference pursuant to the requirements of Form S-3 under the Securities Act (the
"Incorporated Documents").
(b) The Commission has entered an order dated
December 30, 1997, under the Public Utility Holding Company Act of 1935, as
amended (the "Holding Company Act"), permitting to become effective the Form U-1
Application-Declaration filed by the Company with respect to the issue and sale
of the Offered Securities. A copy of such order heretofore entered by the
Commission has been or will be delivered to the Underwriters.
(c) Except as otherwise contemplated herein, no approval,
authorization, consent, certificate or order of any State commission or
regulatory authority is necessary with respect to the issuance or the sale of
the Offered Securities by the Company.
(d) The Basic Prospectus relating to the Offered Securities
as originally filed, or as a part of any amendment thereto, any preliminary
prospectus at the time of its issuance, and the Registration Statement and the
Prospectus and any amendment or supplement to the Registration Statement or the
Prospectus as of their effective or issue dates, and as of the Closing Date (as
hereinafter defined), complied or will comply, in each case in all material
respects, with the provisions of the Securities Act and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission under said Acts, and neither the Registration Statement nor
any amendment thereto contains or will contain an untrue statement of a material
fact or omits or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading and
the Basic Prospectus, any preliminary prospectus, the Prospectus or any
amendment or supplement thereto 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 required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made not misleading;
provided that the foregoing representations and warranties in this subsection
(d) shall not apply to omissions from the Registration Statement or Prospectus
resulting from the failure of any of the Underwriters to furnish the Company
with the information pertaining to such Underwriters and the underwriting of the
Offered Securities required to complete the Registration Statement or the
Prospectus, to statements in the Form T-1 filed by the Trustee as exhibit to the
Registration Statement or to statements in or omissions from the Prospectus made
in reliance upon and in conformity with information furnished in writing to the
Company by any of the Underwriters for use in connection with the preparation of
the Prospectus. The Incorporated Documents that were filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), complied at their
respective times of filing, and any documents deemed to be incorporated in the
Registration Statement and Prospectus at all times during which a prospectus is
required to be delivered under the Securities Act will comply at their
respective times of filing, with the provisions of the Exchange Act and the
rules and regulations of the Commission thereunder.
(e) Except as the Company may have furnished supplemental
information to each prospective Underwriter or to the Managers prior to the
receipt of proposals to purchase the Offered Securities as to matters to be
reflected in the Prospectus, since the respective dates as of which information
is given in the Registration Statement and in the Prospectus, there has been no
(A) material adverse change in the condition, financial or otherwise, or in the
earnings of the Company, or (B) adverse development concerning the Company's
business or assets which would result in a material adverse change in its
prospective financial condition or results of operations, except such changes as
are set forth or contemplated in such Registration Statement (including the
financial statements and notes thereto included or incorporated by reference in
the Registration Statement) or the Prospectus.
(f) At or prior to the acceptance by the Company of a
proposal for the purchase of the Offered Securities, the Company will have taken
all corporate action necessary to be taken by it to authorize the acceptance of
such proposal and, at or before the Closing Date, will have taken all corporate
action necessary to be taken by it to authorize the performance by it of all
obligations on its part to be performed under the Underwriting Agreement; and
the consummation of the transactions contemplated in, and the fulfillment of the
terms of, the Underwriting Agreement will not result in a breach of any of the
terms and provisions of, or constitute a default under, any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company is a party
at the Closing Date, or the Restated Articles of Incorporation of the Company,
as amended, or any order, rule or regulation applicable to the Company of any
court or of any state or Federal regulatory body or administrative agency having
jurisdiction over the Company or over its property.
(g) Xxxxxx Xxxxxxxx L.L.P. are independent accountants with
respect to the Company as required by the Securities Act and the applicable
rules and regulations thereunder.
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2. Purchase, Sale and Delivery of Offered Securities.
The Company is advised by the Managers that the Underwriters
propose to make a public offering of their respective portions of the Offered
Securities as soon after the Underwriting Agreement is entered into as in the
Managers' judgment is advisable. The terms of the public offering of the Offered
Securities are or will be set forth in the Prospectus.
Payment for the Offered Securities shall be made by certified or
official bank check or checks payable to the Company or its order in immediately
available Federal funds (unless the Underwriting Agreement shall otherwise
specify) at the time and place set forth in the Underwriting Agreement upon
delivery to the Managers for the respective accounts of the several Underwriters
of the Offered Securities registered in such names and in such denominations as
the Managers shall request in writing not less than two full business days prior
to the date of delivery. The Company agrees to have the Offered Securities
available for inspection, checking and packaging by the Managers at the location
indicated in the Underwriting Agreement not later than 1:00 P.M. on the business
day next prior to the Closing Date. The time and date of such payment and
delivery with respect to the Offered Securities are herein referred to as the
"Closing Date".
3. Covenants of the Company.
The Company covenants and agrees with each of the Underwriters
that:
(a) As soon as practicable after the acceptance of a
proposal to purchase the Offered Securities, the Company will file the
Supplement with the Commission pursuant to Rule 424(b) of the Securities Act.
The Company will not file at any time prior to the Closing Date any other
amendment to the Registration Statement or any supplement to the Prospectus, or
any other amended prospectus or any document that upon the filing thereof would
become an Incorporated Document of which Sidley & Austin ("Underwriters'
Counsel") shall not previously have been advised and furnished with a copy or to
which the Managers shall reasonably object in writing.
(b) The Company will advise the Managers immediately, and
confirm such advice promptly in writing, of the effectiveness of any amendment
to the Registration Statement.
(c) The Company will notify promptly each of the
Underwriters in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or in the event of
the institution or notice of intended institution by the Commission of any
action or proceeding for that purpose. In the event the Commission shall enter a
stop order suspending the effectiveness of the Registration Statement, whether
before or after the Offered Securities have been delivered to the Managers or
the Underwriters and paid for as provided in the Underwriting Agreement, the
Company will make every reasonable effort to obtain, as promptly as possible,
the entry by the Commission of an order setting aside any such stop order or
otherwise reinstating the effectiveness of the Registration Statement.
(d) The Company will deliver to the Managers, on or before
the Closing Date, one signed copy of the registration statement as originally
filed and of each amendment thereto (in each case including all exhibits
thereto, other than exhibits incorporated by reference), and will also deliver
to the Managers, for distribution to the Underwriters, a sufficient number of
conformed copies of each of the foregoing (but without exhibits) so that one
copy of each may be distributed to each of the Underwriters. The Company will
also send to the Managers or to the Underwriters, without expense to them, as
soon as practicable after the date hereof, and thereafter from time to time
during a period of nine months after such date, as many copies of any
preliminary prospectus and the Prospectus as the Managers may reasonably request
for the purposes contemplated by the Securities Act.
(e) The Company will use its best efforts, when and as
requested by the Managers, to furnish information and otherwise cooperate in
qualifying or registering the Offered Securities for offer
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and sale under the securities or "blue sky" laws of such jurisdictions as the
Managers may designate, but the Company shall not thereby be obligated to
qualify as a foreign corporation or subject itself to taxation in, or to execute
or file any general consent to service of process under the laws of, any
jurisdiction. The Company will pay the Underwriters' Counsel all reasonable fees
(including counsel fees) and expenses incurred by them in connection with such
qualification or registration of the Offered Securities for offer or sale, not
exceeding, however, $5,000 in the aggregate.
(f) If the Underwriting Agreement shall be terminated
pursuant to the provisions of Section 4, the Company will pay the reasonable
fees and disbursements of Underwriters' Counsel in connection with the
contemplated issue and sale of the Offered Securities, unless such termination
is caused by any default by the Managers or any of the Underwriters in the
performance of their respective obligations hereunder. Except as provided in
this subsection (f), the Underwriters shall pay the fees of Underwriters'
Counsel and reimburse such counsel for their reasonable expenses paid or
incurred in connection with the issue and sale of the Offered Securities. The
Company shall not in any event be liable to any of the Underwriters for damages
on account of loss of anticipated profits.
(g) The Company will, so long as any of the Offered
Securities shall be outstanding, deliver to the Managers upon their request, and
to each other Underwriter who may so request, copies of all public reports and
all reports and financial statements furnished by the Company to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder.
(h) During a period of nine months after the date of the
Prospectus, if any event relating to or affecting the Company or its
subsidiaries, if any, or of which the Company shall be advised in writing by the
Managers, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company, to supplement or amend the Prospectus in order to make
the Prospectus not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser of Offered Securities from any of the
Underwriters, the Company will forthwith at its expense prepare and furnish to
the Managers or to the Underwriters a reasonable number of copies of a
supplement or supplements or an amendment or amendments to the Prospectus (in
form satisfactory to Underwriters' Counsel) which will supplement or amend the
Prospectus so that, as so supplemented or amended, it will not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances existing at the time the Prospectus is delivered
to such a purchaser, not misleading. In case any of the Underwriters is required
to deliver a prospectus descriptive of the Offered Securities after the
expiration of nine months after the date of the Prospectus, the Company, upon
the request of the Managers, will furnish to the Managers, at the expense of
such Underwriter, a reasonable quantity of amendments or supplements to the
Prospectus complying with Section 10 of the Securities Act. For the purpose of
this subsection (h), the Company will furnish such information with respect to
itself and its subsidiaries, if any, as the Managers may from time to time
reasonably request, and during said nine-month period, the Company will prepare
and continue to file with the Commission all documents required to be filed
under the Exchange Act.
(i) The Company will make generally available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) covering a period of at least twelve months beginning not earlier
than the date of the Prospectus, which earnings statement shall satisfy the
requirements of Section 11(a) of the Securities Act.
4. Conditions of Underwriters' Obligations.
The obligations of the Underwriters to purchase and pay for the
Offered Securities shall be subject to the performance by the Company of its
obligations to be performed under the Underwriting Agreement at or prior to the
Closing Date, to the continued accuracy in all material respects of the
representations and warranties of the Company contained in the Underwriting
Agreement, and to the following conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing and in accordance with Section 1(a) of
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this Agreement; no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act, or proceedings
therefor instituted or threatened by the Commission, on or prior to the Closing
Date.
(b) At or prior to the Closing Date, the Underwriters shall
have received from Underwriters' Counsel an opinion (subject to the reservation
that they have relied upon the opinion of Xxxxxx & Xxxxxx L.L.P., Dallas, Texas,
counsel for the Company, as to all matters governed by Texas law), to the effect
that:
(i) the Company has been duly incorporated and is
a validly existing corporation under the laws of the State of
Texas;
(ii) the Indenture has been duly and validly
authorized by the necessary corporate action by the Company, has
been duly and validly executed and delivered by the Company, and
is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the enforcement of
creditors' rights generally, and to the effects of general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law);
(iii) the issue and sale of the Offered Securities
by the Company in accordance with the terms of the Underwriting
Agreement have been duly and validly authorized by the Company.
The Offered Securities, when duly executed, authenticated and
delivered to and paid for by the Managers or the Underwriters in
accordance with the terms of the Underwriting Agreement, will be
valid and binding obligations of the Company, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the enforcement of
creditors' rights generally, and to the effects of general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law);
(iv) the Offered Securities and the Indenture
conform as to legal matters, in all material respects, with the
statements concerning them made in the Prospectus under the
caption "Description of the Senior Notes" and in the Prospectus
Supplement under the caption "Supplemental Description of the
Senior Notes" and such statements accurately set forth, in all
material respects, the matters respecting the Offered Securities
and the Indenture which are required to be set forth in the
Prospectus, as supplemented by the Prospectus Supplement, by the
Securities Act and the Trust Indenture Act and the rules and
regulations under said Acts (other than the accounting provisions
thereof, with respect to the requirements of which such counsel
need express no opinion or belief); and the Indenture has been
qualified under the Trust Indenture Act;
(v) the order of the Commission referred to in
subsection (b) of Section 1 of the Underwriting Agreement has been
duly entered and, to the knowledge of said counsel, is in full
force and effect. Except for the order of the Commission entered
with respect to the Registration Statement as contemplated in
paragraph (vii) below, no further approval, authorization,
consent, certificate or order of any Federal commission or
regulatory authority is necessary with respect to the execution
and delivery of the Indenture or the issue and sale of the Offered
Securities by the Company as contemplated in the Underwriting
Agreement;
(vi) the Registration Statement on Form S-3 has
become effective under the Securities Act, and, to the best of the
knowledge of said counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for such purpose have been instituted or are pending
or threatened under the Securities Act;
5
(vii) the Registration Statement, the Prospectus
and the Prospectus Supplement, in each case excluding the
Incorporated Documents (other than financial statements, financial
data, statistical data and supporting schedules included or
incorporated by reference therein, as to which said counsel need
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 Securities Act (or, where appropriate, the
Exchange Act) and the rules and regulations of the Commission
thereunder; and
(viii) the Underwriting Agreement has been duly
authorized, executed and delivered by the Company.
Such counsel shall also state that while, except as otherwise
required or stated in said opinion, said counsel have not independently checked
the accuracy or completeness of, or otherwise verified, and accordingly, are not
passing upon, and do not assume any responsibility for and have not
independently verified the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Prospectus or the Prospectus
Supplement, and relying as to materiality, to a large extent, upon the judgment
of officers and representatives of the Company, nothing has come to the
attention of said counsel which would lead said counsel to believe that the
Registration Statement relating to the Offered Securities or any amendment
thereto (other than financial statements, financial data and supporting
schedules included or incorporated by reference therein, as to which said
counsel need express no opinion or 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 (with the foregoing exception) the Prospectus, as
supplemented by the Prospectus Supplement, as of the date of such opinion
includes any 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,
in the light of the circumstances under which they were made, not misleading.
(c) At or prior to the Closing Date, the Underwriters shall
have received from Milbank, Tweed, Xxxxxx & XxXxxx, counsel for the Company, an
opinion (subject to the same reservation as that expressed in subsection (b) of
this Section 4), in form and substance satisfactory to Underwriters' Counsel, to
the same effect, in general, with respect to all matters enumerated in
subsection (b) of this Section 4.
(d) At or prior to the Closing Date, the Underwriters shall
have received from Xxxxxx & Xxxxxx L.L.P., special Texas counsel for the
Company, an opinion, in form and substance satisfactory to Underwriters'
Counsel, to the effect that:
(i) the Company is a corporation, duly
incorporated and validly existing under the laws of the State of
Texas;
(ii) the Company is a public utility (as defined
in the Public Utility Regulatory Act ("PURA") of the State of
Texas), duly authorized by its Restated Articles of Incorporation,
as amended, and filed with the Secretary of State of the State of
Texas, through the date of such opinion, to conduct the business
of generating and supplying gas, electric light and motor power to
the public; the Company is authorized under the laws of the State
of Texas to operate as an electric utility (as defined in PURA) in
the areas of the State of Texas in which it currently does so,
except where the failure to be so authorized could not reasonably
be expected to result in a material adverse change in the
financial condition, results of operations or business of the
Company (a "Material Adverse Effect");
(iii) the Company has valid and subsisting municipal
franchises, licenses or permits authorizing it to operate as an
electric utility in all of the municipalities listed on an exhibit
to such opinion (which municipalities the Company has certified to
such counsel are all the municipalities served by it in which the
Company derives a material amount of electric operating revenues)
wherein such a franchise, license or permit is required;
6
(iv) except as set forth in the Prospectus, there
is no litigation or other legal proceedings pending to which the
Company is a party or to which property of the Company is subject
that could reasonably be expected to result in a Material Adverse
Effect and, to the best of such counsel's knowledge, no such
litigation or proceedings have been threatened;
(v) the Underwriting Agreement has been duly
authorized, executed and delivered by the Company;
(vi) the Indenture has been duly authorized,
executed and delivered by the Company, and constitutes a valid and
binding obligation of the Company enforceable against the Company
in accordance with its terms;
(vii) the issuance and sale of the Offered
Securities by the Company in accordance with the terms of the
Underwriting Agreement have been duly authorized by the Company;
the Offered Securities, when duly executed, authenticated and
delivered to the Underwriters in the manner set forth in the
Underwriting Agreement, against payment to the Company of the
agreed consideration therefor, will be valid and binding
obligations of the Company, entitled to the benefits of the
Indenture;
(viii) no approval, authorization, consent,
certificate or order of any commission or regulatory authority of
the State of Texas (other than in connection with the "blue sky"
or securities laws of regulations of the State of Texas, about
which such counsel need express no opinion) is necessary with
respect to the execution and delivery of the Indenture or the
issuance and sale of the Offered Securities by the Company to the
Underwriters as contemplated by the Underwriting Agreement;
Such counsel shall also state that, in their role as special Texas
counsel to the Company in connection with the offering of the Offered Securities
such counsel reviewed the Registration Statements and the Prospectus, (however,
such counsel did not participate in their preparation) and although such counsel
has not independently verified, and does not warrant or pass upon the accuracy
or completeness of the statements contained in the Registration Statements or
the Prospectus (relying, with respect to materiality, to the extent such counsel
deems such reliance proper, upon the opinions of officers and other
representatives of the Company) no facts have come to such counsel's attention
as a result of the foregoing review which lead such counsel to believe that
either (i) the Registration Statements at the respective times they became
effective contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) the Prospectus as of its date or as of the
Closing Date contained any untrue statement of a material fact or omitted 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.
Notwithstanding the foregoing, such counsel need express no belief as to (a) the
financial statements and schedules and other financial data included in the
Registration Statements or the Prospectus or any amendment or supplement
thereto, (b) the Statement of Eligibility of the Trustee under the Trust
Indenture Act, on Form T-1 or (c) regulatory and other legal matters not
governed by the laws of the State of Texas.
(e) At or prior to the Closing Date, the Underwriters shall
have received from Xxxxxx Xxxxxxxx L.L.P. a letter confirming that they are
independent public accountants with respect to the Company within the meaning of
the Securities Act and the applicable published rules and regulations thereunder
and that the answer to Item 10 of the Registration Statement is correct insofar
as it relates to them and stating in effect (1) that in their opinion the
financial statements and schedules of the Company incorporated by reference in
the Registration Statement and Prospectus and which are stated therein to have
been certified or audited by them, comply as to form, in all material respects,
with the applicable accounting requirements of the Securities Act and the
published rules and regulations thereunder; (2) that nothing has come to their
attention which causes them to believe (A) that any unaudited dollar amounts or
ratios which may appear in the Registration Statement and the Prospectus under
the caption "The Company" were not determined on a basis substantially
consistent with that of the corresponding
7
amounts in the audited financial statements incorporated by reference in the
Registration Statement and the Prospectus; (B) that any unaudited condensed
financial statements of the Company included in any of the Company's Form 10-Q
Quarterly Reports, which may be incorporated by reference in the Registration
Statement and the Prospectus, do not comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act and the
applicable published rules and regulations thereunder, or that material
modifications should be made to such unaudited financial statements for them to
be in conformity with generally accepted accounting principles; or (C) that,
except in all instances as set forth or contemplated in the Registration
Statement or the Prospectus, (i) at the date of the latest available unaudited
financial statements of the Company read by them and at a subsequent date, not
more than five business days before the Closing Date, there has been any change
in the capital stock or long-term debt of the Company, as compared with amounts
shown in the latest balance sheet of the Company included or incorporated by
reference in the Registration Statement and the Prospectus, except for normally
scheduled reductions in the Company's long-term debt, and (ii) for the period
from the date of the latest financial statements included or incorporated by
reference in the Prospectus to the date of the latest available interim
financial statements read by them and to the aforementioned date not more than
five business days prior to the Closing Date there was any decrease, as compared
with the corresponding period in the preceding twelve month period, in the
Company's operating revenues, operating income or net income or (iii) there was
any decrease in the ratio of earnings to fixed charges for the twelve months
ended the date of such latest available interim financial statements as compared
to such ratio for the twelve months ended the date of the latest financial
statements included or incorporated by reference in the Prospectus, except as
set forth in such letter, in which latter case the letter shall be accompanied
by an explanation by the Company as to the significance thereof unless such
explanation is not deemed necessary by the Managers; and (3) that they have
compared certain dollar amounts designated by the Company and disclosed in the
Registration Statement and Prospectus with such dollar amounts contained in the
general accounting records of the Company or derived directly from such records
by analysis or computation, and have found such dollar amounts to be in
agreement therewith, except as otherwise specified in such letter in which
latter case the letter shall be accompanied by an explanation by the Company as
to the significance thereof unless such explanation is not deemed necessary by
the Managers.
The form of letter shall reflect the inclusion of any subsequently
dated financial information, the incorporation by reference of any subsequently
filed Annual Report on Form 10-K or Quarterly Report on Form 10-Q and/or the
inclusion in the Prospectus of any financial information.
Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been any change or decrease specified in the letter required by this subsection
(e) which is, in the judgment of the Managers, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or the delivery
of the Offered Securities as contemplated by the Registration Statement and the
Prospectus.
(f) At the Closing Date the Managers shall have received a
certificate, dated as of the Closing Date, signed by the President or a Vice
President and the Treasurer or the Secretary of the Company, to the effect that
(A) to the best of the knowledge of the signers, no stop order suspending the
effectiveness of the Registration Statement has been issued under the Securities
Act and no proceedings therefor have been instituted or threatened by the
Commission, (B) the order of the Commission referred to in subsection (b) of
Section 1 of the Underwriting Agreement is, to the best of the knowledge of the
signers, in full force and effect, and (C) since the respective dates as of
which information is given in the Registration Statement or Prospectus, there
has been no (x) material adverse change in the condition, financial or
otherwise, or in the earnings of the Company or (y) adverse development
concerning the Company's business or assets which would result in a material
adverse change in its prospective financial condition or results of operations,
except such changes as are set forth or contemplated in the Registration
Statement or the Prospectus (including financial statements and notes thereto
contained in the Incorporated Documents).
8
(g) All proceedings to be taken in connection with the
issuance and sale of the Offered Securities by the Company as contemplated in
the Underwriting Agreement shall be satisfactory in form and substance to
Underwriters' Counsel.
In case any of the conditions specified in this Section 4 shall
not have been fulfilled, the Underwriting Agreement may be terminated by the
Managers with the consent of Underwriters who have agreed to purchase in the
aggregate more than fifty percent of the total principal amount of the Offered
Securities upon delivering written notice thereof to the Company. Any such
termination shall be without liability of any party to any other party except as
otherwise provided in subsection (f) of Section 3 of the Underwriting Agreement.
5. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
of the Underwriters and each person, if any, who controls any of the
Underwriters 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 (1) the Registration Statement or any
amendment to the Registration Statement 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, or (2) the Prospectus or the Prospectus
as amended or supplemented, if such losses, claims, damages or liabilities arise
out of or are based upon the use of the Prospectus or the Prospectus as amended
or supplemented after the Company shall have amended or supplemented the
Prospectus, or any omission or alleged omission to state therein a 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 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, (ii) any statement made in the Form
T-1 filed by the Trustee as an exhibit to the Registration Statement or (iii)
the failure of any Underwriter to deliver (either directly or through the
Managers) a copy of the Prospectus (excluding the Incorporated Documents), or of
the Prospectus as amended or supplemented after it shall have been amended or
supplemented by the Company (excluding the Incorporated Documents), to any
person to whom a copy of any preliminary prospectus shall have been delivered by
or on behalf of such Underwriter to whom any Offered 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 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 any 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
9
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 to deliver (either directly or through the Managers) a copy
of the Prospectus (excluding the Incorporated Documents), or of the Prospectus
as amended or supplemented after it shall have been amended or supplemented by
the Company (excluding the Incorporated Documents), 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 Offered 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.
(c) Promptly after receipt by a party indemnified under this
Section 5 (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 5 (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 5. 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 hereunder), with counsel satisfactory
to such indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert and
conduct such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. 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 5 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 connection with the
assertion of legal defenses 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, approved by the
Managers in the case of subsection (a), representing the indemnified parties
under subsection (a) who are parties to such action), (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii).
(d) If the indemnification provided for in this Section 5
shall be unenforceable under applicable law by an indemnified party, the
indemnifying party 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 5 shall be unenforceable, in such
proportion as shall be appropriate to reflect the relative fault of the
indemnifying party 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 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 indemnifying party if
the indemnifying party 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
indemnifying party 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 contributions pursuant to this
subparagraph were to be determined solely by pro rata
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allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above.
(e) The indemnity and contribution agreements contained in
this Section 5 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, its directors or officers or any person
controlling the Company and (iii) delivery of and payment for any of the Offered
Securities.
6. Termination.
(a) If the Offered Securities are being purchased for the
purpose of resale, the Underwriting Agreement may be terminated, at any time
prior to the Closing Date, by the Managers with the consent of Underwriters who
have agreed to purchase in the aggregate more than fifty percent of the total
principal amount of the Offered Securities, if (a) there shall have occurred any
general suspension or material limitation on trading in securities on the New
York Stock Exchange or by the Commission or by any federal or state agency or by
the decision of any court, any limitation on prices for such trading or any
restrictions on the distribution of securities, (b) trading in any securities of
the Company shall have been suspended by the Commission or a national securities
exchange, (c) a general banking moratorium on commercial banking activities in
New York shall have been declared either by federal or New York State
authorities, (d) the rating assigned by any nationally recognized securities
rating agency to any securities of the Company as of the date of the
Underwriting Agreement shall have been lowered since that date, or (e) there
shall have occurred any outbreak or material escalation of hostilities or other
calamity or crisis, the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Managers, impracticable to
market the Offered Securities.
(b) Any termination of the Underwriting Agreement pursuant
to this Section 6 shall be without liability of any party to any other party
except as otherwise provided in subsection (f) of Section 3.
7. Default by an Underwriter.
If any one or more Underwriters shall fail to purchase and pay for
any of the Offered Securities agreed to be purchased by such Underwriter or
Underwriters hereunder and such failure to purchase shall constitute a default
in the performance of its or their obligations under the Underwriting Agreement,
the remaining Underwriters shall be obligated severally to take up and pay for
(in the respective proportions which the amount of Offered Securities set forth
opposite their names in Schedule I to the Underwriting Agreement bears to the
aggregate amount of Offered Securities set opposite the names of all the
remaining Underwriters) the Offered Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of Offered Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase (less such aggregate
amount of Offered Securities as are purchased by substituted underwriters
selected by the Managers with the approval of the Company or selected by the
Company with the approval of the Managers) shall exceed 10% of the aggregate
amount of Offered Securities set forth in such Schedule I, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Offered Securities, and if such nondefaulting
Underwriters do not purchase all the Offered Securities, the Underwriting
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company (except as otherwise provided in subsection (f) of Section 3). In
the event of a default by an Underwriter as set forth in this Section 7, the
Closing Date shall be postponed for such period, not exceeding seven calendar
days, as the Company and the Managers shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in the Underwriting
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default thereunder.
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8. Notice.
All communications under the Underwriting Agreement will be
effective only on receipt, and, if sent to the Managers, will be mailed,
delivered or telegraphed and confirmed to them, at the address, or telephoned to
them at the number, specified in the Underwriting Agreement and to Sidley &
Austin, Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, attention: Xxxxxx X.
Xxxx, Xx.; or, if sent to the Company, will be mailed, delivered or telegraphed
and confirmed to it in care of Central and South West Corporation, 1616 Xxxxxxx
Xxxxxxx Freeway, X.X. Xxx 000000, Xxxxxx, Xxxxx 00000, attention of Xxxxxxx X.
Xxxx, in each case with written confirmation of such communication sent to
Milbank, Tweed, Xxxxxx & XxXxxx, 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention: Xxxxxx X. Xxxxxxxx, Esq.
9. Successors.
The Underwriting Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 5 of the
Underwriting Agreement, and no other person will have any right or obligation
hereunder and no other person (including a purchaser, as a purchaser, from any
Underwriter of any of the Offered Securities) shall acquire or have any rights
under or by virtue of the Underwriting Agreement.
10. Governing Law.
The Underwriting Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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