Exhibit 1(a)
Central Power and Light Company
Junior Subordinated Debentures
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Underwriting Agreement
, 1997
Goldman, Sachs & Co.,
[Names of Co-Representatives,]
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
From time to time Central Power and Light Company, a Texas corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of the Company's Junior Subordinated Deferrable
Interest Debentures (the "Securities"), to be issued pursuant to an Indenture
(the "Indenture") between the Company and The Bank of New York, as trustee, as
heretofore supplemented and amended, including by the supplemental indenture
relating to the Designated Securities (as hereinafter defined). The Securities
specified in Schedule II to such Pricing Agreement are referred to as the
"Designated Securities" with respect to such Pricing Agreement.
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the Indenture.
1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase any of the Securities. The obligation of
the Company to issue and sell any of the Securities and the obligation of any of
the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified therein.
Each Pricing Agreement shall specify the aggregate principal amount of such
Designated Securities, the initial public offering price of such Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters and the principal amount of
such Designated Securities to be purchased by each Underwriter and shall set
forth the date, time and manner of delivery of such Designated Securities, and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333- ) (the
"Initial Registration Statement") in respect of the Securities,
including a prospectus relating to the Securities, and the offering
thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "Act"), has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to such registration statement,
but including all documents incorporated by reference in the prospectus
included therein, to the Representatives for each of the other
Underwriters, has been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Act, which becomes effective upon
filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424 of the rules and regulations of
the Commission under the Act, each in the form heretofore delivered to
the Representatives); and no stop order suspending the effectiveness of
the Initial Registration Statement, and post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened, to the knowledge of the Company, by the Commission (any
preliminary prospectus included in the Initial Registration Statement
or filed with the Commission pursuant to Rule 424(a) under the Act, is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the 462(b) Registration Statement,
if any, including all exhibits thereto and the documents incorporated
by reference in the prospectus contained in the Initial Registration
Statement at the time such part of the Initial Registration Statement
became effective (but excluding Form T-1) or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, each as amended at the time such part of the Initial
Registration Statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the
Securities in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of
this Agreement is hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to the applicable form under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13
(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the applicable Designated Securities in
the form in which it is filed with the Commission pursuant to Rule 424
(b) under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such
filing).
(b) The documents incorporated by reference in the Prospectus, as
amended or supplemented when they became effective or were filed with
the Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents 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; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not include 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; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating
to such Securities.
(c) The Registration Statement, as of its effective date, and the
Prospectus, at the time it is filed with the Commission, conform and
will conform, as the case may be, and any further amendments or
supplements to the Registration Statement or the Prospectus will
conform, in all material respects with the applicable requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission
thereunder; neither the Registration Statement, nor any amendment
thereto, as of the applicable effective date, contains an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and the Prospectus and any amendment or supplement thereto
at the time it is filed with the Commission, does not include and will
not include an untrue statement of a material fact and does not omit
and will not omit to state a material fact necessary to make the
statements therein in light of the circumstances under which they were
made not misleading; provided, however, that this representation and
warranty shall not apply to the part of the Registration Statement that
constitutes the statement of eligibility on Form T-1 under the Trust
Indenture Act of the Property Trustee, the Delaware Trustee and the
Guarantor Trustee (as defined in the Registration Statement) and any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in
the Prospectus as amended or supplemented relating to such Securities.
(d) Since the respective dates as of which information is given in
the Registration Statement and in the Prospectus as amended or
supplemented, there has been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, or
(ii) adverse development concerning the business or assets of the
Company and its subsidiaries, taken as a whole, which would result in a
material adverse change in the prospective financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended or supplemented
(including the financial statements and notes thereto included or
incorporated by reference therein).
(e) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Texas,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus as amended or supplemented,
and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts
any business so as to require such qualification except where the
failure to so qualify would not have a material adverse effect on the
financial condition of the Company and its subsidiaries, taken as a
whole.
(f) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable.
(g) The Company has no significant subsidiaries, as "significant
subsidiary" is defined in Rule 405 of Regulation C of the rules and
regulations promulgated by the Commission under the Act.
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
(i) The Securities have been duly and validly authorized by the
Company, and, when executed, authenticated and delivered in accordance
with the Indenture and pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Securities, such Designated
Securities will be duly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture; the
Indenture has been duly and validly authorized and duly qualified under
the Trust Indenture Act and, at the Time of Delivery (as defined in
Section 4 hereof) for such Designated Securities, the Indenture will
constitute a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Securities conform in all material respects to the
description thereof contained in the Registration Statement and the
Designated Securities will conform in all material respects to the
description thereof contained in the Prospectus as amended or
supplemented.
(j) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject, which are required
to be described in the Prospectus, as amended or supplemented; and
there are no contracts or other documents that are required to be
described in the Registration Statement or the Prospectus as amended or
supplemented or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(k) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its
business and (iii) is in compliance with all terms and conditions of
any such permit, license or approval, except where such noncompliance
with Environmental Laws, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(l) The Commission has entered an order (the "Order") under the
Public Utility Holding Company Act of 1935, as amended (the "1935
Act"), permitting to become effective the Form U-1
Application-Declaration filed by the Company authorizing, among other
things, the issuance and sale of the Securities by the Company. A copy
of such order heretofore entered by the Commission has been or will be
delivered to Goldman, Sachs & Co. on behalf of the Representatives.
(m) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture,
this Agreement and any Pricing Agreement, and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture or other material
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the
Company is subject, nor will such action result in any violation of the
provisions of the Restated Articles of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body, other than the Order, which has been duly obtained and
is in full force and effect, is required, for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement or the
Indenture, except such as have been, or will have been prior to the
Time of Delivery, obtained under the Act, the Exchange Act and the
Trust Indenture Act and such consents, approvals, authorizations,
orders, licenses, certificates, permits, registrations or
qualifications as have already been obtained, or as may be subsequently
obtained in the ordinary course of business, or as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriters.
(n) The Company is not in violation of its organizational documents
or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture
or other material agreement or instrument to which it is a party or by
which it or any of its properties may be bound.
(o) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(p) There are no contracts, agreements or understandings between
the Company and any person that grant such person the right to require
the Company to file a registration statement under the Act with respect
to any capital stock of the Company owned or to be owned by such person
or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement.
(q) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Securities, the several Underwriters propose to offer the Designated Securities
for sale upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor in immediately
available funds by wire transfer to an account designated in writing by the
Company as specified in such Pricing Agreement, all in the manner and at the
place and time and date as the Representatives and the Company may agree upon in
writing, such time and date being herein called the "Time of Delivery".
5. The Company agrees with each of the Underwriters of any
Designated Securities:
(a) To prepare the Prospectus as amended or supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities, or, if
applicable, such time as may be required by Rule 424(b) under the Act;
to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Securities and prior to any Time
of Delivery for such Securities which shall be disapproved in writing
by the Representatives for such Securities promptly after reasonable
notice thereof; to advise the Representatives promptly of any such
amendment or supplement after any Time of Delivery for such Securities
and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of such Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Securities, of the suspension
of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation
or to qualify as a dealer in Securities or to file any general consents
to service of process in any jurisdiction;
(c) To use its best efforts to furnish, prior to 12:00 noon, New
York City time, on the New York Business Day next succeeding the date
of the applicable Pricing Agreement and from time to time during the
period when a prospectus is required to be delivered under the Act by
any Underwriter or dealer, the Underwriters with copies of the
Prospectus as amended or supplemented in New York City in such
quantities as the Representatives may reasonably request, and if, in
the opinion of counsel for the Company, the delivery of a prospectus is
required, at any time in connection with the offering or sale of the
Securities and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would in
the opinion of counsel for the Company, include an untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such period to
amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to
comply in the opinion of counsel for the Company, with the Act, the
Exchange Act or the Trust Indenture Act, to notify the Representatives
and upon their request to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus, if
any, which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings 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 Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the earlier of (i) the date, after the Time of Delivery, on
which the distribution of the Securities ceases, as determined by the
Representatives on behalf of the Underwriters and (ii) 30 days after
the Time of Delivery for such Designated Securities, not to offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder, any debt securities of the Company which mature more than
one year after such Time of Delivery, that are substantially similar to
the Designated Securities, without the prior consent of the
Representatives; and
(f) If the Company elects to rely upon Rule 462(b), to file a Rule
462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m. Washington, D.C. time, on the date of the
applicable Pricing Agreement, and at the time of filing either pay to
the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that it
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers, excluding the fees and disbursements of counsel for
the Underwriters, except as set forth in clause (iii) below and Section 11
hereof; (ii) the cost of printing or producing any Agreement among Underwriters,
this Agreement, any Pricing Agreement, the Indenture, any Blue Sky Memorandum
and any other documents in connection with the offering, purchase, sale and
delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky surveys, not exceeding however $6,000 in the
aggregate; (iv) any fees charged by securities rating services for rating the
Securities; (v) the cost of qualifying the Securities with The Depository Trust
Company; (vi) the cost of preparing the Securities; (vii) all reasonable fees
and expenses of any trustee and its counsel; and (viii) the cost of preparing
certificates for the Securities. It is understood, however, that, except as
provided in this Section and Sections 8 and 11 hereof, the Underwriters will pay
all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of each Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 p.m. Washington, D.C. time, on the date of
the applicable Pricing Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or, to the knowledge of the Company or the Representatives,
threatened by the Commission;
(b) Sidley & Austin, counsel for the Underwriters shall have
furnished to the Representatives such opinion or opinions (a draft of
each such opinion is attached as Annex II(a) hereto), dated each Time
of Delivery for such Designated Securities, with respect to the
incorporation of the Company; insofar as the federal laws of the United
States or the General Corporation Law of the State of Delaware is
concerned, the validity of the Securities; the Registration Statement
and the Prospectus; and other related matters as the Representatives
may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Vinson & Elkins L.L.P., special Texas counsel for the Company,
shall have furnished to the Representatives their written opinion ( a
draft of such opinion is attached as Annex II(b) hereto), dated each
Time of Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect set forth in such
Annex;
(d) Milbank, Tweed, Hadley & McCloy, counsel for the Company shall
have furnished to the Representatives their written opinion (a draft of
such opinion is attached as Annex II(c) hereto), dated each Time of
Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect set forth in such
Annex;
(e) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to the Designated Securities and at each Time of Delivery
for such Designated Securities, Arthur Andersen LLP shall have
furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed
with the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex III hereto,
and with respect to such letter dated such Time of Delivery, as to such
other matters as the Representatives may reasonably request and in form
and substance satisfactory to the Representatives (a draft of the form
of letter to be delivered at a time prior to the execution of the
Pricing Agreement, on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery
may be attached as Annex III hereto);
Subsequent to the respective dates as of which information
is given in each of the Registration Statement and the Prospectus,
there shall not have been any change or decrease specified in the
letters required by subsection (e) of this Section 7 which is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the
delivery of the Designated Securities as contemplated by the
Registration Statement and the Prospectus;
(f) The Indenture shall have been executed and delivered, in
a form reasonably satisfactory to the Representatives;
(g) Since the respective dates as of which information is given
in each of the Registration Statement and in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated
Securities there shall have been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, or
(ii) any adverse development concerning the business or assets of the
Company and its subsidiaries, taken as a whole, which would result in
a material adverse change in the prospective financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended prior to the date
of the Pricing Agreement relating to the Designated Securities
(including the financial statements and notes thereto included or
incorporated by reference in the Registration Statement);
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities no downgrading shall have occurred in the rating
accorded the Securities or the Company's debt securities or preferred
stock by any "nationally recognized statistical rating organization,"
as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act;
(i) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Company's securities on the
New York Stock Exchange; (iii) a general moratorium on commercial
banking activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of
war, if the effect of any such event specified in this Clause (iv) in
the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in
the Prospectus as first amended or supplemented relating to the
Designated Securities; and
(j) The Company shall have furnished or caused to be furnished to
the Representatives at each Time of Delivery for Designated Securities
certificates of officers of the Company satisfactory to the
Representatives, as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder
to be performed at or prior to such Time of Delivery, as to the matters
set forth in subsections (a) and (e) of this Section and as to such
other matters as the Representatives may reasonably request.
8. (a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages or liabilities, joint or several, to
which such Underwriter or such controlling person may become subject under the
Securities Act, the Exchange Act or the common law or otherwise, and to
reimburse each such Underwriter or such controlling person for any reasonable
legal or other expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by it or them in connection with defending
against any such losses, claims, damages or liabilities, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in 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 Underwriters for use in the Registration Statement or the
Prospectus or any amendment or supplement to either thereof or (ii) the failure
of any Underwriter to deliver (either directly or through the Representatives) a
copy of the Prospectus (excluding the documents incorporated therein by
reference), or of the Prospectus as amended or supplemented after it shall have
been amended or supplemented by the Company (excluding the documents
incorporated therein by reference), to any person to whom a copy of any
preliminary prospectus shall have been delivered by or on behalf of such
Underwriter and to whom any Designated Securities shall have been sold by such
Underwriter, as such delivery may be required by the Securities Act and the
rules and regulations of the Commission thereunder.
(b) Each of the Underwriters, severally and not jointly, agrees
to indemnify and hold harmless the Company, each of its officers who signs the
Registration Statement, each of its directors, each person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, each other Underwriter and each person, if any, who so
controls such other Underwriter, from and against any and all losses, claims,
damages or liabilities, joint or several, to which any one or more of them may
become subject under the Securities Act, the Exchange Act or the common law or
otherwise, and to reimburse each of them for any reasonable legal or other
expenses (including, to the extent hereinafter provided, reasonable counsel
fees) incurred by them in connection with defending against any such losses,
claims, damages or liabilities of the character above specified arising out of
or based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus or any amendment
to the Registration Statement or amendment or supplement to the Prospectus or
upon any omission or alleged omission to state in any thereof a material fact
required to be stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by such
Underwriter for use in the Registration Statement or the Prospectus or any
amendment or supplement to either thereof or (ii) the failure of such
Underwriter, due to the negligence of such Underwriter, to deliver (either
directly or through the Representatives) a copy of the Prospectus (excluding the
documents incorporated therein by reference), or of the Prospectus as amended or
supplemented after it shall have been amended or supplemented by the Company
(excluding the documents incorporated therein by reference), to any person to
whom a copy of any preliminary prospectus shall have been delivered by or on
behalf of such Underwriter and to whom any Designated Securities shall have sold
by such Underwriter, as such delivery may be required by the Securities Act and
the rules and regulations of the Commission thereunder.
(c) Promptly after receipt by a party indemnified under this
Section 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), with counsel reasonably satisfactory
to such indemnified party, and shall pay the fees and disbursements of such
counsel related to such action; provided, however, that if the defendants in any
such action include both the indemnified party and the indemnifying party and
representation of both parties would be inappropriate due to actual or potential
differing interests between them, the indemnified party or parties shall have
the right to select separate counsel. 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 8 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 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 (in addition to any local counsel), approved by the
Representatives in the case of subsection (a), representing the indemnified
parties under subsection (a) who are parties to such action and that all such
fees and expenses shall be reimbursed as they are incurred) or (ii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that such liability
shall be only in respect of the counsel referred to in clause (i) or (ii). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section 8 shall
be unenforceable under applicable law by an indemnified party, the Company
agrees to contribute to such indemnified party with respect to any and all
losses, claims, damages 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 Company on the one hand and the
indemnified party on the other hand in connection with the statements or
omissions which have resulted in such losses, claims, damages and liabilities,
as well as any other relevant equitable considerations; provided, however, that
no indemnified party guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
the Company if the Company is not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the indemnified party and each such party's relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and each of the Underwriters agree
that it would not be just and equitable if contribution 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 amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim.
(f) The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company in the
Underwriting Agreement shall remain operative and in full force regardless of
(i) any termination of the Underwriting Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, their directors or officers or any person
controlling the Company and (iii) acceptance of and payment for any of the
Designated Securities.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
twenty-four hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of twenty-four hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall have the right
to postpone a Time of Delivery for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
may be required in the opinion of counsel for the Guarantor. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities with respect to which such Pricing
Agreement shall have been terminated except as provided in Sections 6 and 8
hereof; but, if any Pricing Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of the Pricing
Agreement (excluding those conditions set forth in Section 7(i) hereof), or if
for any reason the Company shall be unable to perform its obligations under the
Pricing Agreement, the Company will reimburse the Underwriters or such
Underwriters who have so terminated the Pricing Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of Underwriters' counsel) reasonably incurred by such Underwriters
in connection with the Pricing Agreement or the offering contemplated
thereunder. The Company shall not in any event be liable to any of the
Underwriters for damages on account of loss of anticipated profits.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As
used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us ____ counterparts hereof.
Very truly yours,
Central Power and Light Company
By: ...........................................
-----------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Names of Co-Representatives]
By: _______________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ANNEX 1
ANNEX I
Pricing Agreement
Goldman, Sachs & Co.,
[Names of Co-Representative(s)],
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004
........... , 1997
Ladies and Gentlemen:
Central Power and Light Company, a Texas corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated __________, 1997 (the "Underwriting Agreement"),
between the Company on the one hand and Goldman, Sachs & Co. [and (names of
Co-Representatives named therein)] on the other hand, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us______ counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
Central Power and Light Company
By: ...........................................
-------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
By: _____________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE I
Principal
Amount of
Designated
Securities
to be
Underwriter Purchased
Goldman, Sachs & Co. $
[Name(s) of Co-Representative(s)]
[Names of other Underwriters]
Total $
SCHEDULE II
Title of Designated Securities:
[ %] Junior Subordinated Deferrable Interest
Debentures due ,
Aggregate principal amount:
[$]
Price to Public:
% of the principal amount of the Designated Securities, plus
accrued interest[, if any,] from to [and accrued
amortization[, if any,] from to ]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization[,if any,] from
to ]
Form of Designated Securities:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the
Representatives]]
[Book-entry only form represented by one or more global
securities deposited with The Depository Trust Company ("DTC") or its
designated custodian for trading in the Same Day Funds Settlement System
of DTC, and to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
Specified Funds for Payment of Purchase Price:
[Federal (same day) Funds [by wire transfer]]
[Describe any blackout provisions with respect to the Designated
Securities]
Time of Delivery:
a.m. (New York City time), , 19
Indenture:
Indenture dated , 19 , between the Company and
, as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates, commencing ....................., 19..]
Extension of Interest Payment Period:
[No provisions for extension]
[The Company has the right, [at any time] during the term of the
Designated Securities, to extend any interest payment period of such Designated
Securities [at any time and from time to time] for a period not to exceed [ ]
and not to extend beyond the Maturity Date]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of [$ ] or an integral multiple thereof,
[on or after , at the following redemption prices (expressed in
percentages of principal amount). If [redeemed on or before , %, and
if] redeemed during the 12-month period beginning ,
Redemption
Year Price
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at the election of
the Company, at a redemption price equal to the principal amount thereof,
plus accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund
to retire [$ ] principal amount of Designated Securities on in each of
the years through
at 100% of their principal amount plus accrued interest[, together
with [cumulative] [noncumulative] redemptions at the option of the
Company to retire an additional [$ ] principal amount of Designated
Securities in the years through at 100% of their principal amount plus
accrued interest.]
[If Designated Securities are extendable debt securities, insert--
Extendable provisions:
Designated Securities are repayable on , [insert date and years], at the
option of the holder, at their principal amount with accrued interest.
The initial annual interest rate will be %, and thereafter the annual
interest rate will be adjusted on , and to a rate not less than
% of the effective annual interest rate on U.S. Treasury obligations
with -year maturities as of the [insert date 15 days prior to
maturity date] prior to such [insert maturity date].]
[If Designated Securities are floating rate debt securities, insert--
Floating rate provisions:
Initial annual interest rate will be % through [and thereafter will be
adjusted [monthly] [on each , , and ] [to an annual rate of % above the
average rate for -year [month] [securities][certificates of deposit]
issued by
and [insert names of banks].] [and the annual interest rate
[thereafter] [from through ] will be the interest yield equivalent
of the weekly average per annum market
discount rate for -month Treasury bills plus % of Interest Differential
(the excess, if any, of (i) the then current weekly average per annum
secondary market yield for -month certificates of deposit over (ii) the
then current interest yield equivalent of the weekly average per annum
market discount rate for -month Treasury bills); [from and thereafter the
rate will be the then current interest yield equivalent plus % of
Interest Differential].]
Defeasance provisions:
Closing location for delivery of Designated Securities:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Additional Closing Conditions:
Paragraph 7(g) of the Underwriting Agreement should be modified in the
event that the Securities are denominated in or indexed to, a currency
other than the U.S. dollar, more than one currency or in a composite
currency. The country or countries issuing such currency should be added to
the banking moratorium and hostilities clauses and the following additional
clause should be added to the paragraph (the entire paragraph should be
restated, as amended):
"; ( ) the imposition of the proposal of exchange controls by any
governmental authority in [insert the country or countries issuing such
currency, currencies or composite currency]".
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]* :
- --------------
* A description of particular tax, accounting or other unusual features (such as
the addition of event risk provisions of the Designated Securities should be set
forth, or referenced to an attached and accompanying description, if necessary,
to ensure agreement as to the terms of the Designated Securities to be purchased
and sold. Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.
ANNEX III
Form of letter of Arthur Andersen LLP
to be delivered pursuant to Section 7(d)
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Prospectus or the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act,
as applicable, and the related published rules and regulations
thereunder, and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representatives of the Underwriters
(the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or the Company's quarterly reports on
Form 10-Q incorporated by reference into the Prospectus as indicated in
their reports thereon copies of which have been separately furnished to
the Representatives; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for such five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to believe
that this information does not conform in all material respects with the
disclosure requirements of Items 301, 302, 402 and 503(d), respectively, of
Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute books
of the Company and its subsidiaries since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that caused them to
believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements
of cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus for them
to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with the
basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on Form
10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included or
incorporated by reference in the Prospectus) or any increase in
the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference
in the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E) there
were any decreases in consolidated net revenue or operating
profit or the total or per share amounts of consolidated net
income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with the comparable period in the preceding
year and with any other period of corresponding length specified
by the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference), or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement and to the Prospectus as amended or
supplemented (including all documents incorporated by reference therein) for the
purposes of the letter delivered either (i) on the effective date of any
post-effective amendment to the Registration Statement or Rule 462(b)
Registration Statement filed subsequent to the date of the Underwriting
Agreement or (ii) at the Time of Delivery, as the case may be.
Exhibit 1(b)
CPL Capital I
Cumulative Quarterly Income Preferred Securities ("QUIPS"SM)*
(liquidation preference $25 per preferred security)
guaranteed by
Central Power and Light Company
Underwriting Agreement
, 1997
Goldman, Sachs & Co.,
[Names of Co-Representatives]
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
From time to time, CPL Capital I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust") and Central Power and
Light Company, a Texas corporation, as depositor of the Trust and as guarantor
(the "Guarantor"), each proposes to enter into one or more Pricing Agreements
(each a "Pricing Agreement") in the form of Annex I hereto, with such additions
and deletions as the parties thereto may determine, and, subject to the terms
and conditions stated herein and therein, to issue and sell to the firms named
in Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of the Trust's Cumulative Quarterly Income Preferred
Securities (liquidation preference $25 per preferred security) (the
"Securities") representing undivided beneficial interests in the assets of the
Trust, guaranteed by the Guarantor as to the payment of distributions, and as to
payments on liquidation or redemption, as set forth in a guarantee agreement
(the "Guarantee") between the Guarantor and The Bank of New York, as trustee
(the "Guarantee Trustee"). The Securities represented by such Pricing Agreement
are referred to as the "Designated Securities" with respect to such Pricing
Agreement. The proceeds of the sale of the Securities and certain of the Trust's
Common Securities (liquidation preference $25 per common security) (the "Common
Securities") by the Trust are to be invested in Junior Subordinated Deferrable
Interest Debentures (the "Subordinated Debentures") of the Guarantor, to be
issued pursuant to an Indenture (the "Indenture") between the Guarantor and The
Bank of New York, as trustee (the "Debenture Trustee"), as heretofore
supplemented and amended, including by the supplemental indenture relating to
the Subordinated Debentures in which the proceeds of the sale of the Designated
Securities are to be invested.
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Securities may be made from
time to time to the Underwriters of such Securities, for whom the firms
designated as representatives of the Underwriters of such Securities in the
Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act
without any firm being designated as their representative. This Underwriting
Agreement shall not be construed as an obligation of the Trust to sell any of
the Securities or as an obligation of any of the Underwriters to purchase any of
the Securities. The obligation of the Trust to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate number of Designated Securities, the initial public offering price
of such Securities or the manner of determining such price, the terms of the
Designated Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters, the number of such Designated
Securities to be purchased by each Underwriter and the commission, if any,
payable to the Underwriters with respect thereto and shall set forth the date,
time and manner of delivery of such Securities, and payment therefor. The
Pricing Agreement shall also specify (to the extent not set forth in the
registration statement and prospectus with respect thereto) the terms of such
Designated Securities. A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. Each of the Guarantor and the Trust, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333- ) (the
"Initial Registration Statement") in respect of the Securities, the
Guarantee and the Subordinated Debentures (collectively, the
"Registered Securities"), including a prospectus relating to the
Registered Securities, and the offering thereof from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended
(the "Act"), has been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement and
any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Representatives and, excluding
exhibits to such registration statement but including all documents
incorporated by reference in the prospectus included therein, to the
Representatives for each of the other Underwriters has been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the Act,
which becomes effective upon filing, no other document with respect to
the Initial Registration Statement or document incorporated by
reference therein has heretofore been filed, or transmitted for
filing, with the Commission (other than prospectuses filed pursuant to
Rule 424 of the rules and regulations of the Commission under the Act,
each in the form heretofore delivered to the Representatives); and no
stop order suspending the effectiveness of the Initial Registration
Statement, and post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or threatened, to the knowledge of the
Guarantor or the Trust, by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) under the Act, is hereinafter
called a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the 462(b) Registration Statement, if any,
including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the Initial Registration Statement
became effective (but excluding Form T-1) or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, each as amended at the time such part of the Initial
Registration Statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the
Registered Securities in the form in which it has most recently been
filed, or transmitted for filing, with the Commission on or prior to
the date of this Agreement is hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference
in such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Guarantor
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing).
(b) The documents incorporated by reference in the Prospectus as
amended or supplemented, when they became effective or were filed with
the Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents 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; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not include 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; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Trust or the Guarantor by an Underwriter of Designated
Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities.
(c) The Registration Statement, as of its effective date, and the
Prospectus, at the time it is filed with the Commission, conform and
will conform, as the case may be, and any further amendments or
supplements to the Registration Statement or the Prospectus will
conform, in all material respects with the applicable requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
thereunder; neither the Registration Statement, nor any amendment
thereto, as of the applicable effective date, contains an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendment or
supplement thereto at the time it is filed with the Commission, does
not include and will not include an untrue statement of a material
fact and does not omit and will not omit to state a material fact
necessary to make the statements therein in light of the circumstances
under which they were made not misleading; provided, however, that
this representation and warranty shall not apply to the part of the
Registration Statement that constitutes the statement of eligibility
on Form T-1 under the Trust Indenture Act of the Property Trustee, the
Delaware Trustee and the Guarantor Trustee and any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Trust or the Guarantor by an Underwriter
of Designated Securities through the Representatives expressly for use
in the Prospectus as amended or supplemented relating to such
Securities.
(d) Since the respective dates as of which information is given
in the Registration Statement and in the Prospectus as amended or
supplemented, there has been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor and its subsidiaries, taken as a whole, or
(ii) adverse development concerning the business or assets of the
Guarantor and its subsidiaries, taken as a whole, which would result
in a material adverse change in the prospective financial condition or
results of operations of the Guarantor and its subsidiaries, taken as
a whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended or supplemented
(including the financial statements and notes thereto included or
incorporated by reference therein).
(e) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act
of the State of Delaware (the "Delaware Business Trust Act") with the
power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented, and the Trust
has conducted and will conduct no business in the future that would be
inconsistent with the description of the Trust set forth in the
Prospectus as amended or supplemented; the Trust is not a party to or
bound by any agreement or instrument other than this Agreement, the
Trust Agreement (the "Trust Agreement") between the Guarantor and the
trustees named therein (the "Trustees"), the Trust Certificate (as
hereinafter defined) and the agreements and instruments contemplated
by the Trust Agreement; the Trust has no liabilities or obligations
other than those arising out of the transactions contemplated by this
Agreement and the Trust Agreement and described in the Prospectus;
based on current law, the Trust is not classified as an association
taxable as a corporation for United States federal income tax
purposes; and the Trust is not a party to or subject to any action,
suit or proceeding of any nature.
(f) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Texas, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus as amended or
supplemented, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business so as to require such qualification except where
the failure to so qualify would not have a material adverse effect on
the financial condition of the Guarantor and its subsidiaries, taken
as a whole.
(g) The Guarantor has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Guarantor have been duly and validly authorized and issued and are
fully paid and non-assessable.
(h) The Guarantor has no significant subsidiaries, as
"significant subsidiary" is defined in Rule 405 of Regulation C of the
rules and regulations promulgated by the Commission under the Act.
(i) This Agreement has been duly authorized, executed and
delivered by each of the Guarantor and the Trust.
(j) The Securities have been duly and validly authorized by the
Trust in accordance with the Trust Agreement, and, when issued and
delivered pursuant to this Agreement and the Pricing Agreement with
respect to such Designated Securities, such Designated Securities,
will be duly and validly issued and fully paid and non-assessable
undivided beneficial interests in the assets of the Trust and be
entitled to the benefits of the Trust Agreement; the Securities
conform in all material respects to the description thereof contained
in the Registration Statement and the Designated Securities will
conform in all material respects to the description thereof contained
in the Prospectus as amended or supplemented; the issuance of the
Securities is not subject to preemptive or other similar rights; and
the terms of the Securities are valid and binding on the Trust; the
Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
(k) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending
or, to the knowledge of the Guarantor, threatened to which the
Guarantor or any of its subsidiaries is a party or to which any of the
properties of the Guarantor or any of its subsidiaries is subject,
which are required to be described in the Prospectus, as amended or
supplemented; and there are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus as amended or supplemented or to be filed as exhibits to
the Registration Statement that are not described or filed as
required.
(l) The Guarantor (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) is in compliance with
all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Guarantor and its subsidiaries, taken as a
whole.
(m) The Common Securities have been duly and validly authorized
by the Trust in accordance with the Trust Agreement and upon issuance
and delivery by the Trust to the Guarantor against payment therefor as
described in the Prospectus, will be duly and validly issued and fully
paid and non-assessable undivided beneficial interests in the assets
of the Trust and be entitled to the benefits of the Trust Agreement;
the Common Securities conform in all material respects to the
description thereof contained in the Prospectus as amended or
supplemented; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Time of Delivery (as
defined in Section 4 hereof), all of the issued and outstanding Common
Securities of the Trust will be directly owned by the Guarantor free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(n) The Guarantee Agreement has been duly and validly authorized
by the Guarantor and when executed and delivered by the Guarantor and
by the Guarantee Trustee will have been duly executed and delivered
and will constitute a valid and legally binding obligation of the
Guarantor enforceable in accordance with its terms, except as limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization and
other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a
proceeding in equity or at law); and the Guarantee has been qualified
under the Trust Indenture Act.
(o) The Subordinated Debentures have been duly and validly
authorized by the Guarantor and when executed, authenticated and
delivered in accordance with the Indenture will have been duly
executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Guarantor enforceable in
accordance with their terms, except as limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization and other similar
laws relating to or affecting creditors' rights generally and general
equitable principles (whether considered in a proceeding in equity or
at law) and the Subordinated Debentures are entitled to the benefits
of the Indenture.
(p) The Trust Agreement has been duly and validly authorized by
the Guarantor and when executed and delivered by the Guarantor and by
the Administrative Trustees will have been duly executed and delivered
and will constitute a valid and legally binding obligation of the
Guarantor enforceable in accordance with its terms, except as limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization and
other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a
proceeding in equity or at law); and the Trust Agreement has been
qualified under the Trust Indenture Act.
(q) The Indenture has been duly and validly authorized by the
Guarantor and when executed and delivered by the Guarantor and the
Debenture Trustee will have been duly executed and delivered and will
constitute a valid and legally binding obligation of the Guarantor
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization and
other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a
proceeding in equity or at law); and the Indenture has been qualified
under the Trust Indenture Act.
(r) The Expense Agreement between the Guarantor and the Trust
(the "Expense Agreement") has been duly and validly authorized by the
Guarantor and when executed and delivered by the Guarantor and the
Trust, will have been duly executed and delivered and will constitute
a valid and legally binding obligation of the Guarantor enforceable in
accordance with its terms, except as limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization and other similar
laws relating to or affecting creditors' rights generally and general
equitable principles (whether considered in a proceeding in equity or
at law).
(s) The Commission has entered an order (the "Order") under the
Public Utility Holding Company Act of 1935, as amended (the "1935
Act"), permitting to become effective the Form U-1
Application-Declaration filed by the Guarantor authorizing the
creation of the Trust, the issue and sale of the Securities by the
Trust, the issuance and delivery of the Common Securities by the
Trust, the issuance and sale of the Subordinated Debentures by the
Guarantor and the execution, delivery and performance of the
Guarantee. A copy of such order heretofore entered by the Commission
has been or will be delivered to Goldman, Sachs & Co. on behalf of the
Representatives.
(t) The issue and sale of the Securities and the Common
Securities by the Trust, the compliance by the Trust with all of the
provisions of this Agreement and any Pricing Agreement, the execution,
delivery and performance by the Trust of the Expense Agreement, the
purchase of the Subordinated Debentures by the Trust, and the
consummation of the transactions contemplated herein and therein will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture
or other material agreement or instrument to which the Trust is a
party or by which the Trust is bound or to which any of the property
or assets of the Trust is subject, nor will such action result in any
violation of the provisions of the Certificate of Trust of the Trust
or the Trust Agreement or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Trust or any of its properties; and no consent, approval,
authorization, order, license, certificate, permit, registration or
qualification of or with any such court or governmental agency or
body, other than the Order, which has been duly obtained and is in
full force and effect, is required, for the issue and sale of the
Securities and the Common Securities by the Trust, the purchase of the
Subordinated Debentures by the Trust or the consummation by the Trust
of the transactions contemplated by this Agreement or any Pricing
Agreement, except such as have been, or will have been prior to the
Time of Delivery (as defined in Section 4 hereof), obtained under the
Act and the Exchange Act, of the Registered Securities and the
Securities, respectively, the qualification of the Trust Agreement,
the Indenture and the Guarantee under the Trust Indenture Act, and
such consents, approvals, authorizations, orders, licenses,
certificates, permits, registrations or qualifications as have already
been obtained, or as may be subsequently obtained in the ordinary
course of business, or as may be required under state securities or
Blue Sky laws in connection with the purchase of the Securities and
the distribution of the Securities by the Underwriters.
(u) The issuance by the Guarantor of the Guarantee, the
compliance by the Guarantor with all of the provisions of this
Agreement and any Pricing Agreement, the execution, delivery and
performance by the Guarantor of the Guarantee Agreement, the
Subordinated Debentures, the Trust Agreement, the Indenture and the
Expense Agreement, and the consummation of the transactions
contemplated herein and therein will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture or other material agreement
or instrument to which the Guarantor or any of its subsidiaries is a
party or by which the Guarantor or any of its subsidiaries is bound or
to which any of the property or assets of the Guarantor or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the Restated Articles of Incorporation or by-laws
of the Guarantor or the charter or by-laws of any of its subsidiaries
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Guarantor or
any of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, license, certificate, permit,
registration or qualification of or with any such court or other
governmental agency or body, other than the Order, which has been duly
obtained and is in full force and effect, is required for the issue of
the Guarantee or the consummation by the Guarantor of the other
transactions contemplated by this Agreement or any Pricing Agreement,
except the registration under the Act of the Registered Securities,
the qualification of the Trust Agreement, the Indenture and the
Guarantee under the Trust Indenture Act and such consents, approvals,
authorizations, orders, licenses, certificates, permits, registrations
or qualifications as have already been obtained, or as may be
subsequently obtained in the ordinary course of business, or as may be
required under state securities or Blue Sky laws and in connection
with the purchase of the Securities and distribution of the Securities
by the Underwriters.
(v) Neither the Trust nor the Guarantor is in violation of its
organizational documents or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any indenture or other material agreement or
instrument to which it is a party or by which it or any of its
properties may be bound.
(w) Neither the Trust nor the Guarantor is, and after giving
effect to the offering and sale of the Securities, neither the Trust
nor the Guarantor will be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(x) There are no contracts, agreements or understandings between
the Trust or the Guarantor and any person that grant such person the
right to require the Trust or the Guarantor to file a registration
statement under the Act with respect to any undivided beneficial
interests in the assets of the Trust or any capital stock of the
Guarantor owned or to be owned by such person or to require the Trust
or the Guarantor to include such securities in the securities
registered pursuant to the Registration Statement.
(y) Arthur Andersen LLP, who have certified certain financial
statements of the Guarantor and the Guarantor's subsidiaries, are
independent public accountants as required by the Act and the rules
and regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities, the several Underwriters propose to offer the Designated
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
4. Certificates for the Designated Securities to be purchased by
each Underwriter pursuant to the Pricing Agreement relating thereto, in the form
specified in such Pricing Agreement, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Trust, shall be delivered by or on behalf
of the Trust to the Representatives for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor in
immediately available funds by wire transfer to an account designated in writing
by the Trust as specified in such Pricing Agreement, all in the manner and at
the place and time and date as the Representatives and the Trust may agree upon
in writing, such time and date being herein called the "Time of Delivery".
5. Each of the Trust and the Guarantor, jointly and severally,
agrees with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business
on the second business day following the execution and delivery of the
Pricing Agreement relating to the applicable Designated Securities,
or, if applicable, such time as may be required by Rule 424(b) under
the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented after
the date of the Pricing Agreement relating to such Securities and
prior to any Time of Delivery for such Securities which shall be
disapproved in writing by the Representatives for such Securities
promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after any
Time of Delivery for such Securities and furnish the Representatives
with copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Trust or
the Guarantor with the Commission pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Securities, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Securities, of the
suspension of the qualification of the Registered Securities for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, promptly to use its
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith
neither the Trust nor the Guarantor shall be required to qualify as a
foreign corporation or trust or to qualify as a dealer in Securities
or to file any general consents to service of process in any
jurisdiction;
(c) To use its best efforts to furnish, prior to 12:00 noon, New
York City time, on the New York Business Day next succeeding the date
of the applicable Pricing Agreement and from time to time during the
period when a prospectus is required to be delivered under the Act by
any Underwriter or dealer, the Underwriters with copies of the
Prospectus as amended or supplemented in New York City in such
quantities as the Representatives may reasonably request, and if, in
the reasonable opinion of counsel to the Guarantor, the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would in the reasonable opinion of counsel for the
Guarantor include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such period to amend or
supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to
comply in the reasonable opinion of counsel for the Guarantor with the
Act or the Exchange Act, to notify the Representatives and upon their
request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request
of an amended Prospectus or a supplement to the Prospectus, if any,
which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Guarantor and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Guarantor, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the earlier of (i) the date, after the Time of Delivery, on
which the distribution of the Securities ceases, as determined by the
Representatives on behalf of the Underwriters, and (ii) 30 days after
the Time of Delivery for such Designated Securities, not to offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Trust, any other beneficial interests
of the Trust, or any preferred securities or any other securities of
the Trust or the Guarantor, as the case may be, that are substantially
similar to the Designated Securities, including the Guarantee, and
including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive
securities, preferred securities or any such substantially similar
securities of either the Trust or the Guarantor, without the prior
consent of the Representatives;
(f) To issue the Guarantee concurrently with the issue and sale
of the Securities as contemplated herein;
(g) To use its best efforts to list, subject to notice of
issuance, the Securities on the New York Stock Exchange; and
(h) If the Trust and the Guarantor elect to rely upon Rule
462(b), to file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m. Washington,
D.C. time, on the date of the applicable Pricing Agreement, and at the
time of filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act.
6. The Guarantor covenants and agrees with the several
Underwriters that it will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Trust's and the Guarantor's counsel and
accountants in connection with the registration of the Registered Securities
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and any amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers, excluding the
fees and disbursements of counsel for the Underwriters, except as set forth in
clause (iii) below and Section 11 hereof; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, the
Indenture, the Guarantee, any Blue Sky Memorandum and any other documents in
connection with the offering, purchase, sale and delivery of the Registered
Securities; (iii) all expenses in connection with the qualification of the
Registered Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky surveys, not exceeding however $6,000 in the aggregate; (iv)
any fees charged by securities rating services for rating the Securities; (v)
the cost and charges of the transfer agent or registrar; (vi) the cost of
qualifying the Securities with The Depository Trust Company; (vii) all
reasonable fees and expenses of the Trustees, the Debenture Trustee, the
Guarantee Trustee and their counsel; (viii) all fees and expenses in connection
with the listing of the Securities on the New York Stock Exchange and the cost
of registering the Securities under Section 12 of the Exchange Act; and (ix) the
cost of preparing certificates for the Securities and the Subordinated
Debentures. It is understood, however, that, except as provided in this Section
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale of
any of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters of any Designated
Securities under the Pricing Agreement relating to such Designated Securities
shall be subject, in the discretion of the Representatives, to the condition
that all representations and warranties and other statements of the Trust and
the Guarantor in or incorporated by reference in the Pricing Agreement relating
to such Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the Trust and the
Guarantor shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Trust and the Guarantor
have elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m. Washington, D.C.
time, on the date of the applicable Pricing Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose
shall have been initiated or, to the knowledge of the Guarantor or the
Representatives, threatened by the Commission;
(b) Sidley & Austin, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions (a draft of
each such opinion is attached as Annex II(a) hereto), dated each Time
of Delivery for such Designated Securities, with respect to: the
incorporation of the Guarantor; insofar as the federal laws of the
United States or the General Corporation Law of the State of Delaware
is concerned, the validity of the Registered Securities and the
Subordinated Debentures; the Registration Statement and the
Prospectus; and other related matters as the Representatives may
reasonably request; and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) Richards, Layton & Finger, P.A., special Delaware counsel for
the Guarantor and the Trust, shall have furnished to the
Representatives their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated each Time of Delivery for such
Designated Securities, in form and substance satisfactory to the
Representatives, to the effect set forth in such Annex;
(d) Milbank, Tweed, Hadley & McCloy, counsel for the Trust and
the Guarantor, shall have furnished to the Representatives their
written opinion (a draft of such opinion is attached as Annex II(c)
hereto), dated each Time of Delivery for such Designated Securities,
in form and substance satisfactory to the Representatives, to the
effect set forth in such Annex;
(e) Vinson & Elkins L.L.P., special Texas counsel for the
Guarantor and the Trust, shall have furnished to the Representatives
their written opinion (a draft of such opinion is attached as Annex
II(d) hereto), dated each Time of Delivery for such Designated
Securities, in form and substance satisfactory to the Representatives,
to the effect set forth in such Annex;
(f) Christy & Viener, special tax counsel for the Guarantor and
the Trust, shall have furnished to the Representatives their written
opinion (a draft of such opinion is attached as Annex II(e) hereto),
dated each Time of Delivery for such Designated Securities, in form
and substance satisfactory to the Representatives, to the effect set
forth in such Annex;
(g) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to the Designated Securities and at each Time of Delivery
for such Designated Securities, Arthur Andersen LLP shall have
furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed
with the Commission containing financial statements and incorporated
by reference in the Registration Statement, if the date of such report
is later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex III hereto,
and with respect to such letter dated such Time of Delivery, as to
such other matters as the Representatives may reasonably request and
in form and substance satisfactory to the Representatives; (a draft of
the form of letter to be delivered at a time prior to the execution of
the Pricing Agreement, on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of
Delivery may be attached as Annex III hereto);
Subsequent to the respective dates as of which information is
given in each of the Registration Statement and the Prospectus, there
shall not have been any change or decrease specified in the letters
required by subsection (g) of this Section 7 which is, in the judgment
of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the
delivery of the Designated Securities as contemplated by the
Registration Statement and the Prospectus;
(h) The Trust Agreement, the Guarantee and the Indenture shall
have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives;
(i) Since the respective dates as of which information is given
in each of the Registration Statement and in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated
Securities there shall have been no (i) material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Guarantor and its subsidiaries, taken as a whole, or
(ii) any adverse development concerning the business or assets of the
Guarantor and its subsidiaries, taken as a whole, which would result
in a material adverse change in the prospective financial condition or
results of operations of the Guarantor and its subsidiaries, taken as
a whole, except such changes as are set forth or contemplated in such
Registration Statement or the Prospectus as amended prior to the date
of the Pricing Agreement relating to the Designated Securities
(including the financial statements and notes thereto included or
incorporated by reference in the Registration Statement);
(i) On or after the date of the Pricing Agreement relating
to the Designated Securities no downgrading shall have
occurred in the rating accorded the Securities or the
Guarantor's debt securities or preferred stock by any
"nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act;
(j) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Guarantor's or the Trust's
securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either Federal or New
York State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the
United States of war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Designated Securities on the terms and in the
manner contemplated in the Prospectus as first amended or supplemented
relating to the Designated Securities;
(k) The Securities at each Time of Delivery shall have been
approved for listing, subject to notice of issuance, on the New York
Stock Exchange; and
(l) The Trust and the Guarantor shall have furnished or
caused to be furnished to the Representatives at each Time
of Delivery for Designated Securities certificates of
officers or Administrative Trustees of the Trust (as defined
in the Trust Agreement), as applicable, of the Guarantor and
the Trust, satisfactory to the Representatives, as to the
accuracy of the representations and warranties of the Trust
and the Guarantor herein at and as of such Time of Delivery,
as to the performance by the Trust and the Guarantor of all
of their obligations hereunder to be performed at or prior
to such Time of Delivery, as to the matters set forth in
subsections (a) and (h) of this Section and as to such other
matters as the Representatives may reasonably request.
8. (a) The Trust and the Guarantor, jointly and severally, agree
to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against
any and all losses, claims, damages or liabilities, joint or several,
to which such Underwriter or such controlling person may become
subject under the Securities Act, the Exchange Act or the common law
or otherwise, and to reimburse each such Underwriter or such
controlling person for any reasonable legal or other expenses
(including, to the extent hereinafter provided, reasonable counsel
fees) incurred by it or them in connection with defending against any
such losses, claims, damages or liabilities, arising out of or based
upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or
supplemented if the Guarantor 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 Trust or the Guarantor by any
of the Underwriters for use in the Registration Statement or the
Prospectus or any amendment or supplement to either thereof or (ii)
the failure of any Underwriter to deliver (either directly or through
the Representatives) a copy of the Prospectus (excluding the documents
incorporated therein by reference), or of the Prospectus as amended or
supplemented after it shall have been amended or supplemented by the
Guarantor (excluding the documents incorporated therein by reference),
to any person to whom a copy of any preliminary prospectus shall have
been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have been sold by such Underwriter, as
such delivery may be required by the Securities Act and the rules and
regulations of the Commission thereunder.
(b) Each of the Underwriters, severally and not jointly, agrees
to indemnify and hold harmless the Trust and the Guarantor, each of
their officers who signs the Registration Statement, each of their
directors, each person who controls the Trust or the Guarantor within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each other Underwriter and each person, if any, who so
controls such other Underwriter, from and against any and all losses,
claims, damages or liabilities, joint or several, to which any one or
more of them may become subject under the Securities Act, the Exchange
Act or the common law or otherwise, and to reimburse each of them for
any reasonable legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred by them in
connection with defending against any such losses, claims, damages or
liabilities of the character above specified arising out of or based
upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the
Prospectus or any amendment to the Registration Statement or amendment
or supplement to the Prospectus or upon any omission or alleged
omission to state in any thereof a material fact required to be stated
therein or necessary to make the statements therein not misleading if
such statement or omission was made in reliance upon and in conformity
with information furnished in writing to the Trust or the Guarantor by
such Underwriter for use in the Registration Statement or the
Prospectus or any amendment or supplement to either thereof or (ii)
the failure of such Underwriter, due to the negligence of such
Underwriter, to deliver (either directly or through the
Representatives) a copy of the Prospectus (excluding the documents
incorporated therein by reference), or of the Prospectus as amended or
supplemented after it shall have been amended or supplemented by the
Guarantor (excluding the documents incorporated therein by reference),
to any person to whom a copy of any preliminary prospectus shall have
been delivered by or on behalf of such Underwriter and to whom any
Designated Securities shall have sold by such Underwriter, as such
delivery may be required by the Securities Act and the rules and
regulations of the Commission thereunder.
(c) Promptly after receipt by a party indemnified under this
Section 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), with counsel reasonably satisfactory to such
indemnified party, and shall pay the fees and disbursements of such
counsel related to such action; provided, however, that if the
defendants in any such action include both the indemnified party and
the indemnifying party and representation of both parties would be
inappropriate due to actual or potential differing interests between
them, the indemnified party or parties shall have the right to select
separate counsel. 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 8 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 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 (in addition
to any local counsel), approved by the Representatives in the case of
subsection (a), representing the indemnified parties under subsection
(a) who are parties to such action and that all such fees and expenses
shall be reimbursed as they are incurred) or (ii) the indemnifying
party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that such
liability shall be only in respect of the counsel referred to in
clause (i) or (ii). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 8 shall
be unenforceable under applicable law by an indemnified party, the
Trust and the Guarantor, jointly and severally, agree 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 Trust and the
Guarantor on the one hand and the indemnified party on the other hand
in connection with the statements or omissions which have resulted in
such losses, claims, damages and liabilities, as well as any other
relevant equitable considerations; provided, however, that no
indemnified party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from the Trust or the Guarantor if the Trust or the
Guarantor, respectively, 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 Trust or the
Guarantor 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 Trust, the Guarantor
and each of the Underwriters agree that it would not be just and
equitable if contribution 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 amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
(f) The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Trust and the
Guarantor in the Underwriting Agreement shall remain operative and in
full force regardless of (i) any termination of the Underwriting
Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on
behalf of the Trust or the Guarantor, their directors or officers or
any person controlling the Trust or the Guarantor and (iii) acceptance
of and payment for any of the Designated Securities.
9. (a) If any Underwriter shall default in its obligation to
purchase the Designated Securities which it has agreed to purchase
under the Pricing Agreement relating to such Designated Securities,
the Representatives may in their discretion arrange for themselves or
another party or other parties to purchase such Designated Securities
on the terms contained herein. If within twenty-four hours after such
default by any Underwriter the Representatives do not arrange for the
purchase of such Designated Securities, then the Trust and the
Guarantor shall be entitled to a further period of twenty-four hours
within which to procure another party or other parties satisfactory to
the Representatives to purchase such Designated Securities on such
terms. In the event that, within the respective prescribed period, the
Representatives notify the Trust and the Guarantor that they have so
arranged for the purchase of such Designated Securities, or the Trust
or the Guarantor notifies the Representatives that it has so arranged
for the purchase of such Designated Securities, the Representatives or
the Trust and the Guarantor shall have the right to postpone a Time of
Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Trust and the Guarantor agree
to file promptly any amendments or supplements to the Registration
Statement or the Prospectus which may be required in the opinion of
counsel for the Guarantor. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to the
Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase
of the Designated Securities of a defaulting Underwriter or
Underwriters by the Representatives and the Trust and the Guarantor as
provided in subsection (a) above, the aggregate number of such
Designated Securities which remains unpurchased does not exceed
one-eleventh of the aggregate number of the Designated Securities to
be purchased at the respective Time of Delivery, then the Trust and
the Guarantor shall have the right to require each non-defaulting
Underwriter to purchase the number of Designated Securities which such
Underwriter agreed to purchase under the Pricing Agreement relating to
such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on
the number of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of
such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Designated Securities of a defaulting Underwriter or
Underwriters by the Representatives and the Trust and the Guarantor as
provided in subsection (a) above, the aggregate number of Designated
Securities which remains unpurchased exceeds one-eleventh of the
aggregate number of Designated Securities to be purchased at the
respective Time of Delivery, as referred to in subsection (b) above,
or if the Trust and the Guarantor shall not exercise the right
described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting
Underwriter or Underwriters, then the Pricing Agreement relating to
such Designated Securities shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter, the Trust or
the Guarantor, except for the expenses to be borne by the Guarantor
and the Underwriters as provided in Section 6 hereof and the indemnity
and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Trust, the Guarantor and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Trust, the Guarantor or any officer, trustee or director or
controlling person of the Trust or the Guarantor, and shall survive delivery of
and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to
Section 9 hereof, neither the Trust nor the Guarantor shall then be under any
liability to any Underwriter with respect to the Designated Securities with
respect to which such Pricing Agreement shall have been terminated except as
provided in Sections 6 and 8 hereof; but, if any Pricing Agreement shall be
terminated by the Underwriters, or any of them, because of any failure or
refusal on the part of the Trust or the Guarantor to comply with the terms or to
fulfill any of the conditions of the Pricing Agreement (excluding those
conditions set forth in Section 7(j) hereof), or if for any reason the Trust or
the Guarantor shall be unable to perform its obligations under the Pricing
Agreement, the Trust and the Guarantor will reimburse the Underwriters or such
Underwriters who have so terminated the Pricing Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of Underwriters' counsel) reasonably incurred by such Underwriters
in connection with the Pricing Agreement or the offering contemplated
thereunder. Neither the Trust nor the Guarantor shall in any event be liable to
any of the Underwriters for damages on account of loss of anticipated profits.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Securities shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if any,
as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall
be in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Representatives as set
forth in the Pricing Agreement; and if to the Trust or the Guarantor shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Trust or the Guarantor, respectively, set forth in the Registration Statement,
Attention: Secretary; provided, however that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Trust and the Guarantor by the Representatives
upon request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Trust, the
Guarantor and, to the extent provided in Sections 8 and 10 hereof, the officers,
trustees and directors of the Guarantor and the Trust and each person who
controls the Trust, the Guarantor or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As
used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by
any one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us __________ counterparts hereof.
Very truly yours,
Central Power and Light Company
By:
Name:
Title:
CPL Capital I
By: Central Power and Light Company, as
Depositor
By:
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Names of Co-Representatives]
By:
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
ANNEX I
Pricing Agreement
Goldman, Sachs & Co.,
[Names of Co-Representative(s),]
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
CPL Capital I, a statutory business trust formed under the laws
of the State of Delaware (the "Trust") and Central Power and Light Company, a
Texas corporation (the "Guarantor"), each proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated ________, 1997
(the "Underwriting Agreement"), among the Trust and the Guarantor on the one
hand and Goldman, Sachs & Co. [and (names of Co-Representatives named therein)]
on the other hand, to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") the Securities specified in Schedule II hereto (the
"Designated Securities"). Each of the provisions of the Underwriting Agreement
is incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust, at the time and place and
at the purchase price to the Underwriters set forth in Schedule II hereto, the
number of Designated Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
If the foregoing is in accordance with your understanding, please
sign and return to us _________ counterparts hereof, and upon acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Trust and the Guarantor. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Trust and the Guarantor for
examination but without warranty on the part of the Representatives as to the
authority of the signers thereof.
Very truly yours,
CPL Capital I
By:
Name:
Title:
Central Power and Light Company
By:
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
By:
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE I
Underwriter Number of
Designated Securities
to be Purchased
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
[Names of other Underwriters]
Total
SCHEDULE II
Title of Designated Securities:
Number of Designated Securities:
Initial Offering Price to Public:
[$___ per Preferred Security] [formula]
Purchase Price by Underwriters:
[$____ per Preferred Security][Formula]
[Commission Payable to Underwriters:
$_________ per Preferred Security in Federal (same day) Funds [by wire
transfer]]
Form of Designated Shares:
[Definitive form, to be made available for checking [and packaging] at least
twenty-four hours prior to the Time of Delivery at the office of [The Depository
Trust Company or its designated custodian] [the Representatives]]
[Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian for
trading in the Same Day Funds Settlement System of DTC, and to be made available
for checking by the Representatives at least twenty-four hours prior to the Time
of Delivery at the office of DTC.]
Specified Funds for Payment of Purchase Price:
[Federal (same day) Funds [by wire transfer]]
[Describe any blackout provisions with respect to the Designated Securities]
Time of Delivery:
____ a.m. (New York City time), _________, 19___
Closing Location:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Names and addresses of Representatives:
Designated Representatives
Address for Notices, etc.:
[Other Terms]*:
__________________________
* A description of particular tax, accounting or other unusual features
(including any event risk provisions) of the Designated Securities should be set
forth, or referenced to an attached or accompanying description, if necessary,
to ensure agreement as to the terms of the Designated Securities to be purchased
and sold. Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.
ANNEX II(a)
Form of Opinion of Sidley & Austin
Goldman, Sachs & Co.
[Names of Co-Representatives]
c/o Go dman, Sachs & Co.
as Representatives of the Several Underwriters
85 Broad Street
New York, New York 10004
Re: CPL Capital I % Cumulative Quarterly
Income Preferred Securities, Series
Dear Ladies and Gentlemen:
We address this opinion to you individually and as
Representatives of the Underwriters (the "Underwriters") named in Schedule I to
the Pricing Agreement dated _________, 1997 (the "Pricing Agreement") among you,
as such Representatives, Central Power and Light Company, a Texas corporation
(the "Guarantor"), and CPL Capital I, a statutory business trust organized under
the Business Trust Act of the State of Delaware (the "Trust" and, together with
the Guarantor, the "Offerors"), with respect to the issuance and sale pursuant
thereto and to the Underwriting Agreement dated [ ] _________, 1997 (together
with the Pricing Agreement, the "Underwriting Agreement"), among you, as such
Representatives, and the Offerors of $___________ in aggregate liquidation
amount of the ____% Cumulative Quarterly Income Preferred Securities, Series
[__] ($25 liquidation preference per security), of the Trust (the "Securities").
The Securities are being issued under the Amended and Restated Trust Agreement
dated as of ________, 1997 (the "Trust Agreement") among the Guarantor, The Bank
of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware
Trustee, and the Administrative Trustees named therein. Capitalized terms not
defined herein have the meanings specified in the Underwriting Agreement.
As counsel for the Underwriters, we have, among other things,
participated with officers and representatives of the Guarantor, including its
counsel and independent public accountants, and representatives of the
Underwriters in the preparation of the Offerors' Registration Statement on Form
S-3 (Registration No. 333- ________), filed on ________, 1997 with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), which registration statement became effective
on __________, 1997. Such registration statement at the time it became effective
(including all documents incorporated by reference therein pursuant to Item 12
of Form S-3 at the date hereof (the "Incorporated Documents")), is hereinafter
called the "Registration Statement." The Offerors' Prospectus Supplement dated
__________, 1997, which was filed with the Commission
on ________, 1997, together with the Prospectus dated _________, 1997 (including
the Incorporated Documents) included in the Registration Statement, are
hereinafter collectively called the "Prospectus."
Pursuant to Section 7(b) of the Underwriting Agreement, this
will advise you that in the opinion of the undersigned, as counsel for the
Underwriters:
1. The Guarantor has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Texas.
2. Each of the Underwriting Agreement and the Pricing Agreement
has been duly authorized, executed and delivered by the Guarantor and by the
Guarantor as Depositor on behalf of the Trust;
3. The Indenture and the [First] Supplemental Indenture dated
as of ________, 1997 and as of _________, 1997, respectively (collectively the
"Indenture"), between the Guarantor and The Bank of New York, as trustee (the
"Indenture Trustee"), under which $________ aggregate principal amount of the
Guarantor's __% Junior Subordinated Deferrable Interest Debentures, Series ___
(the "Subordinated Debentures") are being issued on the date hereof, have been
duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
4. The Indenture has been duly authorized, executed and
delivered by the Guarantor and, assuming the Indenture has been duly authorized,
executed and delivered by the Indenture Trustee, constitutes the legal, valid
and binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms; and the Indenture conforms in all material respects
to the description thereof contained in the Prospectus;
5. The Guarantee Agreement dated as of ______, 1997 (the
"Guarantee") between the Guarantor and The Bank of New York, as trustee (the
"Guarantee Trustee"), has been duly qualified under the Trust Indenture Act.
6. The Guarantee has been duly authorized, executed and
delivered by the Guarantor and, assuming the Guarantee has been duly authorized,
executed and delivered by the Guarantee Trustee, constitutes the legal, valid
and binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms; and the Guarantee conforms in all material respects
to the description thereof contained in the Prospectus.
7. The Subordinated Debentures have been duly authorized,
executed and delivered by the Guarantor and, when authenticated, issued and
delivered as specified in or pursuant to the Indenture against payment of the
agreed consideration therefor as provided in __________, will constitute valid
and legally binding obligations of the Guarantor enforceable against the
Guarantor in accordance with their respective terms and will be entitled to the
benefits provided by the Indenture; and the Subordinated
Debentures conform in all material respects to the description thereof contained
in the Prospectus.
8. The Securities conform in all material respects to the
description thereof contained in the Prospectus and are entitled to the benefits
provided by the Trust Agreement.
9. The statements contained in the Prospectus under the
captions "Description of the Preferred Securities," "Description of the
Guarantees," "Description of the Debentures," "Certain Terms of the Series __
Preferred Securities," "Certain Terms of the Series __ Guarantee," "Certain
Terms of the Series __ Debentures" and "Relationship Among the Preferred
Securities, the Debentures and the Guarantees," insofar as such statements
purport to constitute a summary of the terms of the securities therein
described, fairly summarize the terms of such securities.
10. The statements set forth in the Prospectus under the
captions "Underwriting" and "Plan of Distribution," insofar as they purport to
describe the provisions of the laws or documents referred to therein, fairly
summarize the terms of such provisions.
11. 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 that purpose are
pending or threatened under the Act.
12. The Registration Statement, as of its effective date, and
the Prospectus, as of its issue date and the date hereof (except, in each case,
for the financial statements, financial data and supporting schedules included
or incorporated by reference therein and for the Specified Information, as to
none of which we express any opinion), complied and complies as to form in all
material respects with the Act and the rules and regulations of the Commission
promulgated thereunder. The term "Specified Information" means the following
information which has been included or incorporated by reference in the
Registration Statement and the Prospectus: _____________________.
13. The Trust is not an "investment company" or an
entity "controlled" by an "investment company" required to be registered under
the 1940 Act.
14. The order of the Commission dated ________, 1997, in File
No. ________, issued under the Public Utility Holding Company Act of 1935, as
amended, relating, among other things, to the creation of the Trust, the
issuance and sale of the Securities by the Trust, the issuance and sale of the
Subordinated Debentures by the Guarantor and the execution, delivery and
performance of the Guarantee (being the order of the Commission referred to in
subsection (s) of Section 2 of the Underwriting Agreement) has been entered and,
to our knowledge, is still in full force and effect. Except for the
effectiveness of the Registration Statement, no other approval, authorization,
consent, certificate or order of any commission or regulatory authority of the
United States of America is necessary with respect to the issuance and sale of
the
Registered Securities by the Offerors as contemplated by the Underwriting
Agreement and the Prospectus.
In the course of the preparation of the Registration Statement
and the 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 officers and representatives of the
Guarantor, including its counsel and independent public accountants, and your
representatives, during the course of which the contents of the Registration
Statement and the Prospectus and related matters were discussed. 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 Prospectus; and we have relied as to materiality,
to the extent we may properly do so in the discharge of our professional
responsibilities, upon the judgment of officers and representatives of the
Guarantor. However, as a result of such consideration and participation, nothing
has come to our attention which causes us to believe that the Registration
Statement (other than the financial statements, financial data and supporting
schedules included or incorporated by reference therein and the Specified
Information, as to which we express no belief), at the time it became effective,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus (other than the financial statements,
financial data and supporting schedules included or incorporated by reference
therein and the Specified Information, as to which we express no belief), at the
time the Registration Statement became effective and at the date hereof,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
For the purpose of rendering the foregoing opinions and
statements, we have relied, as to various questions of fact material to such
opinions and statements, upon the representations made in the Underwriting
Agreement and the Pricing Agreement and upon certificates of officers of the
Guarantor. 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 such opinions. 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.
Except as otherwise stated in the third sentence of this
paragraph, this opinion is limited to the laws of the State of New York and the
federal laws of the United States of America. We have examined copies of the
Guarantor's Articles of Incorporation, as amended to date, and its currently
effective By-laws and certificates issued by the Secretary of State and the
Comptroller of Public Accounts of the State of Texas on ___________, 1997.
Notwithstanding such examination, we have relied, with
your consent, as to the incorporation of the Guarantor and as to all other
matters covered by this letter on the opinion dated and delivered to you this
date of Vinson & Elkins L.L.P., subject to the exceptions, qualifications and
limitations therein expressed.
Any opinion or statement herein which is expressed to be "to
our knowledge" or is otherwise qualified by words of like import means that the
lawyers in this firm who have had an involvement in the preparation of the
Registration Statement and the Prospectus and the transactions contemplated by
the Underwriting Agreement have no current conscious awareness of any facts or
information contrary to such opinion or statement.
The opinions expressed in paragraphs 4, 6 and 7 with respect
to the enforceability of the documents therein referenced are subject to the
qualification that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws affecting
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
This letter 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 our prior written consent. We assume no
obligation to update this opinion after the date hereof.
Very truly yours,
ANNEX II(b)
Form of Opinion of Richards, Layton & Finger
_______ __, 1997
Goldman, Sachs & Co.
[Names of Co-Representatives]
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Re: CPL Capital I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Central Power
and Light Company, a Texas corporation (the "Company"), and CPL Capital I, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
The Certificate of Trust of the Trust, dated as of
______ __, 1997 (the "Certificate"), as filed in the office of the Secretary of
State of the State of Delaware (the "Secretary of State") on _______ __, 1997;
The Trust Agreement of the Trust, dated as of
January __, 1997, between the Company and the trustees of the Trust named
therein (collectively, the "Trustees"), as amended and restated pursuant to an
Amended and Restated Trust Agreement of the Trust, dated as of ________ __,
1997, among the Company, the
Goldman, Sachs & Co.
[Names of Co-Representatives]
_________ __, 1997
Page 2
Trustees and the holders, from time to time, of the undivided beneficial
interests in the assets of the Trust (including the Exhibits C and E thereto)
(collectively, the "Trust Agreement");
(c) The Underwriting Agreement and the Pricing Agreement,
each dated as of January __, 1997 (collectively, the "Underwriting Agreement"),
among the Trust, the Company and the Underwriters named therein;
(d) The Prospectus dated January __, 1997, as
supplemented by the Prospectus Supplement dated ________ __, 1997 (collectively,
the "Prospectus"), relating to the ____% Cumulative Quarterly Income Preferred
Securities, Series A, of the Trust representing undivided beneficial interests
in the assets of the Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities"); and
(e) A Certificate of Good Standing for the Trust, dated
________ __, 1997, obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Trust Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation, and termination of the Trust, and
Goldman, Sachs & Co.
[Names of Co-Representatives]
_________ __, 1997
Page 3
that the Trust Agreement and the Certificate are in full force and effect and
have not been amended, (ii) except to the extent provided in paragraph 1 below,
the due creation, due formation or due organization, as the case may be, and
valid existence in good standing of each party to the documents examined by us
under the laws of the jurisdiction governing its creation, formation or
organization, (iii) the legal capacity of each signatory to the documents
examined by us, (iv) except to the extent set forth in paragraph 4 below, that
each of the parties to the documents examined by us has the power and authority
to execute and deliver, and to perform its obligations under, such documents,
(v) except to the extent provided in paragraph 5 below, that each of the parties
to the documents examined by us has duly authorized, executed and delivered such
documents, (vi) the receipt by each Person to whom a Preferred Security is to be
issued by the Trust (collectively, the "Preferred Security Holders") of a
Preferred Securities Certificate and the payment for the Preferred Security
acquired by it, in accordance with the Trust Agreement and the Prospectus, and
(vii) that the Preferred Securities are issued and sold to the Preferred
Security Holders in accordance with the Trust Agreement and the Prospectus,
(viii) the receipt by the Person (the "Common Security Holder") to whom a Common
Security of the Trust representing common undivided beneficial interests in the
assets of the Trust (each, a "Common Security" and collectively, the "Common
Securities") (the Preferred Securities and the Common Securities being
hereinafter collectively referred to as "Trust Securities") is to be issued by
the Trust of a Common Securities Certificate for the Common Security and the
payment for the Common Security acquired by it, in accordance with the Trust
Agreement, and as described in the Prospectus, (ix) that the Common Securities
are issued and sold to the Common Security Holder in accordance with the Trust
Agreement, and as described in the Underwriting Agreement, (x) that the Trust
derives no income from or connected with sources within the State of Delaware
and has no assets, activities (other than having a Delaware trustee as required
by the Delaware Business Trust Act and filing documents with the Secretary of
State) or employees in the State of Delaware, and (xi) that the Trust is treated
as a grantor trust for federal income tax purposes. We have not participated in
the preparation of the Prospectus and assume no responsibility for its contents
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Goldman, Sachs & Co.
[Names of Co-Representatives]
_________ __, 1997
Page 4
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions as set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been made.
2. Under the Trust Agreement and the Delaware Business Trust Act,
the Trust has the trust power and authority to own its properties and conduct
its business, all as described in the Prospectus.
3. The Trust Agreement constitutes a legal, valid and binding
obligation of the Company and the Trustees, and is enforceable against the
Company and the Trustees, in accordance with its terms.
4. Under the Trust Agreement and the Delaware Business Trust Act,
the Trust has the power and authority to (A) execute and deliver, and to perform
its obligations under, the Underwriting Agreement, and (B) issue and perform its
obligations under the Trust Securities.
5. Under the Trust Agreement and the Delaware Business Trust Act,
the execution and delivery by the Trust of the Underwriting Agreement, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary trust action on the part of the Trust.
6. The Preferred Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and nonassessable undivided
beneficial interests in the assets of the Trust and are entitled to the benefits
of the Trust Agreement (subject to the terms of the Trust Agreement). The
Preferred Security Holders, as beneficial owners of the Trust, will be entitled
to the same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. We note that the Preferred Security Holders may be obligated,
pursuant to the Trust Agreement, (A) to provide indemnity and/or security in
connection with and pay
Goldman, Sachs & Co.
[Names of Co-Representatives]
_________ __, 1997
Page 5
taxes or governmental charges arising from transfers or exchanges
of Preferred Securities Certificates and the issuance of replacement Preferred
Securities Certificates, and (B) to provide security or indemnity in connection
with requests of or directions to the Property Trustee to exercise its rights
and powers under the Trust Agreement.
7. The Common Securities have been duly authorized by the Trust
Agreement and are duly and validly issued undivided beneficial interests in the
assets of the Trust.
8. Under the Trust Agreement and the Delaware Business Trust Act,
the issuance of the Trust Securities is not subject to preemptive rights.
9. The issuance and sale of the Trust Securities by the Trust,
the execution and delivery by the Trust of the Underwriting Agreement, the
consummation by the Trust of the transactions contemplated by the Underwriting
Agreement and compliance by the Trust with its obligations under the
Underwriting Agreement do not violate (A) any of the provisions of the
Certificate or the Trust Agreement or (B) any applicable Delaware law or
Delaware administrative regulation.
10. No authorization, approval, consent or order of any Delaware
court or any Delaware governmental authority or Delaware agency is required to
be obtained by the Trust solely in connection with the issuance and sale of the
Trust Securities.
11. The Preferred Security Holders (other than those Preferred
Security Holders who reside or are domiciled in the State of Delaware) will have
no liability for income taxes imposed by the State of Delaware solely as a
result of their participation in the Trust, and the Trust will not be liable for
any income tax imposed by the State of Delaware.
The opinions expressed in paragraph 3 above are subject, as to
enforcement, to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or affecting the
rights and remedies of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions relating to
indemnification or contribution.
Goldman, Sachs & Co.
[Names of Co-Representatives]
_________ __, 1997
Page 6
We consent to your relying as to matters of Delaware law upon
this opinion in connection with the Purchase Agreement. We also consent to
Milbank, Tweed, Hadley & McCloy and Sidley & Austin's relying as to matters of
Delaware law upon this opinion in connection with opinions to be rendered by
them on the date hereof pursuant to the Underwriting Agreement. Except as stated
above, without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
CDK/JLJ
ANNEX II(c)
Form of Milbank, Tweed, Hadley & McCloy
Opinion Letter
[-----------], [----]
Goldman, Sachs & Co.
[-------------------]
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Re: CPL Capital I
[ ]% Cumulative Quarterly Income Preferred
Securities, Series A
Ladies and Gentlemen:
We have acted as special counsel to Central Power and Light
Company, a Texas corporation (the "Company"), and CPL Capital I, a statutory
business trust formed under the laws of the State of Delaware ("CPL Capital"),
in connection with the purchase by you, severally, from CPL Capital, pursuant to
the Underwriting Agreement and related Pricing Agreement, each dated
[__________], [____] (together, the "Underwriting Agreement"), among you, CPL
Capital and the Company, of [_________] [____]% Cumulative Quarterly Income
Preferred Securities, Series A ("Preferred Securities"). The Preferred
Securities will be issued pursuant to the Amended and Restated Trust Agreement
of CPL Capital, dated as of [__________], [____] (the "Trust Agreement"), among
the Company,
- 2 -
as depositor, The Bank of New York, as property trustee (the "Property
Trustee"), The Bank of New York (Delaware), as Delaware trustee (the "Delaware
Trustee") and Wendy G. Hargus and R. Russell Davis, as administrative trustees
(the "Administrative Trustees"). In connection with the issuance by CPL Capital
of the Preferred Securities, CPL Capital is to purchase from the Company, as
contemplated in the Underwriting Agreement, Junior Subordinated Deferrable
Interest Debentures, [____]% Series due [____], in the principal amount of
$[_________] (the "Junior Subordinated Debentures"). The Junior Subordinated
Debentures are to be issued under and pursuant to the Indenture, dated as of
[_________], [____] (the "Indenture"), between the Company and The Bank of New
York, as trustee (the "Trustee"), and the related Supplemental Indenture dated
[_________], [____]. Also in connection with the issuance by CPL Capital of the
Preferred Securities, the Company will guarantee (the "Guarantee") the Preferred
Securities to the extent set forth in a Guarantee Agreement dated as of
[______], [____], between the Company and The Bank of New York, as trustee (the
"Guarantee Agreement"). Capitalized terms used herein and not otherwise defined
have the meanings ascribed to them in the Underwriting Agreement.
We have examined originals, or copies certified to our
satisfaction, of such corporate records of the Company and such trust records of
CPL Capital, indentures, agreements and other
- 3 -
instruments, certificates of public officials, certificates of officers and
representatives of the Company and of CPL Capital 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,
the authenticity of all documents submitted to us as originals, the conformity
with the original documents 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 the Company, CPL
Capital, officers of the Company, the Property Trustee, the Delaware Trustee and
the Administrative Trustees and other appropriate persons and statements
contained in the Registration Statement hereinafter mentioned.
In addition, we attended the closing held today at our
offices, during the course of which (i) CPL Capital delivered the Preferred
Securities to your representatives at the office of The Depository Trust
Company, 55 Water Street, New York, New York, for your several accounts, in
accordance with the Underwriting Agreement, against payment therefor and (ii)
the Company caused the Junior Subordinated Debentures to be delivered to CPL
Capital, against payment thereof.
- 4 -
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 Texas.
2. The Underwriting Agreement has been duly authorized,
executed and delivered by each of CPL Capital and the Company.
3. The Registration Statement (Nos. [__________] and
[____________]) on Form S-3, as amended, with respect to the Preferred
Securities, the Junior Subordinated Debentures and the Guarantee (the
"Registration Statement"), filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of 1933,
as amended (the "Act"), has become effective and, to our knowledge, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending under the Act. The Prospectus, dated
[_____________], 1997, as amended by the Prospectus Supplement, dated
[____________], 1997 (the "Prospectus"), including all documents
incorporated by reference therein pursuant to the requirements of Form
S-3 under the Act, constituting a part thereof, may lawfully be used
for the purposes specified in the Act in connection with the offer and
sale of the Preferred Securities in the manner therein specified,
subject to compliance with the provisions of "blue sky" or securities
laws of certain States in connection with the offer for sale or sale of
the Preferred Securities in such States.
4. The Registration Statement and the Prospectus, including
all documents incorporated by reference pursuant to the requirements of
Form S-3 under the Act (other than financial statements and related
schedules and other financial and statistical data included or
incorporated by reference therein or omitted therefrom, as to which we
express no opinion or belief), as of their respective effective or
issue dates complied as to form, in all material respects, with the
requirements of the Act (or, where appropriate, the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) and to the applicable
rules and regulations of the Commission under each such statutes.
- 5 -
5. The statements under "Description of Preferred Securities",
"Description of Guarantees", "Description of Junior Subordinated
Debentures", "Description of Corresponding Junior Subordinated
Debentures", "Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debentures and the Guarantees" and
"Plan of Distribution" in the Prospectus, insofar as such statements
constitute summaries of legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings, and fairly
summarize the matters referred to therein in all material respects.
6. The order of the Commission, dated [____________], [____],
in File No. 70-[_________], under the Public Utility Holding Company
Act of 1935, as amended, relating to the offer and sale by CPL Capital
of the Preferred Securities, the sale by the Company of the Junior
Subordinated Debentures and the issuance by the Company of the
Guarantee (being the order of the Commission referred to in paragraph
(s) of Section 2 of the Underwriting Agreement) has been duly entered
by the Commission and, to our knowledge, remains in full force and
effect. No further authorization, approval, consent or order of any
Federal governmental body or regulatory authority is required for the
authorization of the issuance or sale of the Junior Subordinated
Debentures and Preferred Securities and the undertaking of the Company
of the Guarantee in conformity with the order by the Company pursuant
to the terms of the Underwriting Agreement, except for (i) the
registration under the Act of the Preferred Securities, the Guarantee
and the Junior Subordinated Debentures and (ii) the qualification of
the Indenture, Trust Agreement and Guarantee Agreement under the Trust
Indenture Act of 1939, as amended.
7. The Guarantee Agreement has been duly and validly authorized
by all necessary corporate action of the Company and has been duly and
validly executed and delivered by the Company, and the Guarantee
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except (a) as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general
applicability affecting the enforceability of creditors' rights and
(b) that 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
- 6 -
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.
8. The Indenture, the Trust Agreement and the Expense
Agreement have been duly and validly authorized by all necessary
corporate action of the Company, have been duly and validly executed
and delivered by the Company, and are valid and binding obligations of
the Company enforceable against the Company in accordance with their
terms, except (a) as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws of general
applicability affecting the enforceability of creditors' rights and (b)
that 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.
9. Each of the Indenture, the Trust Agreement and the
Guarantee Agreement have been duly qualified under the Trust
Indenture Act of 1939, as amended.
10. The issue and sale of the Junior Subordinated Debentures by
the Company as contemplated by the Underwriting Agreement have been
duly authorized by all necessary corporate action. The Junior
Subordinated Debentures, when duly executed, authenticated and
delivered to CPL Capital, against payment to the Company of the agreed
consideration therefor, will be (subject to the qualifications stated
in paragraph 8 above) valid and binding obligations of the Company and
are entitled to the benefits afforded by the Indenture in accordance
with the terms of the Indenture and the Junior Subordinated Debentures.
11. To our knowledge, there are no legal or governmental
proceedings pending or threatened to which the Company is a party which
are required to be disclosed in the Prospectus, other than those
disclosed therein; and, to our knowledge, there are no contracts or
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described therein or filed
therewith.
- 7 -
12. Neither CPL Capital nor the Company is an "investment
company" nor an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended.
The Registration Statement was filed on Form S-3 under the 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 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 and the
Incorporated Documents, considered as a whole on the effective date of the
Registration Statement, 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, or that the
Prospectus and the Incorporated Documents, considered as a whole on the date
hereof,
- 8 -
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. Except as set forth in paragraphs 3
and 4 above, 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 opinions hereinabove expressed, we have
relied, with your permission, subject to the assumptions, qualifications or
limitations therein, upon the opinion of Vinson & Elkins, special Texas counsel
to the Company as to all matters of Texas law, and upon the opinion of Richards,
Layton & Finger, P.A., special Delaware counsel to the Company and CPL Capital,
to the extent that Delaware law other than the General Corporation Law of the
State of Delaware, including Delaware trust law, is concerned, furnished
pursuant to paragraphs (c) and (e), respectively, of Section 7 of the Agreement.
- 9 -
We are members of the bar of the State of New York and we do not express
any opinion as to matters governed by any laws other than the laws of the State
of New York, the General Corporation Law of the State of Delaware and the
Federal laws of the United States of America, and, with your consent as set
forth above, and solely in reliance upon opinion of special counsel to the
Company and CPL Capital, the laws of the State of Delaware (other than the
General Corporation Law) and Texas.
Very truly yours,
RBW/DBB/JMH
ANNEX II(d)
Form of Vinson & Elkins L.L.P.
Opinion Letter
(214) 220-7716
(214) 220-7700
___________ __, 1997
Goldman, Sachs & Co.
[Names of Co-Representatives]
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We have acted as special Texas counsel to Central Power and Light
Company, a Texas corporation (the "Company"), in connection with the proposed
public offering by the Company from time to time of up to $150 million aggregate
principal amount of the Company's Junior Subordinated Debentures (the
"Subordinated Debentures") to be issued in one or more series pursuant to an
indenture between the Company and The Bank of New York, as Trustee (the
"Indenture"), and the proposed issuance and sale by CPL Capital I and CPL
Capital II, each a business trust created under the laws of the State of
Delaware (collectively, the "Issuer Trusts"), from time to time in one or more
series, not to exceed $150 million, of their preferred securities, representing
preferred undivided beneficial interests in the assets of such Issuer Trusts
(the "Preferred Securities") This opinion is being furnished to you pursuant to
Paragraph 7(e) of the Underwriting Agreement dated , 1997, between CPL Capital
I, the Company and Goldman, Sachs & Co. and , as Representatives of the several
Underwriters. Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to them in the Underwriting Agreement.
We have examined originals or certified copies 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 that we considered necessary and proper in
order to render the opinions hereinafter expressed. In our examination we have
assumed the genuineness of all signatures, the accuracy and completeness of all
documents submitted to us, the authenticity of all documents submitted to us as
originals and the conformity to original documents of all documents submitted to
us as certified or photostatic copies. As to factual matters material to the
opinions herein stated, we have relied to the extent we deem such reliance
proper upon certificates given or representations made by public officials and
duly authorized representatives of the Company.
Goldman, Sachs & Co., et. al.
, 1997
Page 2
Based upon the foregoing, and subject to the qualifications hereinafter
set forth, we are of the opinion that:
1. The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Texas. The Company
has the corporate power and authority to own its property and conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the financial condition,
result of operations or business of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect").
2. The Company is a public utility (as defined in the Public
Utility Regulatory Act ("PURA") of the State of Texas), duly authorized by its
Restated Articles of Incorporation, filed with the Secretary of State of the
State of Texas on January 30, 1990, as amended through the date hereof, to
conduct the business of generating and supplying gas, electric light and motor
power to the public. The Company is authorized under the laws of the State of
Texas to operate as an electric utility (as defined in PURA) in the areas of the
State of Texas in which it currently does so, except where the failure to be so
authorized would not have a Material Adverse Effect.
3. The Company has valid and subsisting municipal franchises,
licenses or permits authorizing it to operate as an electric utility in all of
the municipalities listed on Exhibit A hereto (which municipalities the Company
has certified to us are all the municipalities served by it from which the
Company derives a material amount of electric operating revenues) wherein such a
franchise, license or permit is required.
4. Except as set forth in the Prospectus, including documents
incorporated by reference therein, to our knowledge, there is no litigation or
other legal proceeding pending or threatened in the State of Texas to which the
Company is a party or to which property of the Company is subject that might
reasonably be expected to result in a Material Adverse Effect.
5. No approval, authorization, consent, certificate or order of
any state governmental body or regulatory authority of the State of Texas is
necessary in connection with the issuance and sale of the Securities or the
issuance of the Subordinated Debentures and the Guarantee as contemplated by the
Underwriting Agreement and the Prospectus, except as may be required by the
"blue sky" or securities laws or regulations of the State of Texas.
6. Each of the Underwriting Agreement and the Pricing Agreement
has been duly authorized, executed and delivered by the Company.
7. Each of the Guarantee Agreement, the Trust Agreement, the
Indenture and the Expense Agreement (together the "Guarantor Agreements") has
been duly authorized, executed and
Goldman, Sachs & Co., et. al.
, 1997
Page 3
delivered by the Company and the Guarantee has been duly authorized and, when
issued and delivered pursuant to the Underwriting Agreement, will have been duly
executed, issued and delivered.
8. The Subordinated Debentures have been duly authorized,
executed and delivered by the Company.
9. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting Agreement,
the Pricing Agreement and each of the Guarantor Agreements and the issuance by
the Company of the Guarantee and the Subordinated Debentures will not result in
a breach of any provision of the Restated Articles of Incorporation or bylaws of
the Company or, to our knowledge, any agreement or instrument to which the
Company is a party that is material to the Company or, to our knowledge, result
in a violation of any provision of applicable law of the State of Texas
(provided that no opinion is expressed with respect to the indemnification
provision in the Underwriting Agreement insofar as public policy considerations
may affect the performance thereof) or any judgment, decree or order applicable
to the Company of any governmental body or agency of the State of Texas or any
court having jurisdiction over the Company in the State of Texas.
With respect to the opinions contained in paragraph 1. above regarding
the valid existence of the Company, we have relied solely upon (i) certificates
provided by officials of the State of Texas or (ii) telegraphic or oral
confirmation therefrom where such certificates were unavailable as of the date
hereof.
With respect to the opinions contained in paragraph 3. above, we have
relied solely upon certificates of officers of the Company and searches as of
recent dates of our files, the Company's records and court records of the
following courts: The state district courts for Dallas County, Travis County,
Matagorda County and Nueces County, Texas; and the federal district courts for
the Southern District (Corpus Christi and Galveston Divisions) of Texas and the
Northern District (Dallas Division) of Texas.
With respect to the opinions contained in paragraph 9. above, we have
relied solely upon certificates of officers of the Company as to which
agreements and instruments are material to the Company.
We are licensed to practice law in the State of Texas and do not hold
ourselves out to be experts on the laws of any jurisdiction other than the State
of Texas. We express no opinion with regard to any matter which may be governed
by the laws of any state or other jurisdiction (including the United States of
America) other than the State of Texas.
This opinion is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters herein expressly stated.
Goldman, Sachs & Co., et. al.
, 1997
Page 4
Except as provided otherwise in a written consent signed by us, the
opinions expressed herein are for the sole benefit of, and may only be relied
upon by, you, your counsel and Milbank, Tweed, Hadley & McCloy, special counsel
for the Company, and the opinions herein expressed are not to be used,
circulated, quoted or otherwise referred to in any manner other than as
specifically provided in the Underwriting Agreement, or by or to any other
person.
Very truly yours,
EXHIBIT A
MUNICIPALITIES
Alice
Bay City
Beeville
Corpus Christi
Del Rio
Eagle Pass
Edinburg
Harlingen
Ingleside
Kingsville
Laredo
McAllen
Mission
Pharr
Rockport
Uvalde
Victoria
Weslaco
Annex II(e)
Form of Christy & Viener Opinion
to be delivered pursuant to section 7(f)
Goldman, Sachs & Co.
[Names of Co-Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We have acted as special tax counsel to Central Power and
Light Company, a Texas corporation (the "Company) and CPL Capital I, a Delaware
statutory business trust (the "Trust") in connection with the offering by the
Trust of its Cumulative Quarterly Income Preferred Securities, Series A (the
"Series A Preferred Securities"), as described in the Registration Statement on
Form S-3 (the "Registration Statement"), filed by the Company, the Trust, and
CPL Capital II, a Delaware statutory business trust, with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended. The
Registration Statement includes the Prospectus and the Prospectus Supplement
dated as of [ , 1997] (collectively, the "Prospectuses"), relating to such
offering. Capitalized terms not defined herein have the meanings specified in
the Prospectuses.
In rendering the opinions expressed below, we have examined
the Prospectuses and such other documents as we have deemed relevant and
necessary, including, without limitation, the Amended and Restated Trust
Agreement, the Indenture, the Supplemental Indenture, and the Guarantee
Agreement relating to the Series A Preferred Securities each dated as of [ ,
1997]. Such opinions are conditioned, among other things, upon the accuracy and
completeness of the facts, information and representations contained in the
Prospectuses as of the date hereof. We have not undertaken any independent
investigation of any factual matters set forth in the Prospectuses or such other
documents. We have assumed that the transactions contemplated by the
Prospectuses and such other documents will occur as provided therein. We have
also assumed that the Series A Preferred Securities, when issued, will be rated
not less than [ ] by Standard & Poor's Rating Services and [ ]by Moody's
Investors Service, Inc.
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
original documents of all copies submitted to us for our examination. We have
also assumed that all obligations imposed by such documents on the parties
thereto are or will be enforceable, and have been or will be performed or
satisfied in accordance with their terms. In addition, we have relied, with your
consent, on the opinion of Richards, Layton & Finger with respect to the
validity of the Series A Preferred Securities, the enforceability of the Amended
and Restated Trust Agreement, and the formation of the Trust and on the opinion
of Milbank, Tweed, Hadley & McCloy with respect to the validity of the Series A
Debentures and the Series A Guarantee.
In rendering the opinions expressed below, we have considered
the applicable provisions of the Internal Revenue Code of 1986, as amended the
(the "Code"), regulations promulgated thereunder by the United States Treasury
Department (the "Regulations"), pertinent judicial authorities, rulings of the
Internal Revenue Service, and such other authorities as we have considered
relevant. It should be noted that the Code, the Regulations, and such judicial
decisions, administrative interpretations and other authorities are subject to
change at any time and, in some circumstances, with retroactive effect, and any
such change could affect the opinions stated herein.
Based upon and subject to the foregoing, we are of the opinion
that:
(i) under current law, for United States federal income tax
purposes (A) the Series A Debentures will constitute indebtedness of the Company
and (B) the interest on the Series A Debentures will be deductible by the
Company in accordance with section 163 of the Code and the Regulations
promulgated thereunder, subject to any applicable limitations on the Company's
ability to deduct interest on any of its indebtedness;
(ii) under current law, the Trust will be classified for
United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation; accordingly, for United States federal
income tax purposes, each beneficial owner of Series A Preferred Securities
generally will be considered the owner of an undivided beneficial interest in
the Series A Debentures, and will be required to include in its gross income its
allocable share of any interest and original issue discount paid or accrued with
respect to the Series A Debentures; and
(iii) the discussion set forth in the Prospectus Supplement
under the caption "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" is a fair and
accurate summary of the matters addressed therein, based upon current law and
the assumptions stated or referred to therein.
We assume no obligation to update or supplement this letter to
reflect any facts or circumstances which may hereafter come to our attention
with respect to the opinions expressed above, including any changes in
applicable law which may hereafter occur.
Very truly yours,
ANNEX III
Form of letter of Arthur Andersen LLP
to be delivered pursuant to Section 7(e)
Pursuant to Section 7(e) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Guarantor and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined
by them and included or incorporated by reference in the Prospectus or
the Registration Statement comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder, and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Guarantor for the periods specified in
such letter, as indicated in their reports thereon, copies of which
have been separately furnished to the representatives of the
Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or the Guarantor's quarterly reports on
Form 10-Q incorporated by reference into the Prospectus as indicated
in their reports thereon copies of which have been separately
furnished to the Representatives; and on the basis of specified
procedures including inquiries of officials of the Guarantor who have
responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to
in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Guarantor for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Guarantor's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Guarantor's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of
Items 301, 302, 402 and 503(d) respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
interim financial statements of the Guarantor and its subsidiaries,
inspection of the minute books of the Guarantor and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Guarantor and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or
included or incorporated by reference in the Guarantor's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be
made to the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus or
included in the Guarantor's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus, for them to be
in conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the
Guarantor's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in
clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred
to in clause (B) were not determined on a basis
substantially consistent with the basis for the audited
financial statements included or incorporated by reference
in the Guarantor's Annual Report on Form 10-K for the most
recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and
the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which
were outstanding on the date of the latest financial
statements included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term
debt of the Guarantor and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity
or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenue or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period in the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraphs (iii) and (vi) above, they
have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Guarantor and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference), or
in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Guarantor and its subsidiaries and have found them to be in
agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including The documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement and to the Prospectus as amended
or supplemented (including all documents incorporated by reference
therein) for the purposes of the letter delivered either (i) on the
effective date of any post-effective amendment to the Registration Statement
or Rule 462(b) Registration Statement filed subsequent to the date of the
Underwriting Agreement or (ii) at the Time of Delivery, as the case may be.
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*QUIPS is a service mark of Goldman, Sachs & Co.