EXHIBIT 1.01
Public Service Company of Oklahoma
Series A Medium-Term Notes Due Not Less Than
9 Months from Date of Issue
DISTRIBUTION AGREEMENT
February 26, 1996
Smith Barney Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs:
Public Service Company of Oklahoma, an Oklahoma
corporation (the "Company"), confirms its agreement
with Smith Barney Inc. and Morgan Stanley & Co.
Incorporated (each referred to as an "Agent" and
collectively referred to as the "Agents") with respect
to the issue and sale by the Company of its Medium-Term
Notes, Series A, described herein (the "Notes"). The
Notes are to be issued pursuant to an indenture dated
as of February 1, 1996, as supplemented and as the same
may from time to time be amended or supplemented (the
"Indenture"), between the Company and Liberty Bank and
Trust Company of Tulsa, National Association, as
trustee (the "Trustee"). As of the date hereof, the
Company has authorized the issuance and sale of up to
$75,000,000 aggregate principal amount of Notes through
the Agents pursuant to the terms of this Agreement. It
is understood, however, that the Company may from time
to time authorize the issuance of additional Notes and
that such additional Notes may be sold through or to
the Agents pursuant to the terms of this Agreement, all
as though the issuance of such Notes were authorized as
of the date hereof. Until the Release Date (as defined
in the Indenture), the Notes will be secured as to
payment of principal and interest by one or more series
of First Mortgage Bonds (the "First Mortgage Bonds")
issued, pledged and delivered by the Company to the
Trustee. The First Mortgage Bonds will be issued
pursuant to the provisions of the Company's Indenture
dated July 1, 1945, as supplemented and as the same may
from time to time be amended or supplemented (the
"First Mortgage Indenture") to Liberty Bank and Trust
Company of Tulsa, National Association, as Trustee (the
"First Mortgage Trustee").
This Agreement provides both for the sale of Notes
by the Company directly to purchasers, in which case
the Agents will act as agents of the Company in
soliciting Note purchases, and (as may from time to
time be agreed to by the Company and the applicable
Agent) to an Agent as principal for resale to
purchasers.
The Company has filed with the Securities and
Exchange Commission (the "SEC") a registration
statement on Form S-3 (No. 333-00973) for the
registration of debt securities, including the Notes,
under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations
of the SEC under the 1933 Act (the "1933 Act
Regulations"). Such registration statement has been
declared effective by the SEC and the Indenture has
been qualified under the Trust Indenture Act of 1939,
as amended (the "1939 Act"). Such registration
statement, excluding Form T-1 (and any further
registration statements which may be filed by the
Company for the purpose of registering additional Notes
and in connection with which this Agreement is
incorporated by reference) and the prospectus
constituting a part thereof, and any prospectus
supplements and pricing supplements relating to the
Notes, including all documents incorporated therein by
reference, as from time to time amended or supplemented
by the filing of documents pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or
the 1933 Act or otherwise, are referred to herein as
the "Registration Statement" and the "Prospectus",
respectively.
I. Appointment as Agents.
A. Appointment of Agents. Subject to the terms
and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes
directly on its own behalf, the Company hereby appoints
the Agents as its agents for the purpose of soliciting
purchases of the Notes from the Company by others and
agrees that, except as otherwise contemplated herein,
whenever the Company determines to sell Notes directly
to an Agent as principal for resale to others, it will
enter into a Terms Agreement (hereafter defined)
relating to such sale in accordance with the provisions
of Section 3(b) hereof. The Agents are authorized to
appoint sub-agents or to engage the services of any
other broker or dealer in connection with the offer or
sale of the Notes. The Company agrees that, during the
period the Agents are acting as the Company's agents
hereunder, the Company will not contact or solicit
potential investors introduced to it by an Agent to
purchase the Notes. The Company may appoint, upon 3
business days prior written notice to the Agents,
additional persons to serve as Agents hereunder, but
only if each such additional person agrees to be bound
by all of the terms of this Agreement as an Agent.
B. Reasonable Best Efforts Solicitations; Right
to Reject Offers. Upon receipt of instructions from
the Company, each Agent will use its reasonable best
efforts to solicit purchases of such principal amount
of the Notes as the Company and such Agent shall agree
upon from time to time during the term of this
Agreement, it being understood that the Company shall
not approve the solicitation of purchases of Notes in
excess of the amount which shall be authorized by the
Company from time to time or in excess of the principal
amount of Notes registered pursuant to the Registration
Statement. The Agents will have no responsibility for
maintaining records with respect to the aggregate
principal amount of Notes sold, or of otherwise
monitoring the availability of Notes for sale under the
Registration Statement. Each Agent will communicate to
the Company, orally or in writing, each offer to
purchase Notes, other than those offers rejected by
such Agent. Each Agent shall have the right, in its
discretion reasonably exercised, to reject any proposed
purchase of Notes, as a whole or in part, and any such
rejection shall not be deemed a breach of such Agent's
agreement contained herein. The Company may accept, in
its discretion reasonably exercised, or reject, and any
such rejection shall not be deemed a breach of the
Company's agreement contained herein, any proposed
purchase of the Notes, in whole or in part.
C. Solicitations as Agent; Purchases as
Principal. In soliciting purchases of the Notes on
behalf of the Company, the Agents shall act solely as
agents for the Company and not as principal. An agent
shall make reasonable best efforts to assist the
Company in obtaining performance by each purchaser
whose offer to purchase Notes has been solicited by
such Agent and accepted by the Company. The Agents
shall not have any liability to the Company in the
event any such purchase is not consummated for any
reason. An Agent shall not have any obligation to
purchase Notes from the Company as principal, but each
Agent may agree with the Company from time to time to
purchase Notes as principal. Any such purchase of
Notes by an Agent as principal shall be made pursuant
to a Terms Agreement in accordance with Section 3(b)
hereof.
D. Reliance. The Company and each Agent agree
that any Notes the placement of which such Agent
arranges shall be placed by such Agent, and any Notes
purchased by such Agent shall be purchased, in reliance
on the representations, warranties, covenants and
agreements of the Company contained herein and on the
terms and conditions and in the manner provided herein.
E. Administrative Procedures. Procedural
details relating to the issue and delivery of the Notes
and the payment therefor, unless an Agent and the
Company shall otherwise agree, shall be as set forth in
the Administrative Procedures attached hereto as Annex
I as it may be amended from time to time by written
agreement between the Agents and the Company (the
"Administrative Procedures"). The provisions of the
Administrative Procedures shall apply to all
transactions contemplated hereunder other than those
made pursuant to a Terms Agreement. Each Agent and the
Company shall perform the respective duties and
obligations specifically provided to be performed by
each of them in the Administrative Procedures.
SECTION 2. Representations and Warranties.
a The Company represents and warrants to each
Agent as of the date hereof, as of the date of each
acceptance by the Company of an offer for the purchase
of Notes (whether through an Agent as agent or to an
Agent as principal), as of the date of each delivery of
Notes (whether through such Agent as agent or to the
Agent as principal) (the date of each such delivery to
an Agent as principal being hereinafter referred to as
a "Settlement Date"), and as of any time that the
Registration Statement or the Prospectus shall be
amended or supplemented (other than by an amendment or
supplement providing solely for a change in the
interest rates of Notes or similar changes) or there is
filed with the SEC any document incorporated by
reference into the Prospectus (other than any Current
Report on Form 8-K relating exclusively to the issuance
of debt securities under the Registration Statement,
unless the Agents shall otherwise specify) (each of the
times referenced above being referred to herein as a
"Representation Date") as follows:
i. Due Incorporation and Qualification. The
Company has been duly incorporated and is validly
existing as a corporation in good standing under
the laws of the State of Oklahoma with corporate
power and authority to own its properties and to
conduct its business as described in the
Prospectus; and the Company is duly qualified as a
foreign corporation to transact business and is in
good standing in each jurisdiction in which such
qualification is required, whether by reason of
the ownership or leasing of property or the
conduct of business, except where the failure to
so qualify or be in good standing would not result
in (A) a material adverse change in the condition,
financial or otherwise, or in the earnings of the
Company and its subsidiaries considered as one
enterprise or (B) a material adverse change in its
prospective financial condition or results of
operations, in either case whether or not arising
in the ordinary course of business.
ii. Subsidiaries. Each subsidiary of the
Company which is a significant subsidiary (each a
"Significant Subsidiary") as defined in Rule 405
of Regulation C of the 1933 Act Regulations has
been duly incorporated and is validly existing as
a corporation in good standing under the laws of
the jurisdiction of its incorporation, has
corporate power and authority to own its
properties and conduct its business as described
in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in
good standing in each jurisdiction in which such
qualification is required, whether by reason of
the ownership or leasing of property or the
conduct of business, except where the failure to
so qualify or be in good standing would not result
in (A) a material adverse change in the condition,
financial or otherwise, or the earnings of the
Company and its subsidiaries considered as one
enterprise or (B) a material adverse change in the
Company's prospective financial condition or
results of operations, in either case whether or
not arising in the ordinary course of business;
and all of the issued and outstanding capital
stock of each Significant Subsidiary has been duly
authorized and validly issued, is fully paid and
non-assessable and, except for directors'
qualifying shares, is owned by the Company,
directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
iii. Registration Statement and Prospectus.
At the time the Registration Statement became
effective, the Registration Statement complied, and as
of the applicable Representation Date will comply, in
all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and the 1939 Act and
the rules and regulations of the SEC promulgated
thereunder. The Registration Statement, at the time it
became effective, did not, and at each time thereafter
at which any amendment to the Registration Statement
becomes effective or any Annual Report on Form 10-K is
filed by the Company with the SEC and as of each
Representation Date, will not, contain an untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading. The Prospectus, as of the date hereof does
not, and as of each Representation Date will not,
contain an untrue statement of a material fact or omit
to state 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 representations and warranties in
this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus
resulting from the failure of any of the Agents to
furnish the Company with information pertaining to such
Agents and the sale of the Notes required to complete
the Registration Statement or the Prospectus, to
statements in the Form T-1 filed by the Trustee and
First Mortgage Trustee as exhibits to the Registration
Statement or to statements in or omissions from the
Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by the
Agents expressly for use in the Registration Statement
or Prospectus.
iv. Incorporated Documents. The documents
incorporated by reference in the Prospectus, at the
time they were or hereafter are filed with the SEC,
complied or when so filed will comply, as the case may
be, in all material respects with the requirements of
the 1934 Act and the rules and regulations promulgated
thereunder (the "1934 Act Regulations"), and, when read
together and with the other information in the
Prospectus, did not and will not contain an untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary in order to make the statements therein, in
the light of the circumstances under which they were or
are made, not misleading.
v. Accountants. The accountants who certified
the financial statements included or incorporated by
reference in the Prospectus are independent public
accountants within the meaning of the 1933 Act and the
1933 Act Regulations.
vi. [Intentionally Left Blank].
vii. Authorization and Validity of this
Agreement, the Indenture and the Notes. This Agreement
has been duly authorized, executed and delivered by the
Company; the Indenture has been duly authorized and
constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms,
except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting enforcement of
creditors' rights generally or by general equity
principles; the Notes have been duly and validly
authorized for issuance, offer and sale pursuant to
this Agreement and, when issued, authenticated and
delivered pursuant to the provisions of this Agreement
and the Indenture against payment of the consideration
therefor specified in the Prospectus or pursuant to any
Terms Agreement, the Notes will constitute valid and
legally binding obligations of the Company enforceable
in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to
or affecting enforcement of creditors' rights generally
or by general equity principles; the Notes and the
Indenture will be substantially in the form heretofore
delivered to the Agents and conform in all material
respects to the statements relating thereto contained
in the Prospectus; and the Notes will be entitled to
the benefits provided by the Indenture.
viii. Material Changes or Material
Transactions. Since the respective dates as of which
information is given in the Registration Statement and
the Prospectus, except as may otherwise be stated
therein or contemplated thereby (including the
financial statements and notes thereto included or
incorporated by reference in the Registration
Statement) and except as the Company may have furnished
supplemental information to each prospective Agent as
to matters to be reflected in the Prospectus, there has
been no (A) material adverse change in the condition,
financial or otherwise, or in the earnings of the
Company and its subsidiaries considered as one
enterprise 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, in either case
whether or not arising in the ordinary course of
business.
ix. No Defaults. Neither the Company nor
any of its Significant Subsidiaries is in violation of
its charter or in default in the performance or
observance of any obligation, agreement, covenant or
condition contained in any material contract,
indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it
or any of them or their properties is bound that would
result in (A) a material adverse change in the
condition, financial or otherwise, or in the earnings
of the Company and its subsidiaries considered as one
enterprise or (B) a material adverse change in its
prospective financial condition or results of
operations, in either case whether or not arising in
the ordinary course of business; or materially and
adversely affect the performance by the Company of the
obligations under this Agreement or consummation of the
transaction contemplated by this Agreement; the
execution and delivery of this Agreement and the
Indenture and the consummation of the transactions
contemplated herein, therein and pursuant to any
applicable Terms Agreement have been duly authorized by
all necessary corporate action and will not conflict
with or constitute a breach of, or default under, or
result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of
the Company or any of its Significant Subsidiaries
pursuant to, any material contract, indenture,
mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its
Significant Subsidiaries is a party or by which it or
any of them may be bound or to which any of the
property or assets of the Company or any such
subsidiary is subject, nor will such action result in
any violation of the provisions of the charter or
by-laws of the Company or any law, administrative
regulation or administrative or court order applicable
to the Company or any such subsidiary.
x. Authorization, Approval or Consent
Required. The Company is subject to the
jurisdiction of the Oklahoma Corporation
Commission ("OCC") which is vested with powers of
supervision, regulation and control over various
matters including the issuance of securities. No
authorization, approval or consent of any court or
governmental authority or agency is necessary in
connection with the sale of the Notes or the First
Mortgage Bonds hereunder, including under the
Public Utility Holding Company Act of 1935, as
amended (the "1935 Act"), except (i) for such
orders as are required by the OCC authorizing the
issuance and sale of the Notes and the First
Mortgage Bonds on terms consistent with this
Agreement, the Administrative Procedures and any
applicable Terms Agreement, which orders have been
obtained, are in full force and effect and have
been heretofore delivered to the Agents, and (ii)
as otherwise may be required under the 1933 Act or
the 1933 Act Regulations or state securities or
Blue Sky laws.
xi. Title to Property. The Company and its
subsidiaries have good and marketable title in fee
simple (or its equivalent under applicable law) to all
real property and good and marketable title to all
personal property owned by them which is material to
the business of the Company and its subsidiaries, in
each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus
or such as do not materially affect the value of such
property and do not interfere with the use made and
proposed to be made of such property by the Company and
its subsidiaries; and any real property and buildings
held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and
enforceable leases with such exceptions as are not
material and do not interfere with the use made and
proposed to be made of such property and buildings by
the Company and its subsidiaries.
xii. Environmental and Other Matters.
Except as set forth in the Registration Statement,
neither the Company nor its subsidiaries (in the
case of matters relating to environmental
protection, occupational safety and health and
equal employment opportunity, to the best of its
knowledge) (a) is in violation of any laws,
ordinances, governmental rules and regulations to
which it is subject or (b) has failed to obtain
any licenses, permits, franchises or other
governmental authorizations, necessary to the
ownership of its property or to the conduct of its
business, which violation or such failure to
obtain would materially adversely affect the
business, business prospects, profits, properties
or condition (financial or otherwise) of the
Company and its subsidiaries considered as one
enterprise.
b. Additional Certifications. Any certificate
signed by any director or officer of the Company and
delivered to the Agents or to counsel for the Agents in
connection with an offering of Notes or the sale of
Notes to the agent as principal shall be deemed a
representation and warranty by the Company to the
Agents as to the matters covered thereby on the date of
such certificate (unless otherwise specified in such
certificate) and at each Representation Date subsequent
thereto.
SECTION 3. Solicitations as Agent; Purchases as Principal.
a. Solicitations as Agent. On the basis of the
representations and warranties herein contained, but
subject to the terms and conditions herein set forth,
each Agent agrees, as the agent of the Company, to use
its reasonable best efforts to solicit offers and
receive offers to purchase the Notes upon the terms and
conditions set forth herein and in the Prospectus.
The Company reserves the right, in its sole
discretion, to suspend solicitation of purchases of the
Notes through an Agent, as agent, commencing at any
time for any period of time or permanently. As soon as
practicable, but in any case not later than one
business day after receipt of instructions from the
Company, such Agent will forthwith suspend solicitation
of purchases from the Company until such time as the
Company has advised such Agent that such solicitation
may be resumed.
The Company agrees to pay each Agent a
commission, in the form of a discount, equal to the
applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation
made by such Agent as set forth in Schedule A hereto.
An Agent may reallot any portion of the commission
payable pursuant hereto to dealers or purchasers in
connection with the offer and sale of any Notes.
The purchase price, interest rate, maturity
date and other terms of the Notes shall be agreed upon
by the Company and the Agents and set forth in a
pricing supplement to the Prospectus to be prepared
following each acceptance by the Company of an offer
for the purchase of Notes. Except as may be otherwise
provided in such supplement to the Prospectus, the
Notes will be issued in denominations of $100,000 or
any larger amount that is an integral multiple of
$1,000. All Notes sold through an Agent as agent will
be sold at 100% of their principal amount unless
otherwise agreed to by the Company and such Agent.
b. Purchases as Principal. Each sale of Notes to
an Agent as principal shall be made in accordance with
the terms contained herein and (unless the Company and
such Agent shall otherwise agree) pursuant to a
separate agreement which will provide for the sale of
such Notes to, and the purchase and reoffering thereof
by, such Agent. Each such separate agreement (which
may be an oral agreement) between such Agent and the
Company is herein referred to as a "Terms Agreement".
Unless the context otherwise requires, each reference
contained herein to "this Agreement" shall be deemed to
include any applicable Terms Agreement between the
Company and the applicable Agent. Each such Terms
Agreement, whether oral or in writing, shall be with
respect to such information (as applicable) as is
specified in Exhibit A hereto. An Agent's commitment
to purchase Notes as principal pursuant to any Terms
Agreement or otherwise shall be deemed to have been
made on the basis of the representations and warranties
of the Company herein contained and shall be subject to
the terms and conditions herein set forth. Each Terms
Agreement shall specify the principal amount of Notes
to be purchased by such Agent pursuant thereto, the
price to be paid to the Company for such Notes (which,
if not so specified in a Terms Agreement, shall be at a
discount equivalent to the applicable commission set
forth in Schedule A hereto), the time and place of
delivery of and payment for such Notes, any provisions
relating to rights of, and default by purchasers acting
together with such Agent in the reoffering of the
Notes, and such other provisions (including further
terms of the Notes) as may be mutually agreed upon.
Each Agent may utilize a selling or dealer group in
connection with the resale of the Notes purchased.
Such Terms Agreement shall also specify the
requirements for the officers' certificate, opinions of
counsel and comfort letter pursuant to Sections 7(b),
7(c) and 7(d) hereof.
SECTION 4. Covenants of the Company.
The Company covenants with each Agent as follows:
A. Notice of Certain Events. The Company will
notify the Agents immediately (i) of the effectiveness
of any amendment to the Registration Statement, (ii) of
the transmittal to the SEC for filing of any supplement
to the Prospectus, (iii) of the receipt of any comments
from the SEC with respect to the Registration Statement
or the Prospectus, (iv) of any request by the SEC for
any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for
additional information, and (v) of the issuance by the
SEC of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any
proceedings for that purpose. The Company will make
every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain
the lifting thereof at the earliest possible moment.
B. Notice of Certain Proposed Filings. The
Company will give the Agents notice of its intention to
file or prepare any additional registration statement
with respect to the registration of additional Notes,
any amendment to the Registration Statement or any
amendment or supplement to the Prospectus (other than
an amendment or supplement providing solely for a
change in the interest rates of Notes or the filing of
reports under the 1934 Act), whether by the filing of
documents pursuant to the 1933 Act or otherwise and
will furnish the Agents with copies of any such
amendment or supplement or other documents proposed to
be filed or prepared a reasonable time in advance of
such proposed filing or preparation, as the case may
be, and will not file any such amendment or supplement
or other documents in a form to which the Agents or
counsel for the Agents shall reasonably object.
C. Copies of the Registration Statement and the
Prospectus. The Company will deliver to the Agents as
many signed and conformed copies of the Registration
Statement (as originally filed) and of each amendment
thereto (including exhibits filed therewith or
incorporated by reference therein and documents
incorporated by reference in the Prospectus) as the
Agents may reasonably request. The Company will
furnish to the Agents as many copies of the Prospectus
(as amended or supplemented) as the Agents shall
reasonably request so long as the Agents are required
to deliver a Prospectus in connection with sales or
solicitations of offers to purchase the Notes.
D. Preparation of Pricing Supplements. The
Company will prepare, with respect to any Notes to be
sold through or to any Agent pursuant to this
Agreement, a Pricing Supplement with respect to such
Notes in a form previously approved by such Agent and
will file such Pricing Supplement pursuant to
Rule 424(b) under the 1933 Act not later than the close
of business of the SEC on the fifth business day after
the date on which such Pricing Supplement is first
used.
E. Revisions of Prospectus -- Material Changes.
Except as otherwise provided in subsection (l) of this
Section, if at any time during the term of this
Agreement any event shall occur or condition exist as a
result of which it is necessary, in the reasonable
opinion of counsel for the Agents (and concurred with
by counsel of the Company) or counsel for the Company,
to further amend or supplement the Prospectus in order
that the Prospectus will not include an untrue
statement of a material fact or omit to state any
material fact necessary in order to make the statements
therein not misleading in the light of the
circumstances existing at the time the Prospectus is
delivered to a purchaser, or if it shall be necessary,
in the reasonable opinion of counsel for the Agents
(and concurred with by counsel of the Company) or
counsel for the Company to amend or supplement the
Registration Statement or the Prospectus in order to
comply with the requirements of the 1933 Act or the
1933 Act Regulations, immediate notice shall be given,
and confirmed in writing, to the Agents to cease the
solicitation of offers to purchase the Notes in the
Agents' capacity as agents and to cease sales of any
Notes the Agents may then own as principal pursuant to
a Terms Agreement, and the Company will promptly
prepare and file with the SEC such amendment or
supplement, whether by filing documents pursuant to the
1934 Act, the 1933 Act or otherwise, as may be
necessary to correct such untrue statement or omission
or to make the Registration Statement and Prospectus
comply with such requirements.
F. Prospectus Revisions -- Periodic Financial
Information. Except as otherwise provided in
subsection (l) of this Section, on or prior to the date
on which there shall be released to the general public
in the form of a press release interim financial
statement information related to the Company with
respect to each of the first three quarters of any
fiscal year or preliminary financial statement
information with respect to any fiscal year, the
Company shall furnish such information to the Agents,
confirmed in writing, and shall cause the Prospectus to
be amended or supplemented to include or incorporate by
reference financial information with respect thereto
and corresponding information for the comparable period
of the preceding fiscal year, as well as such other
information and explanations as shall be necessary for
an understanding thereof or as shall be required by the
1933 Act or the 1933 Act Regulations.
G. Prospectus Revisions -- Audited Financial
Information. Except as otherwise provided in
subsection (l) of this Section, on or prior to the date
on which there shall be released to the general public
in the form of a press release financial information
included in or derived from the audited financial
statements of the Company for the preceding fiscal
year, the Company shall cause the Registration
Statement and the Prospectus to be amended, whether by
the filing of documents pursuant to the 1934 Act, the
1933 Act or otherwise, to include or incorporate by
reference such audited financial statements and the
report or reports, and consent or consents to such
inclusion or incorporation by reference, of the
independent accountants with respect thereto, as well
as such other information and explanations as shall
be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or
the 1933 Act Regulations.
H. Earnings Statements. The Company will make
generally available to its security holders as soon as
practicable, but in any event not later than 90 days
after (i) the effective date of the Registration
Statement, (ii) the effective date of each post-
effective amendment to the Registration Statement, and
(iii) the date of each filing by the Company with the
SEC of an Annual Report on Form 10-K that is
incorporated by reference in the Registration
Statement, an earning statement of the Company and its
subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations
of the SEC thereunder (including, at the option of the
Company, Rule 158).
I. Blue Sky Qualifications. The Company will
endeavor, in cooperation with the Agents, to qualify
the Notes for offering and sale under the applicable
securities laws of such states and other jurisdictions
of the United States as the Agents may designate and as
approved by the Company, and will maintain such
qualifications in effect for as long as may be required
for the distribution of the Notes and the First
Mortgage Bonds; provided, however, that the Company
shall not be obligated to file any general consent to
service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so
qualified. The Company will file such statements and
reports as may be required by the laws of each
jurisdiction in which the Notes or the First Mortgage
Bonds have been qualified as above provided. The
Company will promptly advise the Agents of the receipt
by the Company of any notification with respect to the
suspension of the qualification of the Notes or the
First Mortgage Bonds for sale in any such state or
jurisdiction or the initiating or threatening of any
preceding for such purpose.
J. 1934 Act Filings. The Company, during the
period when the Prospectus is required to be delivered
under the 1933 Act, will file promptly all documents
required to be filed with the SEC pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act.
K. Stand-Off Agreement. If required pursuant to
the terms of a Terms Agreement, between the date of any
Terms Agreement and the Settlement Date with respect to
such Terms Agreement, the Company will not, without the
applicable Agent's prior consent, offer or sell, or
enter into any agreement to sell, any debt securities
of the Company (other than the Notes that are to be
sold pursuant to such Terms Agreement, notes issued
pursuant to a credit facility or other similar
agreement and commercial paper in the ordinary course
of business).
L. Suspension of Certain Obligations. The
Company shall not be required to comply with the
provisions of subsections (e), (f) or (g) of this
Section during any period from the time the Agents
shall have suspended solicitation of purchases of the
Notes in their capacity as agents pursuant to a request
from the Company to the time the Company shall determine
that solicitation of purchases of the Notes should
be resumed or shall subsequently enter into a new Terms
Agreement with either or both of the Agents.
M. Condition to Agency Transactions. Any person
who has agreed to purchase Notes as the result of an
offer to purchase solicited by an Agent shall have the
right to refuse to purchase and pay for such Notes if,
on the related settlement date fixed pursuant to the
Administrative Procedures, (i) there has been, since
the date on which such person agreed to purchase the
Notes (the "Trade Date"), (A) any material adverse
change in the condition, financial or otherwise, or in
the earnings of the Company and its subsidiaries
considered as one enterprise or (B) any adverse
development concerning the Company's business or assets
which would result in a material adverse change in the
prospective financial condition or results of
operations, in either case, whether or not arising in
the ordinary course of business, or (ii) 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 purchaser,
impracticable to purchase the Notes, or (iii) trading
in any securities of the Company has been suspended by
the SEC or a national securities exchange, or if
trading generally on the New York Stock Exchange shall
have been suspended, or any limitation on prices for
such trading or any restrictions on the distribution of
securities has been promulgated, by said exchange or by
order of the SEC or any other Federal governmental
authority, or if a general banking moratorium shall
have been declared by either Federal or New York
authorities, or (iv) the rating assigned by any
nationally recognized securities rating agency to any
debt securities of the Company as of the Trade Date
shall have been lowered since that date.
SECTION 5. Conditions of Obligations.
The obligations of each Agent to solicit
offers to purchase the Notes as agent of the Company,
the obligations of any purchasers of the Notes sold
through each Agent as agent, and any obligation of an
Agent to purchase Notes pursuant to a Terms Agreement
or otherwise will be subject to the accuracy of the
representations and warranties on the part of the
Company herein and to the accuracy of the statements of
the Company's officers made in any certificate
furnished pursuant to the provisions hereof, to the
performance and observance by the Company of all its
covenants and agreements herein contained and to the
following additional conditions precedent:
A. Legal Opinions. On the date hereof, the
Agents shall have received the following legal
opinions, dated as of the date hereof and in form and
substance satisfactory to the Agents:
(i) Opinion of Company Counsel. The
opinion of Milbank, Tweed, Hadley & McCloy, counsel
to Company, (subject to the reservation that they
have relied upon the opinion of Doerner, Saunders,
Daniel & Anderson, Tulsa, Oklahoma, and upon the
opinion of Wagstaff, Alvis, Stubbeman, Seamster &
Longacre, L.P.P., Abilene, Texas, each counsel
for the Company, as to all matters governed by
Oklahoma and Texas law, respectively), substantially
to the effect set forth in Exhibit B;
(ii) Opinion of Counsel to the Agents.
The opinion of Sidley & Austin, counsel to the
Agents, (subject to the same reservation as that
expressed in subsection (1) of this Section 5(a)),
substantially to the effect set forth in Exhibit
C;
(iii) Opinion of Oklahoma Counsel to the
Company. The opinion of Doerner, Saunders, Daniel &
Anderson, Tulsa, Oklahoma, Oklahoma counsel for the
Company, substantially to the effect set forth in
Exhibit D; and
(iv) Opinion of Texas Counsel to the
Company. The opinion Wagstaff, Alvis, Stubbeman,
Seamster & Longacre, L.P.P., Abilene, Texas, Texas
counsel for the Company, substantially to the
effect set forth in Exhibit E.
B. Officers' Certificate. At the date hereof
the Agents shall have received a certificate of the
President or any Vice President and the chief financial
officer, chief accounting officer, treasurer,
controller or secretary of the Company and dated as of
the date hereof, to the effect that (i) since the
respective dates as of which information is given in
the Registration Statement and the Prospectus or since
the date of any applicable Terms Agreement, 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 the Registration
Statement or Prospectus (including financial statements
and notes thereto contained in any document
incorporated by reference therein), (ii) the order of
the OCC referred to in subsection (x) of Section 2 of
this Distribution Agreement is, to the best of the
knowledge of the applicable signers, in full force and
effect, and (iii) to the best of the knowledge of the
applicable signers, no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been
initiated or threatened by the SEC.
C. Comfort Letter. On or prior to the date
hereof, the Agents shall have received from Arthur
Anderson LLP a letter confirming that they are
independent public accountants with respect to the
Company within the meaning of the 1933 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 1933 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 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 1934 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 date hereof, 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 Agents; 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 Agents.
The form of letter shall reflect the
inclusion of any financial information filed subsequent
to the date of the Registration Statement, 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
statistical or 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 (c) which is, in the reasonable
judgment of the Agents, so material and adverse as to
make it impractical or inadvisable to proceed with the
offering or the delivery of the Notes as contemplated
by the Registration Statement and the Prospectus.
D. First Mortgage Bonds. The Company shall have
delivered to the Trustee, as security for the payment
of the principal and interest on the Notes, First
Mortgage Bonds in the same aggregate principal amount
and with the same stated rate, maturity dates and
redemption provisions as the Notes they secure. The
First Mortgage Bonds will be issued by the Company
under its Indenture dated July 1, 1945 between the
Company and Liberty Bank and Trust Company of Tulsa,
National Association, as heretofore amended and
supplemented and as to be further amended and
supplemented by a supplemental indenture or supplement
indentures creating the series in which the First
Mortgage Bonds are to be issued.
E. Other Documents. On the date hereof and on
each Settlement Date with respect to any applicable
Terms Agreement, counsel to the Agents shall have been
furnished with such documents and opinions as such
counsel may reasonably require for the purpose of
enabling such counsel to pass upon the issuance and
sale of Notes as herein contemplated and related
proceedings, or in order to evidence the accuracy and
completeness of any of the representations and
warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken
by the Company in connection with the issuance and sale
of Notes as herein contemplated shall be reasonably
satisfactory in form and substance to the Agents and to
counsel to the Agents.
If any condition specified in this Section 5 shall
not have been (i) fulfilled when and as required to be
fulfilled or (ii) waived by the applicable Agent or
Agents, this Agreement (or, at the option of the
applicable Agent, any applicable Terms Agreement) may
be terminated by the Agents by notice to the Company at
any time and any such termination shall be without
liability of any party to any other party, except that
the covenant regarding provision of an earnings
statement set forth in Section 4(h) hereof, the
provisions concerning payment of expenses under
Section 10 hereof, the indemnity and contribution
agreement set forth in Sections 8 and 9 hereof, the
provisions concerning the representations, warranties
and agreements to survive delivery of Section 11 hereof
and the provisions set forth under "Parties" of Section
15 hereof shall remain in effect.
SECTION 6. Delivery of and Payment for Notes Sold
through the Agents.
Delivery of Notes sold through an Agent as agent
shall be made by the Company to such Agent for the
account of any purchaser only against payment therefor
in immediately available Federal funds. In the event
that a purchaser shall fail either to accept delivery
of or to make payment for a Note on the date fixed for
settlement, the applicable Agent shall promptly notify
the Company and deliver the Note to the Company, and,
if such Agent has theretofore paid the Company for such
Note, the Company will promptly return such funds to
such Agent. If such failure occurred for any reason
other than default by such Agent in the performance of
its obligations hereunder, the Company will reimburse
such Agent on an equitable basis for its loss of the
use of the funds for the period such funds were
credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants and agrees with the
Agents that:
A. Reaffirmation of Representations and
Warranties. Each acceptance by the Company of an offer
for the purchase of Notes, and each delivery of Notes
to the applicable Agent pursuant to a Terms Agreement,
shall be deemed to be an affirmation that the
representations and warranties of the Company contained
in this Agreement and in any certificate theretofore
delivered to the Agents pursuant hereto are true and
correct at the time of such acceptance or sale, as the
case may be, and the Company will use its best efforts
to undertake that such representations and warranties
will be true and correct at the time of delivery to the
purchaser or his agent, or to the Agents, of the Note
or Notes relating to such acceptance or sale, as the
case may be, as though made at and as of each such time
(and it is understood that such representations and
warranties shall relate to the Registration Statement,
Prospectus and any such certificate as amended and
supplemented to each such time).
B. Subsequent Delivery of Certificates. Each
time that the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an
amendment or supplement providing solely for a change
in the interest rates of Notes or similar changes, and,
unless the Agents shall otherwise specify, other than
by an amendment or supplement which relates exclusively
to an offering of debt securities other than the Notes
and other than by a pricing supplement) or there is
filed with the SEC any document incorporated by
reference into the Prospectus unless waived by the
Agents (other than any Current Report on Form 8-K) or
(if required pursuant to the terms of a Terms
Agreement) the Company sells Notes to an Agent pursuant
to a Terms Agreement, the Company shall furnish or
cause to be furnished to the Agents forthwith a
certificate dated the date of filing with the SEC of
such supplement or document, the date of effectiveness
of such amendment, or the date of such sale, as the
case may be, in form reasonably satisfactory to the
Agents to the effect that the statements contained in
the certificate referred to in Section 5(b) hereof
which was last furnished to the Agents is true and
correct at the time of such amendment, supplement,
filing or sale, as the case may be, as though made at
and as of such time (except that such statements shall
be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in said
Section 5(b), modified as necessary to relate to the
Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such
certificate.
C. Subsequent Delivery of Legal Opinions. Each
time that the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an
amendment or supplement providing solely for a change
in the interest rates of the Notes or similar changes
or solely for the inclusion of additional financial
information, and, unless the Agents shall otherwise
specify, other than by an amendment or supplement which
relates exclusively to an offering of debt securities
other than the Notes and other than by a pricing
supplement) or there is filed with the SEC any document
incorporated by reference into the Prospectus unless
waived by the Agents (other than any Current Report on
Form 8-K or Quarterly Report on Form 10-Q), or (if
required pursuant to the terms of a Terms Agreement)
the Company sells Notes to an Agent pursuant to a Terms
Agreement, the Company shall furnish or cause to be
furnished forthwith to the Agents and to counsel to the
Agents the written opinions of each of Milbank, Tweed,
Hadley & McCloy, counsel to the Company, Doerner,
Saunders, Daniel & Anderson, Oklahoma counsel to the
Company, and Wagstaff, Alvis, Stubbeman, Seamster &
Longacre, L.L.P., Texas counsel to the Company, or
other counsel satisfactory to the Agents dated the date
of filing with the SEC of such supplement or document,
the date of effectiveness of such amendment, or the
date of such sale, as the case may be, in form and
substance reasonably satisfactory to the Agents, of the
same tenor as the respective opinions referred to in
Sections 5(a)(1), 5(a)(3) and 5(a)(4) hereof, but
modified, as necessary, to relate to the Registration
Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion;
or, in lieu of such opinion, counsel last furnishing
such opinion to the Agents shall furnish the Agents
with a letter to the effect that the Agents may rely on
such last opinion to the same extent as though it was
dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be
deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of
delivery of such letter authorizing reliance).
D. Subsequent Delivery of Comfort Letters. Each
time that the Registration Statement or the Prospectus
shall be amended or supplemented to include additional
financial information or there is filed with the SEC
any document incorporated by reference into the
Prospectus which contains additional financial
information unless waived by the Agents (other than in
a pricing supplement or Current Report on Form 8-K) or,
(if required pursuant to the terms of a Terms
Agreement) the Company sells Notes to an Agent pursuant
to a Terms Agreement, the Company shall cause Arthur
Andersen LLP forthwith to furnish the Agents a letter,
dated the date of effectiveness of such amendment,
supplement or document with the SEC , or the date of
such sale, as the case may be, in form reasonably
satisfactory to the Agents, of the same tenor as the
portions of the letter referred to in clauses (i) and
(ii) of Section 5(c) hereof but modified to relate to
the Registration Statement and Prospectus, as amended
and supplemented to the date of such letter, and of the
same general tenor as the portions of the letter
referred to in clauses (iii) and (iv) of said Section
5(c) with such changes as may be necessary to reflect
changes in the financial statements and other
information derived from the accounting records of the
Company; provided, however, that if the Registration
Statement or the Prospectus is amended or supplemented
solely to include financial information as of and for a
fiscal quarter, Arthur Andersen LLP may limit the scope
of such letter to the unaudited financial statements
included in such amendment or supplement unless any
other information included therein of an accounting,
financial or statistical nature is of such a nature
that, in the reasonable judgment of the Agents, such
letter should cover such other information.
SECTION 8. Indemnification.
a. The Company agrees to indemnify and hold
harmless each of the Agents and each person, if any,
who controls each of the Agents within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934
Act, from and against any and all losses, claims,
damages or liabilities, joint or several, to which such
Agent or controlling person may become subject under
the 1933 Act, the 1934 Act or the common law or
otherwise, and to reimburse each such Agent or such
controlling person for any reasonable legal or other
expenses (including, to the extent hereinafter
provided, reasonable counsel fees) incurred by it or
them in connection with defending against any such
losses, claims, damages or liabilities, arising out of
or based upon any untrue statement or alleged untrue
statement of a material fact contained in the
Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any
amendments or supplements thereto), or any omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading; provided, however,
that the indemnity agreement contained in this
subsection (a) shall not apply to any such losses,
claims, damages or liabilities arising out of or based
upon (i) any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if
such statement or omission was made in reliance upon
and in conformity with information furnished in writing
to the Company by any of the Agents 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 Agent to deliver a copy of the
Prospectus (excluding any documents incorporated by
reference), or of the Prospectus as amended or
supplemented after it shall have been amended or
supplemented by the Company (excluding any documents
incorporated by reference), to any person to whom a
copy of any preliminary prospectus shall have been
delivered by or on behalf of such Agent to whom any
Notes shall have been sold by such Agent, as such
delivery may be required by the 1933 Act and the rules
and regulations of the Commission thereunder.
b. Each of the Agents 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 1933 Act or Section 20
of the 1934 Act, each other Agent and each person, if
any, who so controls any such other Agent, 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 1933 Act, the 1934
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 the
Prospectus or amendment or supplement to the Prospectus
or upon any omission or alleged omission to state in
any thereof a material fact required to be stated
therein or necessary to make the statements therein not
misleading if such statement or omission was made in
reliance upon and in conformity with information
furnished in writing to the Company by such Agent for
use in the Registration Statement or the Prospectus or
any amendment or supplement to either thereof, or
(ii) the failure of such Agent to deliver (either
directly or through the Managers) a copy of the
Prospectus (excluding any documents incorporated by
reference), or of the Prospectus as amended or
supplemented after it shall have been amended or
supplemented by the Company (excluding any documents
incorporated by reference), to any person to whom a
copy of any preliminary prospectus shall have been
delivered by or on behalf of such Agent and to whom any
Notes shall have been sold by or through such Agent, as
such delivery may be required by the 1933 Act and the
rules and regulations of the Commission thereunder.
c. Promptly after receipt by a party indemnified
under this Section 8 (an "indemnified party") of notice
of the commencement of
any action, such indemnified party will, if a claim in
respect thereof is to be made against a party granting
an indemnity under this Section 8 (the "indemnifying
party"), notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any
liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may
elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense
thereof (thereby conceding that the action in question
is subject to indemnification by the indemnifying party
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 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 Agents 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 this 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 8 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
8 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 1933 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 Agents agree
that it would not be just and equitable if
contributions pursuant to this subparagraph were to be
determined solely by pro rata allocation or by any
other method of allocation which does not take account
of the equitable considerations referred to above.
e. The indemnity and contribution agreements
contained in this Section 8 and the representations and
warranties of the Company in the Distribution Agreement
shall remain operative and in full force regardless of
(i) any termination of the Distribution Agreement,
(ii) any investigation made by or on behalf of any
Agent or any person controlling any Agent 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 Notes.
SECTION 9. Payment of Expenses.
The Company will pay all expenses incident to the
performance of its obligations under this Agreement,
including:
A. The preparation and filing of the
Registration Statement and all amendments thereto and
the Prospectus and any amendments or supplements
thereto;
B. The preparation, filing and reproduction of
this Agreement;
C. The preparation, printing, issuance and
delivery of the Notes, including any fees and expenses
relating to the use of book-entry notes;
D. The fees and disbursements of the Company's
accountant and counsel, of the Trustee and its counsel
and of any calculation agent;
E. The reasonable fees and disbursements of
counsel to the Agents incurred from time to time in
connection with the transactions contemplated hereby;
F. The qualification of the Notes and the First
Mortgage Bonds under state securities laws in
accordance with the provisions of Section 4(i) hereof,
including filing fees and the reasonable fees and
disbursements of counsel for the Agents in connection
therewith and in connection with the preparation of any
Blue Sky Survey and any Legal Investment Survey, not
exceeding, however, $5,000 in the aggregate;
G. The printing and delivery to the Agents in
quantities as hereinabove stated of copies of the
Registration Statement and any amendments thereto, and
of the Prospectus and any amendments or supplements
thereto, and the delivery by the Agents of the
Prospectus and any amendments or supplements thereto in
connection with solicitations or confirmations of sales
of the Notes;
H. The preparation, printing, reproducing and
delivery to the Agents of copies of the Indenture and
all supplements and amendments thereto;
I. Any fees charged by rating agencies for the
rating of the Notes;
J. The fees and expenses, if any, incurred with
respect to any filing with the National Association of
Securities Dealers, Inc.;
K. Any advertising and other out-of-pocket
expenses of the Agents incurred with the written
approval of the Company;
L. The cost of preparing, and providing any
CUSIP or other identification numbers for, the Notes
and the First Mortgage Bonds;
M. The fees and expenses of any Depositary (as
defined in the Indenture) and any nominees thereof in
connection with the Notes; and
N. The fees and expenses, if any, incurred in
connection with any filing with or approval by the OCC
in connection with the issuance of the Notes and the
First Mortgage Bonds.
SECTION 10. Representations, Warranties and
Agreements to Survive Delivery.
All representations, warranties and
agreements contained in this Agreement or in
certificates of officers of the Company submitted
pursuant hereto or thereto, shall remain operative and
in full force and effect, regardless of any
investigation made by or on behalf of the Agents or any
controlling person of any Agent, or by or on behalf of
the Company, and shall survive each delivery of and
payment for any of the Notes.
SECTION 11. Termination.
A. Termination of this Agreement. This
Agreement (excluding any Terms Agreement) may be
terminated for any reason, at any time by either the
Company or an Agent upon the giving of three business
days' written notice of such termination to the other
party hereto.
B. Termination of a Terms Agreement. The
applicable Agent may terminate any Terms Agreement to
which it is a party, immediately upon notice to the
Company, at any time prior to the Settlement Date
relating thereto (i) 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 Agents, impracticable
to purchase the Notes, or (ii) trading in any
securities of the Company has been suspended by the SEC
or a national securities exchange, or if a general
banking moratorium shall have been declared by either
Federal or New York authorities, or (iii) the rating
assigned by any nationally recognized securities rating
agency to any debt securities of the Company as of the
Purchase Date shall have been lowered since that date,
or (iv) if there shall have come to the applicable
Agent's attention any facts that would cause such Agent
to believe that the Prospectus, at the time it was
required to be delivered to a purchaser of Notes,
contained an 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 existing at the time of such delivery,
not misleading, provided, however, the Agent may only
terminate such Terms Agreement pursuant to this Section
12(b)(v) if the Agent gives written notice to the
Company of such Agent's intention to terminate such
Terms Agreement pursuant to this Section 12(b)(v)
(setting forth in reasonable detail the Agent's reason
for such termination) and the Company fails, in the
reasonable opinion of the Agent, to correct any such
untrue statement in or omission from the Prospectus
prior to such Settlement Date.
C. General. In the event of any such
termination, neither party will have any liability to
the other party hereto, except that (i) each Agent
shall be entitled to any commission earned in
accordance with the third paragraph of Section 3(a)
hereof, (ii) if at the time of termination (a) each
Agent shall own any Notes purchased pursuant to a Terms
Agreement with the intention of reselling them or (b)
an offer to purchase any of the Notes has been accepted
by the Company but the time of delivery to the
purchaser or his agent of the Note or Notes relating
thereto has not occurred, the covenants set forth in
Sections 4 and 7 hereof shall remain in effect until
such Notes are so resold or delivered, as the case may
be, and (iii) the covenant set forth in Section 4(h)
hereof, the provisions of Section 5 hereof, the
indemnity and contribution agreements set forth in
Sections 8 and 9 hereof, and the provisions of Sections
11 and 15 hereof shall remain in effect.
SECTION 12. Notices.
Unless otherwise provided herein, all notices
required under the terms and provisions hereof shall be
in writing, either delivered by hand, by mail or by
telex, telecopier or telegram, and any such notice
shall be effective when received at the address
specified below.
If to the Company:
Public Service Company of Oklahoma
212 East Sixth Street
Tulsa, Oklahoma 74119-1212
Attention: Robert L. Zemanek, President
and Chief Executive Officer
Telephone: (918) 599-2000
Telecopy: (918) 599-3220
with a copy to:
Stephen D. Wise
Director, Finance
Central and South West Corporation
1616 Woodall Rogers Freeway
Dallas, Texas 75202
Telephone: (214) 777-1000
Telecopy: (214) 777-1223
If to Smith Barney:
Smith Barney Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013
Attention: MTN Product Management, Mark Meyer
Telephone: (212) 723-5123
Telecopy: (212) 723-8853
If to Morgan Stanley:
Morgan Stanley & Co. Incorporated
1585 Broadway - 2nd Floor
New York, New York 10036
Attention: Manager - Continuously Offered Products
Telephone: (212) 761-4000
Telecopy: (212) 761-0780
with a copy to:
Morgan Stanley & Co. Incorporated
1585 Broadway - 34th Floor
New York, New York 10036
Attention: Peter Cooper - Investment Banking
Information Center
Telephone: (212) 761-8385
Telecopy: (212) 761-0260
or at such other address as such party may designate
from time to time by notice duly given in accordance
with the terms of this Section 12.
SECTION 14. Governing Law.
This Agreement and all the rights and obligations
of the parties shall be governed by and construed in
accordance with the laws of the State of New York
applicable to agreements made and to be performed in
the State of New York. Any suit, action or proceeding
brought by the Company against the Agents in connection
with or arising under this Agreement shall be brought
solely in the state or federal court of appropriate
jurisdiction located in the Borough of Manhattan, The
City of New York.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and
be binding upon the Agents and the Company and their
respective successors. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the
parties hereto and their respective successors and the
controlling persons and officers and directors referred
to in Sections 8 and 9 and their heirs and legal
representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all
conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties hereto
and their respective successors and said controlling
persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Notes
shall be deemed to be a successor by reason merely of
such purchase.
If the foregoing is in accordance with the Agents'
understanding of our agreement, please sign and return
to the Company a counterpart hereof, whereupon this
instrument along with all counterparts will become a
binding agreement between the Agents and the Company in
accordance with its terms.
Very truly yours,
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:
Name:
Title:
Accepted:
SMITH BARNEY INC.
By: ________________________________
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By: ________________________________
Name:
Title:
EXHIBIT A
The following terms, if applicable, shall be
agreed to by the applicable Agent and the Company
pursuant to each Terms Agreement:
Principal Amount: $_______
(or principal amount of foreign currency)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Initial Interest Reset Date:
Spread or Spread Multiplier, if any:
Interest Rate Reset Month(s):
Interest Payment Month(s):
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Rate Reset Period:
Interest Payment Period:
Interest Payment Date:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
Date of Maturity:
Purchase Price: ___%
Settlement Date and Time:
Stand-off Period (if any):
Additional Terms:
Also, agreement as to whether the following will be
required:
Officer's Certificate pursuant to Section 7(b)
of the Distribution Agreement.
Legal Opinion pursuant to Section 7(c)of the
Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the
Distribution Agreement.
Stand-off Agreement pursuant to Section 4(k) of the
Distribution Agreement.
SCHEDULE A
As compensation for the services of the Agents
hereunder, the Company shall pay the applicable Agent,
on a discount basis, a commission for the sale of each
Note equal to the principal amount of such Note
multiplied by the appropriate percentage set forth
below:
PERCENT OF MATURITY RANGES
PRINCIPAL AMOUNT
From 9 months but less than 1 year............. .145%
From 1 year but less than 18 months............ .170
From 18 months but less than 2 years........... .220
From 2 years but less than 3 years............. .290
From 3 years but less than 4 years............. .410
From 4 years but less than 5 years............. .530
From 5 years but less than 6 years............. .600
From 6 years but less than 7 years............. .650
From 7 years but less than 10 years............ .700
From 10 years but less than 15 years........... .725
From 15 years but less than 20 years........... .800
From 20 years to and including 30 years......... .850
More than 30 years ............................. *
* Commission on Notes with maturities of 30 years or
more shall be agreed to by the Company and the
applicable Agent at the time of such transmission.
EXHIBIT B
[FORM OF OPINION OF COMPANY COUNSEL
February 26, 1996
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036
Re: Public Service Company of Oklahoma
$75,000,000 Medium-Term Notes, Series A
Ladies and Gentlemen:
We have acted as special counsel for Public
Service Company of Oklahoma, an Oklahoma corporation
(the "Company"), in connection with the transactions
contemplated by the Distribution Agreement dated
February 26, 1996 (the "Distribution Agreement"),
between you and the Company, relating to the proposed
issuance and sale from time to time by the Company of
up to $75,000,000 aggregate principal amount of its
Medium-Term Notes, Series A (the "Notes") under its
Indenture dated as of February 1, 1996, to Liberty Bank
and Trust Company of Tulsa, National Association, as
Trustee (the "Note Trustee"), as supplemented by a
Supplemental Indenture thereto dated as of February 1,
1996 (said Indenture as so supplemented being herein
referred to as the "Indenture").
We have examined originals, or copies
certified to our satisfaction, of all such corporate
records of the Company, indentures, agreements and
other instruments, certificates of public officials,
certificates of officers and representatives of the
Company and other documents as we have deemed it
necessary to require as a basis for the opinions
hereinafter expressed. In our examination we have
assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as
originals and the conformity with the originals of all
documents submitted to us as copies and the
authenticity of the originals of such latter documents.
As to various questions of fact material to such
opinions we have, when relevant facts were not
independently established, relied upon certifications
by officers of the Company and other appropriate
persons and statements contained in the Registration
Statement hereinafter mentioned.
Based upon the foregoing, and having regard
to legal considerations which we deem relevant, we are
of the opinion that:
1. The Company is a corporation validly
existing under the laws of the State of Oklahoma.
2. The Distribution Agreement has been duly
authorized, executed and delivered by the Company.
3. Each of the Indenture and the Indenture
dated as of July 1, 1945, as supplemented by
several supplemental indentures, including a
Supplemental Indenture dated as of February 1,
1996 (said Indenture as so supplemented being
hereinafter called the "First Mortgage
Indenture"), under which Liberty Bank and Trust
Company of Tulsa, National Association, is Trustee
(the "First Mortgage Trustee"), 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, however, to the fact that
certain of the remedial provisions thereof may be
limited or rendered unenforceable by applicable
laws, including the laws of the States wherein the
mortgaged property is situated (but said laws do
not, in our opinion, make the remedies afforded by
the Indenture and the First Mortgage Indenture
inadequate for the realization of the benefits of
the security provided thereby) and except (a) as
enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other
similar laws of general applicability affecting
the enforcement of creditors' rights, and (b) that
such enforceability may be limited by the
application of general principles of equity
(regardless of whether considered in a proceeding
in equity or at law), including without limitation
(i) the possible unavailability of specific
performance, injunctive relief or any other
equitable remedies and (ii) concepts of
materiality, reasonableness, good faith and fair
dealing.
4. The issue and sale of the Notes and the
issuance and delivery by the Company of the First
Mortgage Bonds (the "First Mortgage Bonds") under
the First Mortgage Indenture to the Note Trustee
as collateral for the Notes in accordance with the
terms of the Indenture have been duly and validly
authorized by the Company by the resolutions
adopted by the Board of Directors on January 16,
1996 (the "Board Resolutions"). The Notes, when
duly executed, authenticated, completed and
delivered to and paid for by the purchasers
thereof as contemplated by and in accordance with
the Indenture, the Board Resolutions and the Order
(as defined in paragraph 6 below) and the First
Mortgage Bonds, when duly executed, authenticated,
completed and delivered to the Note Trustee as
contemplated by and in accordance with the First
Mortgage Indenture, the Board Resolutions and the
Order will be (subject to the qualifications
stated in paragraph 3 above) valid and binding
obligations of the Company, entitled to the
benefit of the Indenture in the case of the Notes,
and secured, in the case of the First Mortgage
Bonds, by the lien of and entitled to the benefits
of the First Mortgage Indenture.
5. The Notes and the Indenture and the First
Mortgage Bonds and First Mortgage Indenture,
conform as to legal matters, in all material
respects, with the statements concerning them made
in the Prospectus dated February 23, 1996 (the
"Base Prospectus") under the caption "Description
of the Senior Notes" and "Description of the
Senior Note Mortgage Bonds" and in the Prospectus
Supplement dated February 26, 1996 (the
"Prospectus Supplement", and together with the
Base Prospectus, the "Prospectus") under the
caption "Description of the Notes" and such
statements accurately set forth, in all material
respects, the matters respecting the Notes and the
Indenture and the First Mortgage Bonds and First
Mortgage Indenture, which are required to be set
forth in the Prospectus, as supplemented by the
Prospectus Supplement, by the Securities Act of
1933, as amended (the "Securities Act"), and the
Trust Indenture Act of 1939, as amended (the
"TIA"), and the rules and regulations under said
Acts (other than the accounting provisions
thereof, with respect to the requirements of which
we express no opinion or belief); and each of the
Indenture and the First Mortgage Indenture has
been qualified under the TIA.
6. The order (the "Order") of the Oklahoma
Corporation Commission (the "Oklahoma Commission")
referred to in subsection (a)(xi)(i) of Section 2
of the Distribution Agreement has been duly
entered and, to the best of our knowledge, is in
full force and effect.
7. The Company is exempt in accordance with
Rule 52 under the Public Utility Holding Company
Act of 1935, as amended, from the requirement for
an order of the Securities and Exchange Commission
(the "Commission") under said Act with respect to
the issue and sale of the Notes and the issue and
delivery of the First Mortgage Bonds.
8. Except for the order of the Commission
entered with respect to the Registration Statement
as contemplated in paragraph 9 below, no 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 and the First Mortgage
Indenture, the issue and sale of the Notes, or the
issue and delivery of the First Mortgage Bonds by
the Company as contemplated in the Distribution
Agreement.
9. The Registration Statement on Form S-3
with respect to the Notes (Registration No. 333-
00973) (the "Registration Statement") has become
effective under the Securities Act, and, to the
best of our knowledge, 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.
10. The Registration Statement, the
Prospectus and the Prospectus Supplement, in each
case including the Incorporated Documents (as
defined below) (other than financial statements,
financial data, statistical data and supporting
schedules included or incorporated by reference
therein, as to which we express no opinion or
belief) as of their respective effective, issue or
filing dates appear on their face to be
appropriately responsive in all material respects
to the requirements of the Securities Act (or,
where appropriate, the Securities Exchange Act of
1934, as amended) and the rules and regulations of
the Commission thereunder.
We have made no examination and express no
opinion as to the Company's title to any of its
property, as to the existence of any liens, charges or
encumbrances thereon (other than the lien of the First
Mortgage Indenture), or as to the filing or recording
of the Indenture or First Mortgage Indenture, and to
the extent that the opinions hereinabove expressed
involve such matters, we have examined and relied upon
the below-mentioned opinions of counsel for the
Company.
The Registration Statement was filed on Form
S-3 under the Securities Act and, accordingly, the
Prospectus does not necessarily contain a current
description of the Company's business and affairs since
Form S-3 provides for the incorporation by reference of
certain documents filed with the Commission which
contain descriptions as of various dates. We
participated in the preparation of the Registration
Statement and the Prospectus and we have reviewed
certain documents filed by the Company under the
Exchange Act, which are incorporated by reference in
the Prospectus (such documents listed in the Prospectus
as being incorporated by reference are herein called
the "Incorporated Documents"). Although we have not
independently verified the accuracy, completeness or
fairness of the statements contained therein or in the
Incorporated Documents, none of the foregoing disclosed
to us any information which gave us reason to believe
that the Registration Statement, the Prospectus or the
Incorporated Documents, considered as a whole on the
respective effective date of the Registration Statement
and on the date hereof, contained or contain any untrue
statement of a material fact or omitted or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading. We express no opinion as to any document
filed by the Company under the Exchange Act, whether
prior or subsequent to such effective date, except to
the extent that such documents are Incorporated
Documents read together with the Registration Statement
or the Prospectus and considered as a whole, nor do we
express any opinion as to the operating statistics,
financial statements or other financial data included
in or omitted from, or incorporated by reference in,
the Registration Statement, the Prospectus or the
Incorporated Documents.
In rendering the opinion set forth in
paragraph 4 above, we have necessarily assumed that, at
the time of any issuance, sale and delivery of each
Note, (a) the authorization of the Notes will not have
been modified or rescinded and there will not have
occurred any change in the law affecting the validity
or enforceability of such Note and that each Note will
conform to the draft form of the Notes examined by us
and that the issuance and delivery of such Note, and
the compliance by the Company with the terms of such
Note, will not violate any applicable law, or result in
a violation of the Company's certificate of
incorporation or by-laws, any instrument or agreement
then binding upon the Company, or any restriction
imposed by any court or governmental body having
jurisdiction over the Company and (b) the order of the
Oklahoma Commission referred to in paragraph 6 above is
in full force and effect and has not been modified or
amended by the Oklahoma Commission, and the Company is
in compliance therewith.
In rendering the opinions hereinabove
expressed, we have relied, to the extent pertinent,
with your permission upon the opinions of even date
hereof, delivered to you concurrently herewith, of
Messrs. Doerner, Saunders, Daniel & Anderson, Tulsa,
Oklahoma, and Messrs. Wagstaff, Alvis, Stubbeman,
Seamster & Longacre, L.L.P., Abilene, Texas, special
counsel in the State of Texas for the Company, as to
matters governed by Oklahoma and Texas law,
respectively, and as to such matters, the opinions
hereinabove expressed are subject to all
qualifications, limitations, assumptions and reliances,
and other considerations, therein set forth.
We do not express any opinion as to matters
governed by any laws other than the laws of the State
of New York, the Federal laws of the United States of
America and, to the extent hereinabove stated, in
reliance on said opinions of said counsel for the
Company, the laws of the States of Oklahoma and Texas.
Very truly yours,
RBW/DBB
EXHIBIT C
[FORM OF OPINION OF COUNSEL TO THE AGENTS]
February 26, 1996
Smith Barney Inc.
390 Greenwich Street, 5th Floor
New York, New York 10013
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Re: $75,000,000 Aggregate
Principal Amount
of Medium-Term Notes, Series A
Ladies and Gentlemen:
This opinion is addressed to you as the
agents (the "Agents") named in the Distribution
Agreement dated February 26, 1996 (the "Distribution
Agreement") between Public Service Company of Oklahoma,
an Oklahoma corporation (the "Company"), and each of
the Agents relating to the offer and sale from time to
time of up to $75,000,000 aggregate principal amount of
the Company's Medium-Term Notes, Series A (the
"Notes"). The Notes will be issued pursuant to the
indenture dated as of February 1, 1996, as supplemented
by the First Supplemental Indenture dated as of
February 1, 1996 thereto (collectively, the
"Indenture"), between the Company and Liberty Bank and
Trust Company of Tulsa, National Association, as
trustee (the "Trustee"). Until the Release Date (as
defined in the Indenture), the Notes will be secured as
to payment of principal and interest by one or more
series of First Mortgage Bonds (the "First Mortgage
Bonds") pledged and delivered by the Company to the
Trustee. The First Mortgage Bonds will be issued
pursuant to the provisions of the Company's Indenture
dated July 1, 1945, as amended and supplemented to the
date hereof (collectively, the "First Mortgage
Indenture") as the same may from time to time hereafter
be amended or supplemented, to Liberty Bank and Trust
Company of Tulsa, National Association, as trustee.
Capitalized terms not defined herein have the meanings
set forth in the Distribution Agreement.
As special counsel for the Agents, we have,
among other things, participated with officers and
representatives of the Company, including its counsel
and independent public accountants, and representatives
of the Agents in the preparation of the Company's
Registration Statement on Form S-3 (Registration No.
333-00973), filed on February 15, 1996 with the
Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the
"Act"), which registration statement was declared
effective by the Commission on February 23, 1996. Such
registration statement (including all materials
incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act at the date hereof (the
"Incorporated Documents")) is hereinafter referred to
as the "Registration Statement." The Company's
Prospectus dated February 23, 1996 (including the
Incorporated Documents) included in the Registration
Statement (the "Prospectus"), as supplemented by the
Prospectus Supplement dated February 26, 1996 (the
"Prospectus Supplement") relating to the Notes, is
hereinafter referred to collectively as the "Final
Prospectus."
Pursuant to the requirement of Section
5(a)(2) of the Distribution Agreement, this will advise
you that in the opinion of the undersigned:
(1) Each of the Indenture and the First
Mortgage 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 the valid and binding obligation of the
Company enforceable against the Company in accordance
with its terms, subject, as to enforcement, (x) to the
fact that certain of the remedial provisions thereof
may be limited or rendered unenforceable by laws of the
States wherein the mortgaged property is situated (but
said laws do not, in our opinion, make the remedies
afforded by the Indenture and the First Mortgage
Indenture inadequate for the realization of the
benefits of the security provided thereby) and (y) to
bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the
enforcement of creditors' rights generally; to the
effects of the provisions of the Bankruptcy Reform Act
of 1978, as amended, on the validity of the lien of the
First Mortgage Indenture with respect to the property
acquired or proceeds realized by the Company after the
commencement of bankruptcy proceedings with respect to
the Company; and to the effects of general principles
of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law);
(2) The issue and sale of the Notes and the
issue and delivery of the First Mortgage Bonds by the
Company in accordance with the terms of the
Distribution Agreement have been duly and validly
authorized by the Company. The Notes, when duly
executed, authenticated and delivered against payment
of the agreed consideration therefor and the First
Mortgage Bonds, when duly executed, authenticated and
delivered, in each case in accordance with the terms of
the Distribution Agreement, will be valid and binding
obligations of the Company, secured, in the case of the
First Mortgage Bonds, by the lien of and entitled to
the benefits of the First Mortgage Indenture, subject,
as to enforcement, (i) to the fact that certain of the
remedial provisions thereof may be limited or rendered
unenforceable by the laws of the States wherein the
mortgaged property is situated (but said laws do not,
in our opinion, make the remedies afforded by the
Indenture and the First Mortgage Indenture inadequate
for the realization of the benefits of the security
provided thereby) and (ii) to bankruptcy, insolvency,
reorganization, moratorium or other similar laws
relating to or affecting the enforcement of creditors'
rights generally; to the effects of the provisions of
the Bankruptcy Reform Act of 1978, as amended, on the
validity of the lien of the First Mortgage Indenture
with respect to the property acquired or proceeds
realized by the Company after the commencement of
bankruptcy proceedings with respect to the Company; and
to the effects of general principles of equity
(regardless of whether enforceability is considered in
a proceeding in equity or at law);
(3) The Notes and the Indenture and the
First Mortgage Bonds and the First Mortgage Indenture
conform as to legal matters, in all material respects,
with the statements concerning them made in the
Prospectus under the captions "Description of Senior
Notes" and "Description of Senior Note Mortgage Bonds"
and in the Prospectus Supplement under the caption
"Description of the Notes" and such statements
accurately set forth, in all material respects, the
matters respecting the Notes and the Indenture and the
First Mortgage Bonds and the First Mortgage Indenture
which are required to be set forth in the Final
Prospectus by the Act and the Trust Indenture Act of
1939, as amended (the "1939 Act"), and the rules and
regulations under said Acts (other than the accounting
provisions thereof, with respect to the requirements of
which we need express no opinion or belief); and each
of the Indenture and the First Mortgage Indenture has
been qualified under the 1939 Act;
(4) The Registration Statement has become
effective under the Act, and, to our knowledge, no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for such
purpose have been instituted or are pending or
threatened under the Act;
(5) The Registration Statement, the
Prospectus and the Prospectus Supplement (other than
the financial statements, financial data, statistical
data and supporting schedules included or incorporated
by reference therein, as to which we express no opinion
or belief), in each case excluding the Incorporated
Documents, as of their respective effective or issue
dates, complied as to form, in all material respects,
with the requirements of the Act and the rules and
regulations thereunder; and
(6) The Distribution Agreement has been duly
authorized, executed and delivered by the Company.
We have made no examination and express no
opinion as to the Company's title to any of its
property, as to the existence of any liens, charges or
encumbrances thereon (other than the lien of the First
Mortgage Indenture), or as to the filing or recording
of the Indenture or the First Mortgage Indenture, and
to the extent that the opinions hereinabove expressed
may involve such matters, we have examined and relied
upon the below-mentioned opinions of counsel for the
Company.
In the course of the preparation of the
Registration Statement and the Final Prospectus, we
have considered the information set forth therein in
light of the matters required to be set forth therein
and, as noted above, we have participated in
conferences with your representatives and officers and
representatives of the Company, including its counsel
and independent public accountants, during the course
of which the contents of the Registration Statement and
the Final Prospectus and related matters were
discussed. Except as otherwise expressly stated
herein, we have not independently checked the accuracy
or completeness of, or otherwise verified, and
accordingly are not passing upon, and do not assume
responsibility for, the accuracy, completeness or
fairness of the statements contained in the
Registration Statement or the Final Prospectus; and we
have relied as to materiality, to a large extent, upon
the judgment of officers and representatives of the
Company. However, as a result of such consideration
and participation, nothing has come to our attention
that causes us to believe that the Registration
Statement (other than the financial statements,
financial data, statistical data and supporting
schedules included or incorporated by reference
therein, as to which we express no opinion or belief),
at the time it 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 that the Final Prospectus (other than the financial
statements, financial data, statistical data and
supporting schedules included or incorporated by
reference therein, as to which we express no opinion or
belief), as of the date hereof, includes an untrue
statement of a material fact or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which
they were made, not misleading.
In rendering the opinion set forth in
paragraph 2 above, we have necessarily assumed that, at
the time of any issuance, sale and delivery of each
Note, (a) the authorization of the Notes will not have
been modified or rescinded and there will not have
occurred any change in the law affecting the validity
or enforceability of such Note and that each Note will
conform to the draft form of the Notes examined by us
and that the issuance and delivery of such Note, and
the compliance by the Company with the terms of such
Note, will not violate any applicable law, or result in
a violation of the Company's certificate of
incorporation or by-laws, any instrument or agreement
then binding upon the Company, or any restriction
imposed by any court or governmental body having
jurisdiction over the Company and (b) the order of the
OCC referred to in Section 2(a)(x) of the Distribution
Agreement is in full force and effect and has not been
modified or amended by the OCC, and the Company is in
compliance therewith.
For the purpose of rendering the foregoing
opinions, we have relied, as to various questions of
fact material to such opinions, upon the
representations made in the Distribution Agreement,
certificates of officers of the Company and
certificates of the Trustee. We also have examined
originals, or copies of originals certified to our
satisfaction, of such agreements, documents,
certificates and other statements of government
officials and other instruments, have examined such
questions of law and have satisfied ourselves as to
such matters of fact as we have considered relevant and
necessary as a basis for this opinion. We have assumed
the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal
capacity of all natural persons and the conformity with
the original documents of any copies thereof submitted
to us for our examination.
In rendering the foregoing opinions, we have
relied, with your permission, exclusively upon the
opinions of even date herewith, delivered to you
concurrently herewith, of Messrs. Doerner, Saunders,
Daniel & Anderson, Tulsa, Oklahoma, counsel in the
State of Oklahoma for the Company, and Messrs.
Wagstaff, Alvis, Stubbeman, Seamster & Longacre,
L.L.P., Abilene, Texas, counsel in the State of Texas
for the Company, as to all matters governed by Oklahoma
and Texas law, respectively, and as to such matters,
our foregoing opinions are subject to all
qualifications, limitations, assumptions, reliances and
other considerations therein set forth.
This opinion is limited to the federal laws
of the United States of America and the laws of the
State of New York, and to the extent hereinabove
stated, in reliance on such opinions of such counsel
for the Company, the laws of the States of Oklahoma and
Texas.
This opinion is being delivered solely for
the benefit of the persons to whom it is addressed;
accordingly, it may not be quoted, filed with any
governmental authority or other regulatory agency or
otherwise circulated or utilized for any other purpose
without prior written consent.
Very truly yours,
EXHIBIT D
February 26, 1996
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
This opinion is addressed to you as Agents under
the Distribution Agreement, dated February 26, 1996
(the "Distribution Agreement"), between Public Service
Company of Oklahoma, an Oklahoma corporation (the
"Company"), and you, pursuant to which the Company will
issue and sell through you as Agents up to $75,000,000
in Medium-Term Notes, Series A (the "Notes"). This
opinion is given pursuant to the provisions of Section
5(a)(3) of the Distribution Agreement. All terms used
herein which are not otherwise defined herein shall
have the meanings given or assigned to such terms in
the Distribution Agreement.
The Notes are being issued under and secured by
the Indenture dated February 1, 1996 and between the
Company and Liberty Bank and Trust Company of Tulsa,
National Association, as Trustee (the "Indenture").
Until the Release Date (as defined in the Indenture),
the Notes will be secured as to payment of principal
and interest by one or more series of Senior Note
Mortgage Bonds (the "Senior Note Mortgage Bonds")
issued, pledged and delivered by the Company to the
Trustee. The Senior Note Mortgage Bonds will be issued
pursuant to the provisions of the Company's Indenture
dated July 1, 1945, as supplemented by several
supplemental indentures, including a Supplement
Indenture dated as of February 1, 1996 (the "First
Mortgage Supplemental Indenture") (said Indenture as so
supplemented being hereinafter called the "First
Mortgage Indenture"), between the Company and you in
your capacity as Trustee under the First Mortgage
Indenture (the "First Mortgage Trustee").
We have examined the originals, or copies
certified to our satisfaction, of all such corporate
records of the Company, indentures, agreements and
other instruments, certificates of public officials,
certificates of officers and representatives of the
Company and other documents as we have deemed it
necessary to require as a basis for the opinions
hereinafter expressed. In our examination we have
assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as
originals and the conformity with the originals of all
documents submitted to us as copies and the
authenticity of the originals of such latter documents.
As to various questions of fact material to such
opinions we have, when relevant facts were not
independently established, relied upon certifications
by officers of the Company and other appropriate
persons.
Based upon our examination of such documents,
records and matters of law as we have considered
relevant in the premises, and upon our familiarity as
counsel for the Company in the State of Oklahoma with
its property and general affairs in said State, and
subject to the assumptions and qualifications set forth
below, it is our opinion that:
1. The Company has been duly incorporated and is
a validly existing corporation under the laws of the
State of Oklahoma and is duly authorized by its
Restated Certificate of Incorporation to conduct the
businesses in which it is engaged as described in the
Prospectus and the Prospectus Supplement. The Company
has the legal right to function and operate as a public
utility in the State of Oklahoma supplying therein
electric service.
2. The Distribution Agreement has been duly
authorized, executed and delivered by the Company.
3. Each of the Indenture and the First Mortgage
Indenture has been duly and validly authorized by all
necessary corporate action of 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, however, to the fact that certain of
the remedial provisions of the First Mortgage Indenture
may be limited or rendered unenforceable by the laws of
the States wherein the mortgaged property is situated
(but said laws do not, in our opinion, make the
remedies afforded by the First Mortgage Indenture
inadequate for the realization of the benefits of the
security provided thereby), and except (a) as may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general
applicability affecting the enforcement of creditors'
rights, and (b) that such enforceability may be limited
by the application of general principles of equity
(regardless of whether considered in a proceeding in
equity or at law), including without limitation (i) the
possible unavailability of specific performance,
injunctive relief or any other equitable remedies, and
(ii) concepts of materiality, reasonableness, good
faith and fair dealing.
4. The issue and sale of the Notes and the Senior
Note Mortgage Bonds by the Company in accordance with
the terms of the Distribution Agreement have been duly
and validly authorized by all necessary corporate
action. The Notes, when duly executed, authenticated
and delivered against payment of the consideration
therefor, and the Senior Note Mortgage Bonds when duly
executed, and authenticated and delivered to the
Trustee will be (subject to the qualifications stated
in paragraph 3 above) valid and binding obligations of
the Company and, in the case of the Senior Note
Mortgage Bonds, secured by the lien of and entitled to
the benefits of the First Mortgage Indenture.
5. The Company has good and sufficient title to
all or substantially all the permanent fixed electric
utility properties now owned by it, situated in the
State of Oklahoma, including those described or
referred to in the Prospectus and the Prospectus
Supplement, except as otherwise indicated therein,
subject only to the lien of the First Mortgage
Indenture and to permitted encumbrances and liens and
prepaid liens (as those terms are defined in the First
Mortgage Indenture) and to the junior lien on the
Company's Northeastern Station securing project bonds
issued to finance the construction of Units 3 and 4 of
said Station. The First Mortgage Indenture, subject
only to permitted encumbrances and liens and prepaid
liens, constitutes a valid, direct first mortgage lien
upon all such fixed properties of the Company (with the
exception of the properties expressly excepted or
excluded from such lien). All permanent fixed property
hereafter acquired by the Company and situated in the
State of Oklahoma (other than property of the character
of that expressly excepted or excluded from the lien of
the First Mortgage Indenture) will, upon such
acquisition, become subject to the lien of the First
Mortgage Indenture, subject, however, to such permitted
encumbrances and liens and prepaid liens, any liens
existing or placed on such property at the time of the
acquisition thereof by the Company, and any liens
thereon which might intervene prior to the filing for
record of the instrument by which title to such
property is acquired by the Company, and except as
provisions of the Bankruptcy Code may affect the
validity of the lien of the First Mortgage Indenture
with respect to property acquired, and proceeds,
products, rents, issue or profits of the property
subject to such lien realized, after commencement of a
case under such Code.
6. The First Mortgage Indenture (other than the
First Mortgage Supplemental Indenture) has been duly
filed for record as a mortgage or deed of trust of real
and personal property in the office of the Secretary of
State of the State of Oklahoma and the filing of the
First Mortgage Supplemental Indenture in the office of
the Secretary of State of the State of Oklahoma will
constitute all of the action required under the laws of
the State of Oklahoma to give notice of the lien of the
First Mortgage Indenture.
7. The Company has valid and subsisting
franchises, licenses and permits relating to its
operations in the State of Oklahoma, authorizing the
Company to carry on its present operations in said
State.
8. The execution and delivery by the Company of
any supplemental indenture relating to the Notes and
issuance and sale of the Notes by the Company, and the
execution and delivery by the Company of any
supplemental indenture relating to the Senior Note
Mortgage Bonds and issuance of the Senior Note Mortgage
Bonds by the Company, each upon terms consistent with
the Distribution Agreement, have been authorized by an
Amended Order and Certificate of Authority of the
Corporation Commission of the State of Oklahoma, dated
February 22, 1996, which Order has been duly entered
and, to the best of our knowledge, is in full force and
effect. No further approval, authorization, consent,
certificate or order of any state commission or
regulatory authority in Oklahoma (other than in
connection or in compliance with the securities or Blue
Sky laws or regulations of the jurisdictions in which
any of the Notes and Senior Note Mortgage Bonds may
have been or are to be offered for sale or sold) is
necessary with respect to the execution and delivery of
the Indenture and the First Mortgage Indenture or the
issuance and sale of the Notes and Senior Note Mortgage
Bonds by the Company as contemplated by the
Distribution Agreement.
9. Except as set forth in the Prospectus or the
Prospectus Supplement and except as set forth in the
following sentence, to the best of our knowledge there
is no material litigation or other legal proceeding
pending to which the Company is a party or of which
property of the Company is the subject, and, to the
best of our knowledge, no such litigation or
proceedings are contemplated. There are various
routine litigation, claims and other proceedings
pending against the Company or involving property of
the Company, which are common or incident to the
business in which the Company is engaged but which, in
the aggregate, are not significant (in our opinion)
from the standpoint of the total assets and overall
operations of the Company.
10. The statements, if any, made in the
Prospectus or the Prospectus Supplement which are
stated therein to have been made on our authority, have
been reviewed by us and, as to matters of law and legal
conclusions, are correct.
This opinion is limited exclusively to the laws of
the State of Oklahoma which are presently in effect.
We note that the Indenture and the Notes are to be
governed by and construed in accordance with the laws
of the State of New York. In rendering our opinions
herein with respect to the enforceability of the
Indenture and the Notes, we have assumed that the laws
of the State of New York are the same as the laws of
Oklahoma.
The phrase "to the best of our knowledge," as used
herein, refers to matters within our actual knowledge.
Except as otherwise stated herein, we have made no
independent investigation of documents and records
pertaining to the Company not in our possession, nor
have we made an independent search of the records of
any judicial authority or governmental agency.
We undertake no obligation to update or supplement
our opinions herein as a result of events or actions
occurring after the date hereof.
In rendering our opinions herein, we have with
your permission relied upon the opinion of even date
hereof, delivered to you concurrently herewith, of
Messrs. Wagstaff, Alvis, Stubbeman, Seamster &
Longacre, L.L.P. of Abilene, Texas.
We hereby consent to the reliance as to matters
governed by Oklahoma law by Messrs. Milbank, Tweed,
Hadley & McCloy and Messrs. Sidley & Austin, in giving
their respective opinions of even date herewith on our
opinions set forth herein. The opinions herein are
rendered solely for the benefit of the Agents in
connection with the requirement set forth in the
Distribution Agreement. Without our prior written
consent this opinion may not be quoted in whole or in
part or furnished to or relied upon by any other person
or entity.
Very truly yours,
DOERNER, SAUNDERS, DANIEL & ANDERSON
EXHIBIT E
February 26, 1996
Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
This opinion is addressed to you as the Agents
(the "Agents") under Section 5(a)(4) of the
Distribution Agreement (the "Distribution Agreement"),
dated February 26, 1996, between Public Service Company
of Oklahoma (the "Company") and you, pursuant to which
the Company will issue and sell and the Agents will
purchase from time to time up to $75,000,000 aggregate
principal amount of Medium Term Notes (the "Notes").
The Notes will be secured by First Mortgage Bonds (the
"First Mortgage Bonds") issued by the Company.
The First Mortgage Bonds are being issued under
and secured by that one certain indenture dated July 1,
1945, as amended and supplemented, by and between the
Company and Liberty Bank and Trust Company of Tulsa,
National Association, as Trustee (the "First Mortgage
Indenture"). Terms used with initial capital letters
herein and not otherwise defined herein shall have the
meanings assigned thereto in the Distribution
Agreement.
Based upon our examination of such documents,
records, and matters of law as we have considered
relevant in the premises, as special counsel for the
Company in the State of Texas, it is our opinion that:
(i) The Company is duly qualified to transact
business as a foreign corporation in the State of
Texas.
(ii) The Company has good and sufficient title to
all or substantially all the permanent fixed electric
utility properties now owned by it situated in the
State of Texas, including those described or referred
to in the Prospectus, except as otherwise indicated
therein, subject only to the lien of the First Mortgage
Indenture and to permitted encumbrances and liens and
prepaid liens, as defined in the First Mortgage
Indenture. The First Mortgage Indenture constitutes a
valid, direct first mortgage lien, subject only to
permitted encumbrances and liens and prepaid liens,
upon all such fixed properties of the Company (with the
exception of the properties expressly excepted or
excluded from such lien of the First Mortgage
Indenture). All permanent fixed property hereafter
acquired by the Company and situated in the State of
Texas (other than property of the character of that
expressly excepted or excluded from the lien of the
First Mortgage Indenture) will, upon such acquisition,
become subject to the lien of the First Mortgage
Indenture, subject, however, to such permitted
encumbrances and liens and prepaid liens, any liens
existing or placed on such property at the time of the
acquisition thereof by the Company, and any liens
thereon which might intervene prior to the filing for
record of the instrument by which title to such
property is acquired by the Company and except as
provisions of the Bankruptcy Code may affect the
validity of the lien of the First Mortgage Indenture
with respect to property acquired, and proceeds,
products, rents, issue or profits of the property
subject to such lien realized, after commencement of a
case under such Code.
(iii) The laws of the State of Texas affecting
the remedies for the enforcement of the security
provided for in the First Mortgage Indenture do not, in
our opinion, make such remedies inadequate for the
realization of the benefits of such security.
(iv) With the exception of that one certain
supplemental indenture dated as of February 1, 1996,
providing for "First Mortgage Bonds, Series X," which
we understand will be forthwith duly recorded as a
utility security instrument in the office of the
Secretary of State of the State of Texas, the First
Mortgage Indenture has been duly so recorded as a
utility security instrument and notices of utility
security instruments affecting real property have
heretofore been duly filed in each of the counties in
the State of Texas in which property owned by the
Company and subject to the lien of the First Mortgage
Indenture is situated, in such manner as to make
effective the lien intended to be created by the First
Mortgage Indenture. Such recordation and filings
constitute all of the action required under the laws of
the State of Texas to give notice of the lien of the
First Mortgage Indenture. No recording or other taxes
of the State of Texas are required by law in connection
with the issuance of the Notes and First Mortgage Bonds
or for the effectiveness of the lien of the First
Mortgage Indenture as security for the First Mortgage
Bonds.
(v) As presently conducted, the Company's
operations in the State of Texas require no franchises,
licenses or permits, other than Certificates of
Convenience and Necessity pertaining to its Texas
properties which have been issued by the Public Utility
Commission of Texas.
(vi) No approval, authorization, consent,
certificate or order of any commission or regulatory
authority of the State of Texas (other than in
connection or in compliance with the securities or
"blue sky" laws or regulations of the State of Texas)
is necessary with respect to the execution and delivery
of the First Mortgage Indenture or the issuance and
sale of the Notes and the First Mortgage Bonds by the
Company as contemplated by the Distribution Agreement.
All statements in this opinion assume and are
subject to the prompt and timely recording of the
supplemental indenture providing for First Mortgage
Bonds, Series X, as set out in section (iv) hereof. We
do not herein express any opinion as to any matters
governed by any laws other than the laws of the State
of Texas. We hereby consent to the reliance as to
matters governed by Texas law by Messrs. Milbank,
Tweed, Hadley & McCloy, Messrs. Doerner, Saunders,
Daniel & Anderson and Messrs. Sidley & Austin, in
giving their opinions of even date herewith, on our
opinions set forth herein.
Very truly yours,
WAGSTAFF, ALVIS, STUBBEMAN,
SEAMSTER & LONGACRE, L.L.P.
BY:
ANNEX 1
ADMINISTRATIVE PROCEDURES FOR
PUBLIC SERVICE COMPANY OF OKLAHOMA
MEDIUM TERM NOTES, SERIES A
DUE NOT LESS THAN NINE MONTHS FROM DATE OF ISSUE
(Dated as of February 26, 1996)
Medium Term Notes, Series A (the "Notes") in
the aggregate principal amount of up to $75,000,000 are
to be offered on a continuing basis by Public Service
Company of Oklahoma, an Oklahoma corporation (the
"Company"), through Smith Barney Inc. and Morgan
Stanley & Co. Incorporated who, as agents (each an
"Agent," and, collectively, the "Agents"), have agreed
to use their reasonable best efforts to solicit offers
to purchase the Notes from the Company. The Agents may
also purchase Notes as principal for resale.
The Notes are being sold pursuant to a
Distribution Agreement between the Company and the
Agents, dated February 26, 1996 (the "Distribution
Agreement"). The Notes are to be issued as a new
series of senior notes under the Company's Indenture to
Liberty Bank and Trust Company of Tulsa, National
Association, as trustee (the "Trustee"), dated as of
February 1, 1996, as supplemented and as the same may
from time to time be amended or supplemented (the
"Indenture"). Until the Release Date (as defined in
the Indenture), the Notes will be secured as to payment
of principal and interest by one or more series of
First Mortgage Bonds issued, pledged and delivered by
the Company to the Trustee. A Registration Statement
(the "Registration Statement," which term shall include
any additional registration statements filed in
connection with the Notes as provided in the
introductory paragraphs of the Distribution Agreement)
with respect to the Notes has been filed with the
Securities and Exchange Commission (the "Commission").
The most recent Prospectus filed pursuant to Rule
424(b) is herein referred to as the "Prospectus." A
pricing supplement with respect to the specific terms
of any Notes is herein referred to as a "Pricing
Supplement." Chemical Bank will act as the paying
agent (the "Paying Agent") for the payment of principal
of and premium, if any, and interest on the Notes and
will perform as the Paying Agent, unless otherwise
specified, the other duties specified herein. In
addition, Chemical Bank will act as the authenticating
agent (the "Authenticating Agent") under the Indenture.
The Notes will either be issued (a) in
book-entry form and represented by one or more fully
registered Notes (each, a "Book-Entry Note") delivered
to Chemical Bank, as agent for The Depository Trust
Company ("DTC"), and recorded in the book-entry system
maintained by DTC, or (b) in certificated form
delivered to the purchaser thereof or a person
designated by such purchaser. Except in the limited
circumstances described in the Prospectus or a Pricing
Supplement, owners of beneficial interests in Notes
issued in book-entry form will not be entitled to
physical delivery of Notes in certificated form equal
in principal amount to their respective beneficial
interests.
General procedures relating to the issuance
of all Notes are set forth in Part I hereof.
Additionally, Notes issued in book-entry form will be
issued in accordance with the procedures set forth in
Part II hereof and Notes issued in certificated form
will be issued in accordance with the procedures set
forth in Part III hereof. Capitalized terms used
herein that are not otherwise defined shall have the
meanings ascribed thereto in the Indenture or the
Notes, as the case may be. As used herein, the term
"Prospectus" refers to the most recent prospectus which
has been prepared by the Company for use by the Agents
in connection with the offering of the Notes.
To the extent the procedures set forth below
conflict with the provisions of the Notes, the
Indenture or the Distribution Agreement, the relevant
provisions of the Notes, the Indenture and the
Distribution Agreement shall control.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Date of Issuance/ Each Note will be dated by the
Authentication: Authenticating Agent as of the
interest payment date thereof to
which interest was paid next
preceding the date of issue, unless
(a) issued on an interest payment
date thereof to which interest was
paid, in which event it shall be
dated as of the date of issue, or (b)
issued prior to the occurrence of the
first interest payment date thereof
to which interest was paid, in which
event it shall be dated the original
issue date. The original issue date
shall remain the same for all Notes
subsequently issued upon transfer,
exchange or substitution of an
original Note regardless of their
dates of authentication.
Maturities: Each Note will mature on a date
selected by the purchaser and agreed
to by the Company which is not less
than nine months from its original
issue date.
Registration: Notes will be issued only in fully
registered form.
Calculation of Interest: Interest (including payments for
partial periods) will be calculated
and paid on the basis of a 360-day
year of twelve 30-day months.
Acceptance and Rejection The Company shall have the sole right
of Offers: to accept offers to purchase Notes
from the Company and may reject any
such offer in whole or in part. Each
Agent shall communicate to the
Company, orally or in writing, each
reasonable offer to purchase Notes
from the Company received by it.
Each Agent shall have the right, in
its discretion reasonably exercised,
without notice to the Company, to
reject any offer to purchase Notes
through it in whole or in part.
Preparation of Pricing If any offer to purchase a Note is
Supplement: accepted by the Company, the Company,
with the approval of the Agent which
presented such offer (the "Presenting
Agent"), will prepare a Pricing
Supplement reflecting the terms of
such Note and file such Pricing
Supplement relating to such Notes and
the plan of distribution thereof (as
such Pricing Supplement supplements
the Prospectus, the "Supplemented
Prospectus"), with the Commission in
accordance with Rule 424 under the
Act. The Presenting Agent will cause
a Supplemented Prospectus to be
delivered to the purchaser of the
Note.
The Company shall have delivered a
completed Pricing Supplement, via
next day mail or telecopy to arrive
no later than 11 AM on the Business
Day following the trade date, to the
Presenting Agent at the following
locations: Smith Barney Inc. at the
following address:
Smith Barney Inc., 390 Greenwich
Street - 4th Floor, New York, New
York 10013, Attention: MTN Product
Management/Origination - Mark R.
Meyer, Telephone: (212) 723-5123,
Telecopy: (212) 723-8854.
Also, a copy to: Smith Barney Inc.,
388 Greenwich Street - 34th Floor,
New York, New York 10013, Attention:
Legal Compliance - Adrienne Garofalo,
Telephone (212) 816-7594, Telecopy
(212) 816-7912;
to Morgan Stanley & Co. Incorporated
at the following address:
Morgan Stanley & Co. Incorporated,
1585 Broadway - 2nd Floor, New York,
New York 10036, Attention: Medium-
Term Note Trading Desk, Carlos
Cabrera Telephone (212) 761-4000
In each instance that a Pricing
Supplement is prepared, the Agents
will affix such Pricing Supplement to
the Prospectus prior to its use.
Outdated Pricing Supplements, and the
Prospectuses to which they are
attached (other than those retained
for files), will be destroyed.
Settlement: The receipt of immediately available
Federal funds by the Company in
payment for a Note and the
authentication and delivery of such
Note shall, with respect to such
Note, constitute "settlement."
Offers accepted by the Company will
be settled on the date that is three
Business Days after the date of the
acceptance of the offer, or at such
later time as the purchaser, the
Trustee and the Company shall agree,
pursuant to the timetable for
settlement set forth in Parts II and
III hereof under the caption
"Settlement Procedures" with respect
to Book-Entry Notes and Certificated
Notes, respectively. If procedures A
and B of the applicable Settlement
Procedures with respect to a
particular offer are not completed on
or before the time set forth under
the applicable "Settlement Procedures
Timetable," such offer shall not be
settled until the Business Day
following the completion of
settlement procedures A and B or such
later date as the purchaser and the
Company shall agree.
In the event of a purchase of Notes
by any Agent as principal,
appropriate settlement details will
be as agreed between the Agent and
the Company pursuant to the
applicable Terms Agreement.
Suspension of The Company may instruct the Agents
Solicitation; Amendment to suspend solicitation of purchases
or Supplement: at any time. Upon receipt of such
instructions the Agents will
forthwith suspend solicitation of
offers to purchase from the Company
until such time as the Company has
advised them that solicitation of
offers to purchase may be resumed.
If the Company decides to amend the
Registration Statement or Prospectus
(including incorporating any
documents by reference therein) or
supplement any of such documents, it
will promptly furnish the Agents and
their counsel with copies of the
amendment (including any document
proposed to be incorporated by
reference therein) or supplement.
One copy of such filed document,
along with a copy of the cover letter
sent to the Commission, will be
delivered or mailed to the Agents at
the following respective addresses:
Smith Barney Inc., 390 Greenwich
Street - 4th Floor, New York, New
York 10013, Attention: MTN Product
Management/ Origination - Mark R.
Meyer;
Morgan Stanley & Co. Incorporated
1585 Broadway; 2nd Floor
New York, New York, 10036
Attention: Manager - Continuously
Offered Products
In the event that at the time the
solicitation of offers to purchase
from the Company is suspended there
shall be any orders outstanding which
have not been settled, the Company
will promptly advise the Agents and
the Trustee whether such orders may
be settled and whether copies of the
Prospectus as theretofore amended
and/or supplemented as in effect at
the time of the suspension may be
delivered in connection with the
settlement of such orders. The
Company will have the sole
responsibility for such decision and
for any arrangements which may be
made in the event that the Company
determines that such orders may not
be settled or that copies of such
Prospectus may not be so delivered.
Delivery of Supplemented A copy of the most recent
Prospectus: Supplemented Prospectus must
accompany or precede the earlier of
(a) the written confirmation of a
sale sent to a customer or the agent
of such customer, and (b) the
delivery of Notes to a customer or
the agent of such customer.
Authenticity of The Agents will have no obligations
Signatures: or liability to the Company or the
Authenticating Agent in respect of
the authenticity of the signature of
any officer, employee or agent of the
Company or the Authenticating Agent
on any Note.
Documents Incorporated The Company shall supply the Agents
by Reference: with an adequate supply of all
documents incorporated by reference
in the Registration Statement.
Business Day: "Business Day" means any day, other
than a Saturday or Sunday, on which
banks in the City of New York, are
not required or authorized by law to
close.
PART II: PROCEDURES FOR NOTES ISSUED IN BOOK-ENTRY
FORM
In connection with the qualification of Notes
issued in book-entry form for eligibility in the
book-entry system maintained by DTC, the Paying Agent
will perform the custodial, document control and
administrative functions described below, in accordance
with its respective obligations under a Letter of
Representation from the Company and the Paying Agent to
DTC and a Medium-Term Note Certificate Agreement
between the Paying Agent and DTC (the "Certificate
Agreement"), and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement System
("SDFS").
Issuance: All Notes issued in book-entry form
having the same original issue date,
interest rate, and stated maturity
will be represented initially by a
single global security in fully
registered form without coupons
(each, a "Book-Entry Note").
Each Book-Entry Note will be dated
and issued as of the date of its
authentication by the Authenticating
Agent. Each Book-Entry Note will
bear an interest accrual date, which
will be (a) with respect to an
original Book-Entry Note (or any
portion thereof), its original issue
date and (b) with respect to any Book-
Entry Note (or portion thereof)
issued subsequently upon exchange of
a Book-Entry Note or in lieu of a
destroyed, lost or stolen Book-Entry
Note, the most recent interest
payment date to which interest has
been paid or duly provided for on the
predecessor Book-Entry Note or Notes
(or if no such payment or provision
has been made, the original issue
date of the predecessor Book-Entry
Note or Notes), regardless of the
date of authentication of such
subsequently issued Book-Entry Note.
No Book-Entry Note shall represent
any Note issued in certificated form.
Identification: Prior to the commencement of the
program, the Company has arranged
with the CUSIP Service Bureau of
Standard & Poor's Corporation (the
"CUSIP Service Bureau") for the
reservation of a series consisting of
approximately 900 CUSIP numbers which
have been reserved for and relating
to Book-Entry Notes and the Company
has directed the Paying Agent to give
DTC a written list of such CUSIP
numbers. The Paying Agent will
assign CUSIP numbers to Book-Entry
Notes as described below under
Settlement Procedure B. DTC will
notify the CUSIP Service Bureau
periodically of the CUSIP numbers
that the Paying Agent has assigned to
Book-Entry Notes.
The Paying Agent will notify the
Company at any time when fewer than
50 of the reserved CUSIP numbers
remain unassigned to Book-Entry
Notes, and, if it deems necessary,
the Company will reserve additional
CUSIP numbers for assignment to Book-
Entry Notes. Upon obtaining such
additional CUSIP numbers, the Company
will deliver a list of such
additional numbers to the Paying
Agent and DTC.
Registration: Each Book-Entry Note will be
registered in the name of Cede & Co.,
as nominee for DTC, on the register
maintained by the Trustee under the
Indenture. The beneficial owner of a
Note issued in book-entry form (i.e.,
an owner of a beneficial interest in
a Book-Entry Note) (or one or more
indirect participants in DTC
designated by such owner) will
designate one or more participants in
DTC (with respect to such Note issued
in book-entry form, the
"Participants") to act as agent for
such beneficial owner in connection
with the book-entry system maintained
by DTC, and DTC will record in
book-entry form, in accordance with
instructions provided by such
Participants, a credit balance with
respect to such Note issued in
book-entry form in the account of
such Participants. The ownership
interest of such beneficial owner in
such Note issued in book-entry form
will be recorded through the records
of such Participants or through the
separate records of such Participants
and one or more indirect participants
in DTC.
Transfers: Transfers of a Book-Entry Note will
be accomplished by book entries made
by DTC and, in turn, by Participants
(and in certain cases, one or more
indirect participants in DTC) acting
on behalf of beneficial transferors
and transferees of such Book-Entry
Note.
Exchanges: The Paying Agent may deliver to DTC
and the CUSIP Service Bureau at any
time a written notice specifying (a)
the CUSIP numbers of two or more Book-
Entry Notes outstanding on such date
that represent Book-Entry Notes
having the same terms (other than
original issue dates) and for which
interest has been paid to the same
date; (b) a date, occurring at least
30 days after such written notice is
delivered and at least 30 days before
the next interest payment date for
the related Notes issued in
book-entry form, on which such
Book-Entry Notes shall be exchanged
for a single replacement Book-Entry
Note; and (c) a new CUSIP number,
obtained from the Paying Agent, to be
assigned to such replacement
Book-Entry Note. Upon receipt of
such a notice, DTC will send to its
participants (including the Paying
Agent) a written reorganization
notice to the effect that such
exchange will occur on such date.
Prior to the specified exchange date,
the Paying Agent will deliver to the
CUSIP Service Bureau written notice
setting forth such exchange date and
the new CUSIP number and stating
that, as of such exchange date, the
CUSIP numbers of the Book-Entry Notes
to be exchanged will no longer be
valid. On the specified exchange
date, the Paying Agent will exchange
such Book-Entry Notes for a single
Book-Entry Note bearing the new CUSIP
numbers and the CUSIP number of the
exchanged Book-Entry Notes will, in
accordance with CUSIP Service Bureau
procedures, be canceled and not
immediately reassigned.
Denominations: Notes issued in book-entry form will
be issued in denominations of $1,000
and any larger denomination which is
an integral multiple of $1,000.
Interest: General. Interest on each Note
issued in book-entry form will accrue
from the most recent interest payment
date to which interest has been paid
or duly provided for, or if no such
payment or provision has been made,
the original issue date of the
Book-Entry Note representing such
Note. Each payment of interest on a
Note issued in book-entry form will
include interest accrued through the
day preceding, as the case may be,
the interest payment date or
maturity. Interest payable at
maturity of a Note issued in
book-entry form will be payable to
the Person to whom the principal of
such Note is payable. DTC will
arrange for each pending deposit
message described under Settlement
Procedure C below to be transmitted
to Standard & Poor's, which will use
the information in the message to
include certain terms of the related
Book-Entry Note in the appropriate
daily bond report published by
Standard & Poor's.
Interest Payment Dates. Interest
payments will be made on each
interest payment date commencing with
the first interest payment date
following the original issue date,
provided, however, that the first
payment of interest on any Book-Entry
Senior Note originally issued between
a regular record date and an interest
payment date will occur on the
interest payment date following the
next regular record date.
Interest payments on Notes issued in
book-entry form will be made
semiannually on the dates specified
in the Pricing Supplement and at
maturity unless such day is not a
Business Day, in which case such
payment will be made on the next
Business Day.
Payments of Principal Payment of Interest Only. Promptly
and Interest: after each regular record date, the
Paying Agent will deliver to the
Company and DTC a written notice
specifying by CUSIP number the amount
of interest to be paid on each Book-
Entry Note on the following interest
payment date (other than an interest
payment date coinciding with
maturity) and the total of such
amounts. DTC will confirm the amount
payable on each Book-Entry Note on
such interest payment date by
reference to the daily bond reports
published by Standard & Poor's
Corporation. On such interest
payment date, the Company will pay to
the Paying Agent and the Paying Agent
in turn will pay to DTC, such total
amount of interest due (other than at
maturity), at the times and in the
manner set forth below under "Manner
of Payment."
Payments at Maturity. On or about
the first Business Day of each month
in which principal and/or interest is
to be paid, the Paying Agent will
deliver to the Company and DTC a
written list of principal, interest
and premium, if any, to be paid on
each Book-Entry Note maturing either
at stated maturity or on a redemption
date in the following month. The
Paying Agent, the Company and DTC
will confirm the amounts of such
principal and interest payments with
respect to a Book-Entry Note on or
about the fifth Business Day
preceding the maturity of such
Book-Entry Note. At such maturity,
the Company will pay to the Paying
Agent, and the Paying Agent in turn
will pay to DTC, the principal amount
of such Note, together with interest
and premium, if any, due at such
maturity, at the times and in the
manner set forth below under "Manner
of Payment." If any maturity of a
Book-Entry Note is not a Business
Day, the payment due on such day
shall be made on the next succeeding
Business Day and no interest shall
accrue on such payment for the period
from and after such maturity.
Promptly after payment to DTC of the
principal, interest and premium, if
any, due at the maturity of such Book-
Entry Note, the Paying Agent will
cancel such Book-Entry Note and
deliver it to the Company with an
appropriate debit advice. On the
first Business Day of each month, the
Paying Agent will deliver to the
Company a written statement
indicating the total principal amount
of outstanding Book-Entry Notes as of
the immediately preceding Business
Day.
Manner of Payment. The total amount
of any principal, premium, if any,
and interest due on Book-Entry Notes
on any interest payment date or at
maturity shall be paid by the Company
to the Paying Agent to an account
designated by the Paying Agent in
funds available for use by the
Payment Agent as of 9:30 a.m., New
York City time, on such date. The
Company will confirm such
instructions in writing to the Paying
Agent. Prior to 10:00 a.m., New York
City time, on such date or as soon as
possible thereafter, the Paying Agent
will pay (but only from funds
withdrawn from such account) by
separate wire transfer (using Fedwire
message entry instructions in a form
previously specified by DTC) to an
account at the Federal Reserve Bank
of New York previously specified by
DTC, in funds available for immediate
use by DTC, each payment of interest,
principal and premium, if any, due on
a Book-Entry Note on such date.
Thereafter on such date, DTC will
pay, in accordance with its SDFS
operating procedures then in effect,
such amounts in funds available for
immediate use to the respective
Participants in whose names such
Notes are recorded in the book-entry
system maintained by DTC. Neither
the Company nor the Paying Agent
shall have any responsibility or
liability for the payment by DTC of
the principal of, or interest on, the
Book-Entry Note to such Participants.
Withholding Taxes. The amount of any
taxes required under applicable law
to be withheld from any interest
payment on a Note will be determined
and withheld by the Participant,
indirect participant in DTC or other
Person responsible for forwarding
payments and materials directly to
the beneficial owner of such Note.
Settlement Procedures: Settlement Procedures with regard to
each Note in book-entry form sold by
each Agent as agent of the Company,
will be as follows:
A.The Presenting Agent will advise
the Company by telephone (confirmed
by facsimile) of the following
settlement information:
1.Taxpayer identification number of
the purchaser.
2.Principal amount of the Note.
3.Terms:
a)interest rate
b)interest payment dates
4.Price to public of the Note.
5.Trade date.
6.Settlement date (original issue date).
7.Maturity.
8.Net proceeds to the Company.
9.Agent's commission
B.The Company will advise the Paying
Agent by electronic transmission of
the above settlement information
received from the Presenting Agent
with respect to the Book-Entry Note
representing such Note and the name
of the Agent, and the Paying Agent
will assign a CUSIP number to such
Note.
C.The Paying Agent will communicate
to DTC through DTC's Participant
Terminal System, a pending deposit
message specifying the following
settlement information, which will
route such relevant information to
the Presenting Agent, Standard &
Poor's Corporation and Interactive
Data Corporation:
1.The information set forth in
Settlement Procedure A.
2.Identification numbers of the
participant accounts maintained by
DTC on behalf of the Paying Agent and
the Agent.
3.Initial interest payment date for
such Note, number of days by which
such date succeeds the related record
date for DTC purposes and, if then
calculable, the amount of interest
payable on such interest payment date
(which amount shall have been
confirmed by the Paying Agent).
4.CUSIP number of the Book-Entry Note
representing such Note.
5.Whether such Book-Entry Note
represents any other Notes issued or
to be issued in book-entry form.
D.The Board of Directors of the
Company or its Executive Committee or
a designee thereof shall approve the
final terms of the Notes.
E.The Paying Agent will complete a
Book-Entry Note representing such
Note in a form that has been approved
by the Company, the Agents and the
Paying Agent.
F.The Paying Agent will authenticate
the Book-Entry Note representing such
Note.
G.DTC will credit such Note to the
participant account of the Paying
Agent maintained by DTC.
H.The Paying Agent will enter an SDFS
deliver order through DTC's
Participating Terminal System
instructing DTC (i) to debit such
Note to the Paying Agent's
participant account and credit such
Note to the participant account of
the Presenting Agent maintained by
DTC and (ii) to debit the settlement
account of the Presenting Agent and
credit the settlement account of the
Paying Agent maintained by DTC, in an
amount equal to the price of such
Note less such Agent's commission.
Any entry of such a deliver order
shall be deemed to constitute a
representation and warranty by the
Paying Agent to DTC that (i) the Book-
Entry Note representing such Note has
been issued and authenticated and
(ii) the Paying Agent is holding such
Book-Entry Note pursuant to the
Medium-Term Note Certificate
Agreement between the Paying Agent
and DTC.
I.The Presenting Agent will enter an
SDFS deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit such
Note to the Presenting Agent's
participant account and credit such
Note to the participant account of
the Participants maintained by DTC
and (ii) to debit the settlement
accounts of such Participants and
credit the settlement account of the
Presenting Agent maintained by DTC,
in an amount equal to the initial
public offering price of such Note.
J.Transfers of funds in accordance
with SDFS deliver orders described in
Settlement Procedures H and I will be
settled in accordance with SDFS
operating procedures in effect on the
Settlement Date.
K.Upon receipt of such funds, the
Paying Agent will credit to an
account of the Company identified to
the Paying Agent funds available for
immediate use in the amount
transferred to the Paying Agent in
accordance with Settlement Procedure
H.
L.The Paying Agent will send a copy
of each Book-Entry Note to the
Company together with a statement
setting forth the principal amount of
Notes outstanding in accordance with
the Mortgage.
M.The Agent will confirm the purchase
of such Note to the purchaser either
by transmitting to the Participant
with respect to such Note a
confirmation order through DTC's
Participant Terminal System or by
mailing a written confirmation to
such purchaser.
Settlement Procedures For order of Notes accepted by the
Timetable: Company, Settlement Procedures "A"
through "M" set forth above shall be
completed as soon as possible but not
later than the respective times (New
York City time) set forth below:
Settlement Procedure Time
A-B 11:00 a.m. on the trade date
C 2:00 p.m. on the trade date
D No later than the Business Day
before day of settlement
E 3:00 p.m. on the Business Day
before day of settlement
F No later than 2:00 p.m. on the
day prior to day of settlement
G 10:00 a.m. on day of settlement
H-I No later than 2:00 p.m. on the
day prior to day of settlement
J 4:45 p.m. on day of settlement
K-M 5:00 p.m. on day of settlement
Settlement Procedures A, B and C may,
if necessary, be completed at any
time prior to the specified times on
the first Business Day after the sale
date. Settlement Procedure J is
subject to extension in accordance
with any extension of Fedwire closing
deadlines and in the other events
specified in the SDFS operating
procedures in effect on the day of
settlement.
If settlement of a Note issued in
book entry form is rescheduled or
canceled, the Paying Agent will
deliver to DTC, through DTC's
Participant Terminal System, a
cancellation message to such effect
by no later than 2:00 p.m., New York
City time, on the Business Day
immediately preceding the scheduled
day of settlement.
Failure to Settle: If the Paying Agent fails to enter an
SDFS deliver order with respect to a
Book-Entry Note issued in book-entry
form pursuant to Settlement Procedure
H; the Paying Agent shall deliver to
DTC, through DTC's Participant
Terminal System, as soon as
practicable a withdrawal message
instructing DTC to debit such Note to
the participant account of the Paying
Agent maintained at DTC. DTC will
process the withdrawal message,
provided that such participant
account contains a principal amount
of the Book-Entry Note representing
such Note that is at least equal to
the principal amount to be debited.
If withdrawal messages are processed
with respect to all the Notes
represented by a Book-Entry Note, the
Paying Agent will mark such Book-
Entry Note "canceled", make
appropriate entries in its records
and send such canceled Book-Entry
Note to the Company. The CUSIP
number assigned to such Book-Entry
Note shall, in accordance with CUSIP
Service Bureau procedures, be
canceled and not immediately
reassigned. If withdrawal messages
are processed with respect to a
portion of the Notes represented by a
Book-Entry Note, the Paying Agent
will exchange such Book-Entry Note
for two Book-Entry Notes, one of
which shall represent the Book-Entry
Notes for which withdrawal messages
are processed and shall be canceled
immediately after issuance, and the
other of which shall represent the
other Notes previously represented by
the surrendered Book-Entry Note and
shall bear the CUSIP number of the
surrendered Book-Entry Note.
If the purchase price for any
Book-Entry Note is not timely paid to
the Participants with respect to such
Note by the beneficial purchaser
thereof (or a person, including an
indirect participant in DTC, acting
on behalf of such purchaser), such
Participants and, in turn, the
related Agent may enter SDFS deliver
orders through DTC's Participant
Terminal System reversing the orders
entered pursuant to Settlement
Procedures H and I, respectively.
Thereafter, the Paying Agent will
deliver the withdrawal message and
take the related actions described in
the preceding paragraph. If such
failure shall have occurred for any
reason other than default by the
applicable Agent to perform its
obligations hereunder or under the
Distribution Agreement, the Company
will reimburse such Agent on an
equitable basis for its loss of the
use of funds during the period when
the funds were credited to the
account of the Company.
Notwithstanding the foregoing, upon
any failure to settle with respect to
a Book-Entry Note, DTC may take any
actions in accordance with its SDFS
operating procedures then in effect.
In the event of a failure to settle
with respect to a Note that was to
have been represented by a Book-Entry
Note also representing other Notes,
the Paying Agent will provide, in
accordance with Settlement Procedures
E and F, for the authentication and
issuance of a Book-Entry Note
representing such remaining Notes and
will make appropriate entries in its
records.
PART III: PROCEDURES FOR NOTES ISSUED IN CERTIFICATED FORM
The Paying Agent will issue as registrar in
connection with the Certificated Notes.
Denominations: The Notes will be issued in
denominations of $1,000 and integral
multiples of $1,000 in excess
thereof.
Interest: Each Note will bear interest in
accordance with its terms. Interest
will begin to accrue on the original
issue date of a Note for the first
interest period and on the most
recent interest payment date to which
interest has been paid for all
subsequent interest periods. Each
payment of interest shall include
interest accrued to, but excluding,
the date of such payment.
Interest payments will be made
semiannually on the dates specified
in the Pricing Supplement and at
maturity. However, the first payment
of interest on any Note issued
between a record date and an interest
payment date will be made on the
interest payment date following the
next succeeding record date.
Interest at maturity will be payable
to the person to whom the principal
is payable.
Nothing herein should be deemed to
require the Paying Agent to risk or
expend its own funds in connection
with any payment to the Company, or
the Agents, or DTC, or any
Noteholder, it being understood by
all parties that payments made by the
Paying Agent shall be made solely to
the extent that funds are provided to
the Paying Agent for such purpose.
Payments of Principal Principal of and interest on the
and Interest: Notes will be payable in New York,
New York or, at the option of the
Registered Owner (as defined herein),
at such other office or agency of the
Paying Agent, at the office or agency
of the Company in New York, New York
or otherwise pursuant to the
Indenture and interest is payable, at
the option of the Company, by check
mailed to the registered owners of
the Notes. Any payment of principal
or interest required to be made on an
interest payment date or at maturity
of a Note which is not a Business Day
need not be made on such day, but may
be made on the next succeeding
Business Day with the same force and
effect as if made on the interest
payment date or at maturity, as the
case may be, and no interest shall
accrue for the period from and after
such interest payment date or
maturity.
The Paying Agent will provide to the
Company in each month prior to a
month in which any Note or Notes
mature, a list of the principal and
interest to be paid on Notes maturing
in the next succeeding month. The
Paying Agent will be responsible for
withholding taxes on interest paid as
required by applicable law, but shall
be relieved from any such
responsibility if it acts in good
faith and in reliance upon an opinion
of counsel.
Notes presented to the Paying Agent
at maturity for payment will be
cancelled and held by the Paying
Agent. All cancelled Senior Notes
held by the Paying Agent shall be
destroyed, and the Paying Agent shall
fund to the Company a certificate
with respect to such destruction.
Settlement Procedures: Settlement Procedures with regard to
each Note purchased through any
Agent, as agent, shall be as follows:
A.The Presenting Agent will advise
the Company by telephone of the
following settlement information with
regard to each Note:
1.Exact name in which the Note is to
be registered (the "Registered
Owner").
2.Exact address or addresses of the
Registered Owner for delivery,
notices and payments of principal and
interest.
3.Taxpayer identification number of
the Registered Owner.
4.Principal amount of the Note.
5.Denomination of the Note.
6.Terms:
a)interest rate
b)interest payment dates
7.Price to public of the Note.
8.Settlement date (original issue date).
9.Maturity.
10.Net proceeds to the Company.
11.Agent's commission.
B.The Company shall provide to the
Authenticating Agent the above
settlement information received from
the Agents and shall cause the
Authenticating Agent to issue,
authenticate and deliver Notes. The
Company also shall provide to the
Authenticating Agent and/or Agents a
copy of the applicable Pricing
Supplement.
C.The Board of Directors of the
Company or its Executive Committee or
the designee thereof shall approve
the final terms of the Notes.
D.With respect to each trade, the
Trustee will deliver the Notes to the
Presenting Agent at the following
applicable address: Smith Barney
Inc., 390 Greenwich Street - 3rd
Floor, New York, New York 10013,
Attention: Syndicate Operations -
James Steiner; in the case of Morgan
Stanley & Co. Incorporated, Bank of
New York, Dealer Clearance
Department, 1 Wall Street-3rd Floor,
Window 3B, New York, New York 10005,
Attn: For the Account of Morgan
Stanley & Co. Incorporated. The
Trustee will keep a copy of such
Note. The Presenting Agent will
acknowledge receipt of the Note
through a broker's receipt and will
keep a copy of such Note. Delivery
of the Note will be made only against
such acknowledgment of receipt. Upon
determination that the Note has been
authorized, delivered and completed
as aforementioned, the Presenting
Agent will wire the net proceeds of
the Note after deduction of its
applicable commission to the Company
pursuant to standard wire
instructions given by the Company.
E.The Presenting Agent will deliver
the Note (with confirmations), as
well as a copy of the Prospectus and
any applicable Pricing Supplement or
Supplements received from the
Authenticating Agent to the purchaser
against payment in immediately
available funds.
F.The Authenticating Agent will send
a copy of such Note to the Company.
Settlement Procedures For offers accepted by the Company,
Timetable: Settlement Procedures "A" through "F"
set forth above shall be completed on
or before the respective times set
forth below:
Settlement Procedure Time
A-B 3:00 P.M. on the third Business
Day prior to settlement
C No later than Business Day prior
to settlement
D 2:15 P.M. on day of settlement
E 3:00 P.M. on day of settlement
F 5:00 P.M. on day of settlement
Failure to Settle: In the event that a purchaser of a
Note from the Company shall either
fail to accept delivery of or make
payment for a Note on the date fixed
for settlement, the Presenting Agent
will forthwith notify the
Authenticating Agent and the Company
by telephone, confirmed in writing,
and return the Note to the
Authenticating Agent. The
Authenticating Agent upon receipt of
the Note from the Agent, will
immediately advise the Company and
the Company will promptly arrange to
credit the account of the Presenting
Agent in an amount of immediately
available funds equal to the amount
previously paid by such Agent in
settlement for the Note. Such
credits will be made on the
settlement date if possible, and in
any event not later than the Business
Day following the settlement date;
provided that the Company has
received notice on the same day. If
such failure shall have occurred for
any reason other than failure by such
Agent to perform its obligations
hereunder or under the Distribution
Agreement, the Company will reimburse
such Agent on an equitable basis for
its loss of the use of funds during
the period when the funds were
credited to the account of the
Company. Immediately upon receipt of
the Note in respect of which the
failure occurred, the Authenticating
Agent will cancel and destroy the
Note, make appropriate entries in its
records to reflect the fact that the
Note was never issued, and
accordingly notify in writing the
Company.