EXHIBIT 1
EXHIBIT 1
PUBLIC SERVICE COMPANY OF OKLAHOMA
SENIOR NOTES
UNDERWRITING AGREEMENT
__________ ____, 199__
Public Service Company of Oklahoma
212 East Sixth Street
Tulsa, Oklahoma 74119
Dear Sirs:
We (the "Managers") understand that Public Service Company of Oklahoma,
an Oklahoma corporation (the "Company"), proposes to issue and sell
$__________ aggregate principal amount of its ____% Senior Notes, due
_______________ (the "Offered Securities"). Subject to the terms and
conditions set forth herein or incorporated by reference herein, the Company
hereby agrees to sell and the underwriter or underwriters named in Schedule I
hereto (such underwriter or underwriters being herein called the
"Underwriters") agree to purchase, severally and not jointly, the principal
amounts of such Offered Securities set forth opposite their names in Schedule
I hereto at ______% of their principal amount plus accrued interest, if any,
from __________ ____, 199__ to the date of payment and delivery.
The Underwriters will pay for such Offered Securities at the offices of
Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, New York
10005 at 10:00 a.m., New York Time, on __________ ____, 199__, or at such
other place and time, not later than __________ ____, 199__, as shall be
mutually agreed. The Offered Securities shall be concurrently delivered to
the Underwriters at the offices of _________________________________________.
The Offered Securities shall have the following terms:
Maturity: __________ __, ______
--------
Interest Rate: ________%
-------------
Mandatory and Optional
Sinking Fund Provisions: As described in the Prospectus and
----------------------- applicable Prospectus Supplement
for the Offered Securities
Optional Redemption Provisions: As described in the Prospectus and
------------------------------ applicable Prospectus Supplement
for the Offered Securities
Interest Payment Dates: __________ ____ and
----------------------- __________ ____, commencing
__________ ____, 199__
Address for Notices
to Managers under
Underwriting Agreement:
----------------------
Payment Method:
--------------
All the provisions contained in the document entitled Public Service
Company of Oklahoma Underwriting Agreement Standard Provisions (Senior Notes-
Shelf) dated __________ ____, 199__, a copy of which you and we have
previously received, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Underwriting Agreement to the same
extent as if such provisions had been set forth in full herein. References
herein and therein to numbered sections of the Underwriting Agreement shall
mean the numbered sections of such Standard Provisions.
Please confirm your agreement by having an authorized officer sign a
copy of this Underwriting Agreement in the space set forth below and returning
the signed copy to us. This Underwriting Agreement may be signed in any
number of counterparts with the same effect as if the signature thereto and
hereto were upon the same instrument. It is understood that our acceptance of
this agreement on behalf of each of the Underwriters is or will be pursuant to
the authority set forth in a form of Agreement Among Underwriters, the form of
which shall be submitted to the Company for examination, upon request.
Very truly yours,
By:______________________________
Title:___________________________
(Acting severally on behalf of
themselves and the several
Underwriters named in Schedule I
hereto)
Accepted:
PUBLIC SERVICE COMPANY OF OKLAHOMA
By:_______________________________
Name:
Title:
Schedule I
----------
Principal
Amount of
Underwriters Offered
Securities
------------ ---------
$
-----------
Total $
PUBLIC SERVICE COMPANY OF OKLAHOMA
UNDERWRITING AGREEMENT
STANDARD PROVISIONS (SENIOR NOTES-SHELF)
Dated __________ ____, 199__
From time to time Public Service Company of Oklahoma, an Oklahoma
corporation (the "Company"), may enter into one or more underwriting
agreements that provide for the sale of designated securities to the
several underwriters named therein. The standard provisions set forth
herein may be incorporated by reference in any such underwriting agreement
and any such underwriting agreement, including the provisions incorporated
therein by reference, is herein referred to as the "Underwriting
Agreement".
The Company proposes to issue the series of Senior Notes specified
in the Underwriting Agreement (the "Offered Securities") pursuant to the
provisions of its Indenture dated __________ ____, 1996, as supplemented
and as the same may from time to time be amended or supplemented (the
"Indenture"), to Liberty Bank and Trust Company of Tulsa, National
Association, as Trustee (the "Trustee"). The Offered Securities will have
the terms and rights, including the maturity, rate and times of payment of
interest, selling price and redemption terms, as set forth in the
Underwriting Agreement and Prospectus (as hereinafter defined). The
Underwriting Agreement shall be in the form of an executed writing (which
may be in counterparts) and may be evidenced by facsimile or any other
electronic transmission designed to produce a written record of
communications transmitted. Until the Release Date (as defined in the
Indenture), the Offered Securities will be secured as to payment of
principal and interest by one or more series of First Mortgage Bonds (the
"First Mortgage Bonds") issued, pledged and delivered by the Company to
the Trustee.
1. Representations and Warranties of the Company.
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File
No. 333-_________), including a prospectus, relating to the Offered
Securities, and the offering thereof from time to time in accordance with
Rule 415 under the Securities Act of 1933, as amended (the "Securities
Act") and such registration statement has become effective. The Company
has prepared or will promptly prepare for filing with, or transmission for
filing to, the Commission, pursuant to Rule 424 under the Securities Act,
a Prospectus Supplement (the "Supplement") for the purpose of supplying
information in respect of the public offering of the Offered Securities,
the names of the underwriter or group of underwriters and other matters.
Said registration statement, as amended at the time it became effective,
including the information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Securities Act, and the
prospectus, as supplemented by the Supplement, relating to the Offered
Securities in final form as filed with the Commission pursuant to Rule 424
under the Securities Act, are hereinafter called the "Registration
Statement" and the "Prospectus", respectively. The term "Basic
Prospectus" means the prospectus included in the Registration Statement.
The term "preliminary prospectus" means a preliminary prospectus
supplement, if any, relating to the Offered Securities together with the
Basic Prospectus. Whenever the word "Registration Statement",
"registration statement", "Prospectus", "preliminary prospectus" or
"prospectus" is used herein it shall be deemed to include all documents
incorporated therein by reference pursuant to the requirements of Form S-3
under the Securities Act (the "Incorporated Documents").
(b) Except as otherwise contemplated herein, no approval,
authorization, consent, certificate or order of the Commission under the
Public Utility Holding Company Act of 1935, as amended (the "Holding
Company Act") or any State commission or regulatory authority other than
the Corporation Commission of the State of Oklahoma (the "Oklahoma
Commission") is necessary with respect to the issuance or the sale of the
Offered Securities and the First Mortgage Bonds by the Company. The
Oklahoma Commission has entered an order authorizing or approving the
issue and sale of the Offered Securities and the First Mortgage Bonds by
the Company on terms consistent with the Underwriting Agreement. A copy
of such order heretofore entered by the Oklahoma Commission has been or
will be delivered to the Underwriters.
(c) The Basic Prospectus relating to the Offered Securities as
originally filed, or as a part of any amendment thereto, any preliminary
prospectus at the time of its issuance, and the Registration Statement and
the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus as of their effective or issue dates, and as
of the Closing Date (as hereinafter defined), complied or will comply, in
each case in all material respects, with the provisions of the Securities
Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission under said Acts,
and neither the Registration Statement nor any amendment thereto contains
or will contain an untrue statement of a material fact or omits or will
omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading and the Basic
Prospectus, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto does not include and will not include an untrue
statement of a material fact and does not omit and will not omit to state
a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were
made not misleading; provided that the foregoing representations and
warranties in this subsection (c) shall not apply to omissions from the
Registration Statement or Prospectus resulting from the failure of any of
the Underwriters to furnish the Company with the information pertaining to
such Underwriters and the underwriting of the Offered Securities required
to complete the Registration Statement or the Prospectus, to statements in
the Form T-1 filed by the Trustee and First Mortgage Trustee (as
hereinafter defined) as exhibits to the Registration Statement or to
statements in or omissions from the Prospectus made in reliance upon and
in conformity with information furnished in writing to the Company by any
of the Underwriters for use in connection with the preparation of the
Prospectus. The Incorporated Documents that were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), complied
at their respective times of filing, and any documents deemed to be
incorporated in the Registration Statement and Prospectus at all times
during which a prospectus is required to be delivered under the Securities
Act will comply at their respective times of filing, with the provisions
of the Exchange Act and the rules and regulations of the Commission
thereunder.
(d) Except as the Company may have furnished supplemental
information to each prospective Underwriter or to the Managers prior to
the receipt of proposals to purchase the Offered Securities as to matters
to be reflected in the Prospectus, since the respective dates as of which
information is given in the Registration Statement and in the Prospectus,
there has been no (A) material adverse change in the condition, financial
or otherwise, or in the earnings of the Company, or (B) adverse
development concerning the Company's business or assets which would result
in a material adverse change in its prospective financial condition or
results of operations, except such changes as are set forth or
contemplated in such Registration Statement (including the financial
statements and notes thereto included or incorporated by reference in the
Registration Statement) or the Prospectus.
(e) The First Mortgage Indenture (as defined herein) adequately
describes all or substantially all the permanent fixed properties now
owned by the Company, except certain property excepted from the lien of
the First Mortgage Indenture and property of the character expressly
excluded from such lien by the terms of the First Mortgage Indenture, and
except any property constructed or acquired by the Company subsequent to
the date of execution of the Supplemental Indenture creating and providing
for the issuance of the First Mortgage Bonds.
(f) At or prior to the acceptance by the Company of a proposal for
the purchase of the Offered Securities, the Company will have taken all
corporate action necessary to be taken by it to authorize the acceptance
of such proposal and, at or before the Closing Date, will have taken all
corporate action necessary to be taken by it to authorize the performance
by it of all obligations on its part to be performed under the
Underwriting Agreement; and the consummation of the transactions
contemplated in, and the fulfillment of the terms of, the Underwriting
Agreement will not result in a breach of any of the terms and provisions
of, or constitute a default under, any indenture, mortgage, deed of trust
or other agreement or instrument to which the Company is a party at the
Closing Date, or the Restated Articles of Incorporation of the Company, as
amended, or any order, rule or regulation applicable to the Company of any
court or of any state or Federal regulatory body or administrative agency
having jurisdiction over the Company or over its property.
(g) Arthur Andersen LLP are independent accountants with respect to
the Company as required by the Securities Act and the applicable rules and
regulations thereunder.
2. Purchase, Sale and Delivery of Offered Securities.
The Company is advised by the Managers that the Underwriters propose
to make a public offering of their respective portions of the Offered
Securities as soon after the Underwriting Agreement is entered into as in
the Managers' judgment is advisable. The terms of the public offering of
the Offered Securities are or will be set forth in the Prospectus.
Payment for the Offered Securities shall be made by certified or
official bank check or checks payable to the Company or its order in
immediately available Federal funds (unless the Underwriting Agreement
shall otherwise specify) at the time and place set forth in the
Underwriting Agreement upon delivery to the Managers for the respective
accounts of the several Underwriters of the Offered Securities registered
in such names and in such denominations as the Managers shall request in
writing not less than two full business days prior to the date of
delivery. The Company agrees to have the Offered Securities available for
inspection, checking and packaging by the Managers at the location
indicated in the Underwriting Agreement not later than 1:00 P.M. on the
business day next prior to the Closing Date. The time and date of such
payment and delivery with respect to the Offered Securities are herein
referred to as the "Closing Date".
At the closing, by virtue of certain provisions of the Oklahoma
statutes, the several Underwriters shall be required to pay the real
estate mortgage tax (0.10% of the principal amount of any Offered
Securities) payable in connection with the issuance of the Offered
Securities.
3. Covenants of the Company.
The Company covenants and agrees with each of the Underwriters that:
(a) As soon as practicable after the acceptance of a proposal to
purchase the Offered Securities, the Company will file the Supplement with
the Commission pursuant to Rule 424(b) of the Securities Act. The Company
will not file at any time prior to the Closing Date any other amendment to
the Registration Statement or any supplement to the Prospectus, or any
other amended prospectus or any document that upon the filing thereof
would become an Incorporated Document of which Sidley & Austin
("Underwriters' Counsel") shall not previously have been advised and
furnished with a copy or to which the Managers shall reasonably object in
writing.
(b) The Company will advise the Managers immediately, and confirm
such advice promptly in writing, of the effectiveness of any amendment to
the Registration Statement.
(c) The Company will notify promptly each of the Underwriters in
the event of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or in the event of the
institution or notice of intended institution by the Commission of any
action or proceeding for that purpose. In the event the Commission shall
enter a stop order suspending the effectiveness of the Registration
Statement, whether before or after the Offered Securities have been
delivered to the Managers or the Underwriters and paid for as provided in
the Underwriting Agreement, the Company will make every reasonable effort
to obtain, as promptly as possible, the entry by the Commission of an
order setting aside any such stop order or otherwise reinstating the
effectiveness of the Registration Statement.
(d) The Company will deliver to the Managers, on or before the
Closing Date, one signed copy of the registration statement as originally
filed and of each amendment thereto (in each case including all exhibits
thereto, other than exhibits incorporated by reference), and will also
deliver to the Managers, for distribution to the Underwriters, a
sufficient number of conformed copies of each of the foregoing (but
without exhibits) so that one copy of each may be distributed to each of
the Underwriters. The Company will also send to the Managers or to the
Underwriters, without expense to them, as soon as practicable after the
date hereof, and thereafter from time to time during a period of nine
months after such date, as many copies of any preliminary prospectus and
the Prospectus as the Managers may reasonably request for the purposes
contemplated by the Securities Act.
(e) The Company will use its best efforts, when and as requested by
the Managers, to furnish information and otherwise cooperate in qualifying
or registering the Offered Securities and the First Mortgage Bonds for
offer and sale under the securities or "blue sky" laws of such
jurisdictions as the Managers may designate, but the Company shall not
thereby be obligated to qualify as a foreign corporation or subject itself
to taxation in, or to execute or file any general consent to service of
process under the laws of, any jurisdiction. The Company will pay the
Underwriters' Counsel all reasonable fees (including counsel fees) and
expenses incurred by them in connection with such qualification or
registration of the Offered Securities and the First Mortgage Bonds for
offer or sale, not exceeding, however, $5,000 in the aggregate.
(f) If the Underwriting Agreement shall be terminated pursuant to
the provisions of Section 4, the Company will pay the reasonable fees and
disbursements of Underwriters' Counsel in connection with the contemplated
issue and sale of the Offered Securities and the First Mortgage Bonds,
unless such termination is caused by any default by the Managers or any of
the Underwriters in the performance of their respective obligations
hereunder. Except as provided in this subsection (f), the Underwriters
shall pay the fees of Underwriters' Counsel and reimburse such counsel for
their reasonable expenses paid or incurred in connection with the issue
and sale of the Offered Securities and the First Mortgage Bonds. The
Company shall not in any event be liable to any of the Underwriters for
damages on account of loss of anticipated profits.
(g) The Company will, so long as any of the Offered Securities
shall be outstanding, deliver to the Managers upon their request, and to
each other Underwriter who may so request, copies of all public reports
and all reports and financial statements furnished by the Company to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder.
(h) During a period of nine months after the date of the
Prospectus, if any event relating to or affecting the Company or its
subsidiaries, if any, or of which the Company shall be advised in writing
by the Managers, shall occur as a result of which it is necessary, in the
opinion of counsel for the Company, to supplement or amend the Prospectus
in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser of
Offered Securities from any of the Underwriters, the Company will
forthwith at its expense prepare and furnish to the Managers or to the
Underwriters a reasonable number of copies of a supplement or supplements
or an amendment or amendments to the Prospectus (in form satisfactory to
Underwriters' Counsel) which will supplement or amend the Prospectus so
that, as so supplemented or amended, it will not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus is
delivered to such a purchaser, not misleading. In case any of the
Underwriters is required to deliver a prospectus descriptive of the
Offered Securities after the expiration of nine months after the date of
the Prospectus, the Company, upon the request of the Managers, will
furnish to the Managers, at the expense of such Underwriter, a reasonable
quantity of amendments or supplements to the Prospectus complying with
Section 10 of the Securities Act. For the purpose of this subsection (h),
the Company will furnish such information with respect to itself and its
subsidiaries, if any, as the Managers may from time to time reasonably
request, and during said nine-month period, the Company will prepare and
continue to file with the Commission all documents required to be filed
under the Exchange Act.
(i) The Company will make generally available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) covering a period of at least twelve months beginning not earlier
than the date of the Prospectus, which earnings statement shall satisfy
the requirements of Section 11(a) of the Securities Act.
4. Conditions of Underwriters' Obligations.
The obligations of the Underwriters to purchase and pay for the
Offered Securities shall be subject to the performance by the Company of
its obligations to be performed under the Underwriting Agreement at or
prior to the Closing Date, to the continued accuracy in all material
respects of the representations and warranties of the Company contained in
the Underwriting Agreement, and to the following conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing and in accordance with Section 1(a) of this Agreement; no stop
order suspending the effectiveness of the Registration Statement shall
have been issued under the Securities Act, or proceedings therefor
instituted or threatened by the Commission, on or prior to the Closing
Date.
(b) The Company shall have delivered to the Trustee, as security
for the payment of the principal and interest on the Offered Securities, a
series of First Mortgage Bonds in the same aggregate principal amount and
with the same stated rate or maturity dates and redemption provisions as
the Offered Securities they secure as described in Prospectus. The First
Mortgage Bonds will be issued by the Company under its Indenture dated
July 1, 1945 between the Company and Liberty Bank and Trust Company of
Tulsa, National Association, as heretofore amended and supplemented and as
to be further amended and supplemented by a Supplemental Indenture or
Supplement Indentures creating the series in which the First Mortgage
Bonds are to be issued. The term "First Mortgage Indenture," as
hereinafter used, means such Indenture dated July 1, 1945, as so amended
and supplemented.
(c) At or prior to the Closing Date, the Underwriters shall have
received from Underwriters' Counsel an opinion (subject to the reservation
that they have relied upon the opinion of Doerner, Saunders, Daniel &
Anderson, Tulsa, Oklahoma, and upon the opinion of Wagstaff, Alvis,
Stubbeman, Seamster & Longacre, L.P.P., Abilene, Texas, each counsel for
the Company, as to all matters governed by Oklahoma and Texas law,
respectively), to the effect that:
(i) the Company has been duly incorporated and is a validly
existing corporation under the laws of the State of Oklahoma;
(ii) each of the Indenture and the First Mortgage Indenture
has been duly and validly authorized by the necessary corporate
action by the Company, has been duly and validly executed and
delivered by the Company, and is a valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, subject, as to enforcement, (x) to the fact that certain of
the remedial provisions of the First Mortgage Indenture may be
limited or rendered unenforceable by the laws of the States wherein
the mortgaged property is situated (but said laws do not, in the
opinion of such counsel, make the remedies afforded by the First
Mortgage Indenture inadequate for the realization of the benefits of
the security provided thereby), and (y) to bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally; to the
effects of the provisions of the Bankruptcy Reform Act of 1978, as
amended, on the validity of the lien of the First Mortgage Indenture
with respect to the property acquired or proceeds realized by the
Company after the commencement of bankruptcy proceedings with
respect to the company; and to the effects of general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law);
(iii) the issue and sale of the Offered Securities and the
First Mortgage Bonds by the Company in accordance with the terms of
the Underwriting Agreement have been duly and validly authorized by
the Company. The Offered Securities and First Mortgage Bonds, when
duly executed, authenticated and delivered to and paid for by the
Managers or the Underwriters in the case of the Offered Securities,
and to the First Mortgage Trustee in the case of the First Mortgage
Bonds, in accordance with the terms of the Underwriting Agreement,
will be valid and binding obligations of the Company, secured, in
the case of the First Mortgage Bonds, by the lien of and entitled to
the benefits of the First Mortgage Indenture, subject, as to
enforcement, (i) to the fact that certain of the remedial provisions
of the First Mortgage Indenture may be limited or rendered
unenforceable by the laws of the States wherein the mortgaged
property is situated (but said laws do not, in the opinion of such
counsel, make the remedies afforded by the First Mortgage Indenture
inadequate for the realization of the benefits of the security
provided thereby), and (ii) to bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally; to the
effects of the provisions of the Bankruptcy Reform Act of 1978, as
amended on the validity of the lien of the First Mortgage Indenture
with respect to the property acquired or proceeds realized by the
Company after the commencement of bankruptcy proceedings with
respect to the Company; and to the effects of general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law);
(iv) the Offered Securities and the Indenture and the First
Mortgage Bonds and First Mortgage Indenture, conform as to legal
matters, in all material respects, with the statements concerning
them made in the Prospectus under the caption "Description of the
Senior Notes" and "Description of Senior Note Mortgage Bonds" and in
the Prospectus Supplement under the caption "Supplemental
Description of the Senior Notes" and "Supplemental Description of
Senior Note Mortgage Bonds" and such statements accurately set
forth, in all material respects, the matters respecting the Offered
Securities, the Indenture, the First Mortgage Bonds and First
Morgage Indenture, which are required to be set forth in the
Prospectus, as supplemented by the Prospectus Supplement, by the
Securities Act and the Trust Indenture Act and the rules and
regulations under said Acts (other than the accounting provisions
thereof, with respect to the requirements of which such counsel need
express no opinion or belief); and each of the Indenture and the
First Mortgage Indenture has been qualified under the Trust
Indenture Act;
(v) the order of the Oklahoma Commission referred to in
subsection (b) of Section 1 of the Underwriting Agreement has been
duly entered and, to the best of the knowledge of said counsel, is
in full force and effect;
(vi) the Company is exempt in accordance with Rule 52 under the
Public Utility Holding Company Act of 1935, as amended, from the
requirement for an order of the Commission under said Act with
respect to the issue and sale of the Offered Securities and the
First Mortgage Bonds.
(vii) Except as set forth in paragraph (v) above and except
for the order of the Commission entered into with respect to the
Registration Statement as contemplated in paragraph (viii) below, no
approval, authorization, consent, certificate or order of any
Federal commission or regulatory authority is necessary with respect
to the execution and delivery of the Indenture and the First
Mortgage Indenture or the issue and sale of the Offered Securities
and the First Mortgage Bonds by the Company as contemplated in the
Underwriting Agreement;
(viii) the Registration Statement on Form S-3 has become
effective under the Securities Act, and, to the best of the
knowledge of said counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for such purpose have been instituted or are pending or
threatened under the Securities Act;
(ix) the Registration Statement, the Prospectus and the
Prospectus Supplement, in each case excluding the Incorporated
Documents (other than financial statements, financial data,
statistical data and supporting schedules included or incorporated
by reference therein, as to which said counsel need express no
opinion or belief) as of their respective effective or issue dates
complied as to form, in all material respects, with the requirements
of the Securities Act (or, where appropriate, the Exchange Act) and
the rules and regulations of the Commission thereunder; and
(x) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
Such counsel shall also state that while, except as otherwise
required or stated in said opinion, said counsel have not
independently checked the accuracy or completeness of, or otherwise
verified, and accordingly, are not passing upon, and do not assume
any responsibility for and have not independently verified the
accuracy, completeness or fairness of the statements contained in
the Registration Statement, the Prospectus or the Prospectus
Supplement, and relying as to materiality, to a large extent, upon
the judgment of officers and representatives of the Company, nothing
has come to the attention of said counsel which would lead said
counsel to believe that the Registration Statement relating to the
Offered Securities or any amendment thereto (other than financial
statements, financial data, statistical data and supporting
schedules included or incorporated by reference therein, as to which
said counsel need express no opinion or belief), at the time it
became effective contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that
(with the foregoing exception) the Prospectus, as supplemented by
the Prospectus Supplement, as of the date of such opinion includes
any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(d) At or prior to the Closing Date, the Underwriters shall have
received from Milbank, Tweed, Hadley & McCloy, counsel for the Company, an
opinion (subject to the same reservation as that expressed in subsection
(c) of this Section 4), in form and substance satisfactory to
Underwriters' Counsel, to the same effect, in general, with respect to all
matters enumerated in subsection (c) of this Section 4.
(e) At or prior to the Closing Date, the Underwriters shall have
received from Doerner, Stuart, Saunders, Daniel & Anderson, Tulsa,
Oklahoma, Oklahoma counsel for the Company, an opinion, in form and
substance satisfactory to Underwriters' Counsel, to the same effect, in
general, with respect to the matters enumerated in subdivisions (i), (ii),
(iii), (v) and (x) of subsection (c) of this Section 4, and to the further
effect that:
(i) the Company is a validly organized and existing
corporation under the laws of the State of Oklahoma and is duly
authorized by its Restated Certificate of Incorporation to conduct
the businesses in which it is engaged as described in the Prospectus
and the Prospectus Supplement; the Company has the legal right to
function and operate as a public utility in the State of Oklahoma
supplying therein electric service; the Company generates and
supplies electric light and power to the public only in the State of
Oklahoma;
(ii) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(iii) each of the Indenture and the First Mortgage Indenture
has been duly and validly authorized by all necessary corporate
action of the Company, has been duly and validly executed and
delivered by the Company, and is a valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, subject, however, to the fact that certain of the remedial
provisions of the First Mortgage Indenture may be limited or
rendered unenforceable by the laws of the States wherein the
mortgaged property is situated (but said laws do not, in the opinion
of said counsel, make the remedies afforded by the First Mortgage
Indenture inadequate for the realization of the benefits of the
security provided thereby), and except (a) as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws of general applicability affecting the enforcement of
creditors' rights, and (b) that such enforceability may be limited
by the application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law), including
without limitation (i) the possible unavailability of specific
performance, injunctive relief or any other equitable remedies and
(ii) concepts of materiality, reasonableness, good faith and fair
dealing;
(iv) the issue and sale of the Offered Securities and the
First Mortgage Bonds by the Company in accordance with the terms of
the Underwriting Agreement have been duly and validly authorized by
all necessary corporate action; the Offered Securities, when duly
executed, authenticated and delivered to the Underwriters, against
payment to the Company of the agreed consideration therefor, and the
First Mortgage Bonds when duly executed, and authenticated and
delivered to the First Mortgage Trustee will be (subject to the
qualifications stated in paragraph (iii) above) valid and binding
obligations of the Company and, in the case of the First Mortgage
Bonds, secured by the lien of and entitled to the benefits of the
First Mortgage Indenture;
(v) the Company has good and sufficient title to all or
substantially all the permanent fixed electric utility properties
now owned by it, situated in the State of Oklahoma, including those
described or referred to in the Prospectus and the Prospectus
Supplement, except as otherwise indicated therein, subject only to
the lien of the First Mortgage Indenture and to permitted
encumbrances and liens and prepaid liens (as those terms are defined
in the Indenture) and to the junior lien on the Company's
Northeastern Station securing project bonds issued to finance the
construction of Units 3 and 4 of said Station; the First Mortgage
Indenture, subject only to permitted encumbrances and liens and
prepaid liens, constitutes a valid, direct first mortgage lien upon
all such fixed properties of the Company (with the exception of the
properties expressly excepted or excluded from such lien); all
permanent fixed property hereafter acquired by the Company and
situated in the State of Oklahoma (other than property of the
character of that expressly excepted or excluded from the lien of
the First Mortgage Indenture) will, upon such acquisition, become
subject to the lien of the First Mortgage Indenture, subject,
however, to such permitted encumbrances and liens and prepaid liens,
any liens existing or placed on such property at the time of the
acquisition thereof by the Company, and any liens thereon which
might intervene prior to the filing for record of the instrument by
which title to such property is acquired by the Company, and except
as provisions of the Bankruptcy Code may affect the validity of the
lien of the First Mortgage Indenture with respect to property
acquired, and proceeds, products, rents, issue or profits of the
property subject to such lien realized, after commencement of a case
under such Code;
(vi) the First Mortgage Indenture has been duly filed for
record as a mortgage or deed of trust of real and personal property
in the office of the Secretary of State of the State of Oklahoma and
such filing constitutes all of the action required under the laws of
the State of Oklahoma to give notice of the lien of the First
Mortgage Indenture;
(vii) the Company has valid and subsisting franchises,
licenses and permits relating to its operations in the State of
Oklahoma, authorizing the Company to carry on its present operations
in said State;
(viii) the execution and delivery by the Company of the
Supplemental Indenture relating to the Offered Securities and
issuance and sale of the Offered Securities by the Company upon
terms consistent with the Underwriting Agreement have been
authorized by an Order and Certificate of Authority of the
Corporation Commission of the State of Oklahoma, which Order has
been duly entered and, to the best of said counsel's knowledge, is
in full force and effect; no further approval, authorization,
consent, certificate or order of any state commission or regulatory
authority in Oklahoma (other than in connection or in compliance
with the securities or Blue Sky laws or regulations of the
jurisdictions in which any of the Offered Securities may have been
or are to be offered for sale or sold) is necessary with respect to
the execution and delivery of the Indenture or the issuance and sale
of the Offered Securities by the Company to you as contemplated by
the Underwriting Agreement.
(ix) except as set forth in the Prospectus or the Prospectus
Supplement, to the best of the knowledge of said counsel there is no
material litigation or other legal proceeding pending to which the
Company is a party or of which property of the Company is the
subject, and, to the best of said counsel's knowledge, no such
litigation or proceedings are contemplated; there may be excepted
various routine litigation, claims and other proceedings, which are
common or incident to the business in which the Company is engaged
but which, in the aggregate, are not significant (in the opinion of
said counsel) from the standpoint of the total assets and overall
operations of the Company; and
(x) the statements, if any, made in the Prospectus or the
Prospectus Supplement which are stated therein to have been made on
authority of said counsel, have been reviewed by said counsel and,
as to matters of law or legal conditions, are correct.
(f) At or prior to the Closing Date, the Underwriters shall have
received from Wagstaff, Alvis, Stubbeman, Seamster & Longacre, L.P.P.,
Abilene, Texas, Texas counsel for the Company, an opinion, in form and
substance satisfactory to Underwriters' Counsel, to the effect that:
(i) the Company is duly qualified to transact business as a
foreign corporation in the State of Texas;
(ii) the Company has good and sufficient title to all or
substantially all the permanent fixed electric utility properties
now owned by it situated in the State of Texas, including those
described or referred to in the Prospectus, except as otherwise
indicated therein, subject only to the lien of the First Mortgage
Indenture and to permitted encumbrances and liens and prepaid liens,
as defined in the First Mortgage Indenture; the First Mortgage
Indenture constitutes a valid, direct first mortgage lien, subject
only to permitted encumbrances and liens and prepaid liens, upon all
such fixed properties of the Company (with the exception of the
properties expressly excepted or excluded from such lien of the
First Mortgage Indenture); all permanent fixed property hereafter
acquired by the Company and situated in the State of Texas (other
than property of the character of that expressly excepted or
excluded from the lien of the First Mortgage Indenture) will, upon
such acquisition, become subject to the lien of the Indenture,
subject, however, to such permitted encumbrances and liens and
prepaid liens, any liens existing or placed on such property at the
time of the acquisition thereof by the Company, and any liens
thereon which might intervene prior to the filing for record of the
instrument by which title to such property is acquired by the
Company and except as provisions of the Bankruptcy Code may affect
the validity of the lien of the First Mortgage Indenture with
respect to property acquired, and proceeds, products, rents, issue
or profits of the property subject to such lien realized, after
commencement of a case under such Code;
(iii) the laws of the State of Texas affecting the remedies
for the enforcement of the security provided for in the First
Mortgage Indenture do not, in said counsel's opinion, make such
remedies inadequate for the realization of the benefits of such
security;
(iv) the First Mortgage Indenture has been duly recorded as a
utility security instrument in the office of the Secretary of State
of Texas and notices of utility security instruments affecting real
property have heretofore been duly filed in each of the counties in
the State of Texas in which property owned by the Company and
subject to the lien of the First Mortgage Indenture is situated, in
such manner as to make effective the lien intended to be created by
the First Mortgage Indenture; such recordation and filings
constitute all of the action required under the laws of the State of
Texas to give notice of the lien of the First Mortgage Indenture; no
recording or other taxes of the State of Texas are required by law
in connection with the issuance of the Offered Securities and the
First Mortgage Bonds or for the effectiveness of the lien of the
First Mortgage Indenture as security for the First Mortgage Bonds;
(v) as presently conducted, the Company's operations in the
State of Texas require no franchises, licenses or permits, other
than Certificates of Convenience and Necessity pertaining to its
Texas properties which have been issued by the Public Utility
Commission of Texas; and
(vi) no approval, authorization, consent, certificate or order
of any commission or regulatory authority of the State of Texas
(other than in connection or in compliance with the securities or
"blue sky" laws or regulations of the State of Texas) is necessary
with respect to the execution and delivery of the Indenture and the
First Mortgage Indenture or the issuance and sale of the Offered
Securities and the First Mortgage Bonds by the Company to the
Underwriters as contemplated by the Underwriting Agreement.
(g) At or prior to the Closing Date, the Underwriters shall have
received from Arthur Andersen LLP a letter confirming that they are
independent public accountants with respect to the Company within the
meaning of the Securities Act and the applicable published rules and
regulations thereunder and that the answer to Item 10 of the Registration
Statement is correct insofar as it relates to them and stating in effect
(1) that in their opinion the financial statements and schedules of the
Company incorporated by reference in the Registration Statement and
Prospectus and which are stated therein to have been certified or audited
by them, comply as to form, in all material respects, with the applicable
accounting requirements of the Securities Act and the published rules and
regulations thereunder; (2) that nothing has come to their attention which
causes them to believe (A) that any unaudited dollar amounts or ratios
which may appear in the Registration Statement and the Prospectus under
the caption "The Company" were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited financial
statements incorporated by reference in the Registration Statement and the
Prospectus; (B) that any unaudited condensed financial statements of the
Company included in any of the Company's Form 10-Q Quarterly Reports,
which may be incorporated by reference in the Registration Statement and
the Prospectus, do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the applicable
published rules and regulations thereunder, or that material modifications
should be made to such unaudited financial statements for them to be in
conformity with generally accepted accounting principles; or (C) that,
except in all instances as set forth or contemplated in the Registration
Statement or the Prospectus, (i) at the date of the latest available
unaudited financial statements of the Company read by them and at a
subsequent date, not more than five business days before the Closing Date,
there has been any change in the capital stock or long-term debt of the
Company, as compared with amounts shown in the latest balance sheet of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus, except for normally scheduled reductions in
the Company's long-term debt, and (ii) for the period from the date of the
latest financial statements included or incorporated by reference in the
Prospectus to the date of the latest available interim financial
statements read by them and to the aforementioned date not more than five
business days prior to the Closing Date there was any decrease, as
compared with the corresponding period in the preceding twelve month
period, in the Company's operating revenues, operating income or net
income or (iii) there was any decrease in the ratio of earnings to fixed
charges for the twelve months ended the date of such latest available
interim financial statements as compared to such ratio for the twelve
months ended the date of the latest financial statements included or
incorporated by reference in the Prospectus, except as set forth in such
letter, in which latter case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless such
explanation is not deemed necessary by the Managers; and (3) that they
have compared certain dollar amounts designated by the Company and
disclosed in the Registration Statement and Prospectus with such dollar
amounts contained in the general accounting records of the Company or
derived directly from such records by analysis or computation, and have
found such dollar amounts to be in agreement therewith, except as
otherwise specified in such letter in which latter case the letter shall
be accompanied by an explanation by the Company as to the significance
thereof unless such explanation is not deemed necessary by the Managers.
(v) The form of letter shall reflect the inclusion of any subsequently
dated financial information, the incorporation by reference of any
subsequently filed Annual Report on Form 10-K or Quarterly Report on Form
10-Q and/or the inclusion in the Prospectus of any statistical or
financial information.
Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall not have
been any change or decrease specified in the letter required by this
subsection (g) which is, in the judgment of the Managers, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or the delivery of the Offered Securities as contemplated by the
Registration Statement and the Prospectus.
(h) At the Closing Date the Managers shall have received a
certificate, dated as of the Closing Date, signed by the President or a
Vice President and the Treasurer or the Secretary of the Company, to the
effect that (i) to the best of the knowledge of the signers, no stop order
suspending the effectiveness of the Registration Statement has been issued
under the Securities Act and no proceedings therefor have been instituted
or threatened by the Commission, (ii) the order of the Oklahoma Commission
referred to in subsection (b) of Section 1 of the Underwriting Agreement
is, to the best of the knowledge of the signers, in full force and effect,
and (iii) since the respective dates as of which information is given in
the Registration Statement or Prospectus, there has been no (A) material
adverse change in the condition, financial or otherwise, or in the
earnings of the Company or (B) adverse development concerning the
Company's business or assets which would result in a material adverse
change in its prospective financial condition or results of operations,
except such changes as are set forth or contemplated in the Registration
Statement or the Prospectus (including financial statements and notes
thereto contained in the Incorporated Documents).
(i) All proceedings to be taken in connection with the issuance and
sale of the Offered Securities by the Company as contemplated in the
Underwriting Agreement shall be satisfactory in form and substance to
Underwriters' Counsel.
In case any of the conditions specified in this Section 4 shall not
have been fulfilled, the Underwriting Agreement may be terminated by the
Managers with the consent of Underwriters who have agreed to purchase in
the aggregate more than fifty percent of the total principal amount of the
Offered Securities upon delivering written notice thereof to the Company.
Any such termination shall be without liability of any party to any other
party except as otherwise provided in subsection (f) of Section 3 of the
Underwriting Agreement.
5. Indemnification.
(a) The Company agrees to indemnify and hold harmless each of the
Underwriters and each person, if any, who controls any of the Underwriters
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Securities Act, the
Exchange Act or the common law or otherwise, and to reimburse each such
Underwriter or such controlling person for any reasonable legal or other
expenses (including, to the extent hereinafter provided, reasonable
counsel fees) incurred by it or them in connection with defending against
any such losses, claims, damages or liabilities, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in (1) the Registration Statement or any amendment to the
Registration Statement or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (2) the Prospectus or the
Prospectus as amended or supplemented, if such losses, claims, damages or
liabilities arise out of or are based upon the use of the Prospectus or
the Prospectus as amended or supplemented after the Company shall have
amended or supplemented the Prospectus, or any omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the indemnity agreement
contained in this subsection (a) shall not apply to any such losses,
claims, damages or liabilities arising out of or based upon (i) any such
untrue statement or alleged untrue statement, or any such omission or
alleged omission, if such statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by
any of the Underwriters for use in the Registration Statement or the
Prospectus or any amendment or supplement to either thereof, (ii) any
statement made in the Form T-1 filed by the Trustee as an exhibit to the
Registration Statement or (iii) the failure of any Underwriter to deliver
(either directly or through the Managers) a copy of the Prospectus
(excluding the Incorporated Documents), or of the Prospectus as amended or
supplemented after it shall have been amended or supplemented by the
Company (excluding the Incorporated Documents), to any person to whom a
copy of any preliminary prospectus shall have been delivered by or on
behalf of such Underwriter to whom any Offered Securities shall have been
sold by such Underwriter, as such delivery may be required by the
Securities Act and the rules and regulations of the Commission thereunder.
(b) Each of the Underwriters agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement,
each of its directors, each person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, each other Underwriter and each person, if any, who so controls any
such other Underwriter, from and against any and all losses, claims,
damages or liabilities, joint or several, to which any one or more of them
may become subject under the Securities Act, the Exchange Act or the
common law or otherwise, and to reimburse each of them for any reasonable
legal or other expenses (including, to the extent hereinafter provided,
reasonable counsel fees) incurred by them in connection with defending
against any such losses, claims, damages or liabilities of the character
above specified arising out of or based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus or any amendment to the Registration Statement
or amendment or supplement to the Prospectus or upon any omission or
alleged omission to state in any thereof a material fact required to be
stated therein or necessary to make the statements therein not misleading
if such statement or omission was made in reliance upon and in conformity
with information furnished in writing to the Company by such Underwriter
for use in the Registration Statement or the Prospectus or any amendment
or supplement to either thereof, or (ii) the failure of such Underwriter
to deliver (either directly or through the Managers) a copy of the
Prospectus (excluding the Incorporated Documents), or of the Prospectus as
amended or supplemented after it shall have been amended or supplemented
by the Company (excluding the Incorporated Documents), to any person to
whom a copy of any preliminary prospectus shall have been delivered by or
on behalf of such Underwriter and to whom any Offered Securities shall
have been sold by such Underwriter, as such delivery may be required by
the Securities Act and the rules and regulations of the Commission
thereunder.
(c) Promptly after receipt by a party indemnified under this
Section 5 (an "indemnified party") of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to
be made against a party granting an indemnity under this Section 5 (the
"indemnifying party"), notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 5. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof (thereby conceding that the action in question is subject
to indemnification by the indemnifying party hereunder), with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert and conduct such
legal defenses and to otherwise participate in the defense of such action
on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so
to assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 5 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the
proviso to the next preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than
one separate counsel, approved by the Managers in the case of subsection
(a), representing the indemnified parties under subsection (a) who are
parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying
party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) If the indemnification provided for in this Section 5 shall be
unenforceable under applicable law by an indemnified party, the
indemnifying party agrees to contribute to such indemnified party with
respect to any and all losses, claims, damages and liabilities for which
such indemnification provided for in this Section 5 shall be
unenforceable, in such proportion as shall be appropriate to reflect the
relative fault of the indemnifying party on the one hand and the
indemnified party on the other in connection with the statements or
omissions which have resulted in such losses, claims, damages and
liabilities, as well as any other relevant equitable considerations;
provided, however, that no indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from the indemnifying party if the
indemnifying party is not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party
and each such party's relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission.
The Company and each of the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subparagraph were to be
determined solely by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to above.
(e) The indemnity and contribution agreements contained in this
Section 5 and the representations and warranties of the Company in the
Underwriting Agreement shall remain operative and in full force regardless
of (i) any termination of the Underwriting Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its
directors or officers or any person controlling the Company and (iii)
delivery of and payment for any of the Offered Securities.
6. Termination.
(a) If the Offered Securities are being purchased for the purpose
of resale, the Underwriting Agreement may be terminated, at any time prior
to the Closing Date, by the Managers with the consent of Underwriters who
have agreed to purchase in the aggregate more than fifty percent of the
total principal amount of the Offered Securities, if (a) there shall have
occurred any general suspension or material limitation on trading in
securities on the New York Stock Exchange or by the Commission or by any
federal or state agency or by the decision of any court, any limitation on
prices for such trading or any restrictions on the distribution of
securities, (b) trading in any securities of the Company shall have been
suspended by the Commission or a national securities exchange, (c) a
general banking moratorium on commercial banking activities in New York
shall have been declared either by federal or New York State authorities,
(d) the rating assigned by any nationally recognized securities rating
agency to any securities of the Company as of the date of the Underwriting
Agreement shall have been lowered since that date, or (e) there shall have
occurred any outbreak or material escalation of hostilities or other
calamity or crisis, the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the Managers,
impracticable to market the Offered Securities.
(b) Any termination of the Underwriting Agreement pursuant to this
Section 6 shall be without liability of any party to any other party
except as otherwise provided in subsection (f) of Section 3.
7. Default by an Underwriter.
If any one or more Underwriters shall fail to purchase and pay for
any of the Offered Securities agreed to be purchased by such Underwriter
or Underwriters hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under the
Underwriting Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
amount of Offered Securities set forth opposite their names in Schedule I
to the Underwriting Agreement bears to the aggregate amount of Offered
Securities set opposite the names of all the remaining Underwriters) the
Offered Securities which the defaulting Underwriter or Underwriters agreed
but failed to purchase; provided, however, that in the event that the
aggregate amount of Offered Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase (less such aggregate amount of
Offered Securities as are purchased by substituted underwriters selected
by the Managers with the approval of the Company or selected by the
Company with the approval of the Managers) shall exceed 10% of the
aggregate amount of Offered Securities set forth in such Schedule I, the
remaining Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Offered Securities, and if
such nondefaulting Underwriters do not purchase all the Offered
Securities, the Underwriting Agreement will terminate without liability to
any nondefaulting Underwriter or the Company (except as otherwise provided
in subsection (f) of Section 3). In the event of a default by an
Underwriter as set forth in this Section 7, the Closing Date shall be
postponed for such period, not exceeding seven calendar days, as the
Company and the Managers shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in the
Underwriting Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting Underwriter for
damages occasioned by its default thereunder.
8. Notice.
All communications under the Underwriting Agreement will be
effective only on receipt, and, if sent to the Managers, will be mailed,
delivered or telegraphed and confirmed to them, at the address, or
telephoned to them at the number, specified in the Underwriting Agreement
and to Sidley & Austin, One First National Plaza, Chicago, Illinois 60603,
attention: Wilbur C. Delp, Jr.; or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it in care of Central
and South West Corporation, 1616 Woodall Rodgers Freeway, P.O. Box 660164,
Dallas, Texas 75202, attention of Stephen D. Wise, in each case with
written confirmation of such communication sent to Milbank, Tweed, Hadley
& McCloy, 1 Chase Manhattan Plaza, New York, New York 10005, attention
Robert B. Williams, Esq.
9. Successors.
The Underwriting Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 5 of
the Underwriting Agreement, and no other person will have any right or
obligation hereunder and no other person (including a purchaser, as a
purchaser, from any Underwriter of any of the Offered Securities) shall
acquire or have any rights under or by virtue of the Underwriting
Agreement.
10. Governing Law.
The Underwriting Agreement shall be governed by and construed in
accordance with the laws of the State of New York.