Exhibit 4.06
GUARANTEE AGREEMENT
BY AND BETWEEN
SOUTH CAROLINA ELECTRIC & GAS COMPANY
as Guarantor
and
THE BANK OF NEW YORK,
as Guarantee Trustee
RELATING TO
SCE&G TRUST I
---------------------------
Dated as of October 28, 1997
---------------------------
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
312(c) Inapplicable
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 1.1, 2.5, 3.2(a)
314(f) 2.1, 3.2
315(a) 3.1(d)(i)
315(b) 2.7
315(c) 3.1(c)
315(d) 3.1(d)
315(e) Inapplicable
316(a) 1.1, 2.6, 5.4
316(b) 5.5
316(c) 8.3
317(a) 2.7(c)
317(b) Inapplicable
318(a) 2.1
318(b) 2.1
318(c) 2.1
--------------------
* This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS 6
SECTION 1.1. Definitions 6
ARTICLE II
TRUST INDENTURE ACT 9
SECTION 2.1. Trust Indenture Act; Application 9
SECTION 2.2. List of Holders 10
SECTION 2.3. Reports by the Guarantee Trustee 10
SECTION 2.4. Periodic Reports to the Guarantee Trustee 10
SECTION 2.5. Evidence of Compliance with Conditions
Precedent 10
SECTION 2.6. Events of Default; Waiver 11
SECTION 2.7. Event of Default; Notice 11
SECTION 2.8. Conflicting Interests 12
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE 12
SECTION 3.1. Powers and Duties of the Guarantee Trustee 12
SECTION 3.2. Certain Rights of Guarantee Trustee 14
SECTION 3.3. Compensation; Indemnity; Fees 15
ARTICLE IV
GUARANTEE TRUSTEE 16
SECTION 4.1. Guarantee Trustee; Eligibility 16
SECTION 4.2. Appointment, Removal and Resignation
of the Guarantee Trustee 17
ARTICLE V
GUARANTEE 18
SECTION 5.1. Guarantee 18
SECTION 5.2. Waiver of Notice and Demand 18
SECTION 5.3. Obligations Not Affected 18
SECTION 5.4. Rights of Holders 19
SECTION 5.5. Unconditional Right of Holders to Payment 20
SECTION 5.6. Guarantee of Payment 20
SECTION 5.7. Subrogation 20
SECTION 5.8. Independent Obligations 20
ARTICLE VI
COVENANTS AND SUBORDINATION 21
SECTION 6.1. Subordination 21
SECTION 6.2. Pari Passu Guarantees 21
ARTICLE VII
TERMINATION 21
SECTION 7.1. Termination 21
ARTICLE VIII
MISCELLANEOUS 22
SECTION 8.1. Successors and Assigns 22
SECTION 8.2. Amendments 22
SECTION 8.3. Record Date 22
SECTION 8.4. Notices 22
SECTION 8.5. Benefit 23
SECTION 8.6. Governing Law 23
SECTION 8.7. Counterparts 23
GUARANTEE AGREEMENT, dated as of October 28, 1997, by and between South
Carolina Electric & Gas Company, a South Carolina corporation (the "Guarantor"),
and The Bank of New York, a New York banking corporation, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Trust Preferred Securities (as defined herein) of SCE&G
TRUST I, a Delaware statutory business trust (the "Issuer Trust").
RECITALS OF THE CORPORATION
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of
October 28, 1997 (the "Trust Agreement," as more particularly defined herein),
among South Carolina Electric & Gas Company, as Depositor, the Property Trustee,
the Delaware Trustee, the Administrative Trustees (as such terms are defined in
the Trust Agreement), the Holders and the holders of the Common Securities the
Issuer Trust is issuing $50,000,000 aggregate Liquidation Amount (as defined in
the Trust Agreement) of its 7.55% Trust Preferred Securities, Series A
(liquidation amount $25 per Trust Preferred Security) (the "Trust Preferred
Securities"), representing preferred undivided beneficial interests in the
assets of the Issuer Trust and having the terms set forth in the Trust
Agreement; and
WHEREAS, the Trust Preferred Securities will be issued by the Issuer Trust
and the proceeds thereof, together with the proceeds from the issuance of the
Issuer Trust's Common Securities (as defined herein), will be used to purchase
the Debentures (as defined in the Trust Agreement) of the Guarantor, which
Debentures will be deposited with the Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase Trust Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Trust Preferred
Securities the Guarantee Payments (as defined herein), as the case may be, and
to make certain other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase of Trust Preferred
Securities by each Holder, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
For all purposes of this Guarantee Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(b) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) The words "include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;
(e) Unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this
Guarantee Agreement; and
(f) The words "hereby," "herein," "hereof" and "hereunder" and other words
of similar import refer to this Guarantee Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Board of Directors" means, as the context requires, the board of directors
of the Guarantor or the Executive Committee of the board of directors of the
Guarantor (or any other committee of the board of directors of the Guarantor
performing similar functions) or a committee designated by the board of
directors of the Guarantor (or such committee), comprised of two or more members
of the board of directors of the Guarantor or officers of the Guarantor, or
both.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.
"Event of Default" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.
"Guarantee Agreement" means this Guarantee Agreement, as modified, amended
or supplemented from time to time.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Trust Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Trust Preferred Securities, to the extent the Issuer Trust shall have funds on
hand available therefor at such time; (ii) the Redemption Price (as defined in
the Trust Agreement) with respect to any Trust Preferred Securities called for
redemption by the Issuer Trust, to the extent the Issuer Trust shall have funds
on hand available therefor at such time; and (iii) upon a voluntary or
involuntary termination, winding-up or liquidation of the Issuer Trust, unless
Debentures are distributed to the Holders, the lesser of (a) the Liquidation
Distribution (as defined in the Trust Agreement) with respect to the Trust
Preferred Securities, to the extent that the Issuer Trust shall have funds on
hand available therefor at such time, and (b) the amount of assets of the Issuer
Trust remaining available for distribution to Holders on liquidation of the
Issuer.
"Guarantee Trustee" means The Bank of New York, solely in its capacity as
Guarantee Trustee and not in its individual capacity, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.
"Guarantor" has the meaning specified in the preamble of this
Guarantee Agreement.
"Holder" means any Holder (as defined in the Trust Agreement) of any Trust
Preferred Securities; provided, however, that in determining whether the holders
of the requisite percentage of Trust Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as of October
28, 1997, among the Guarantor and The Bank of New York, as trustee, as the same
may be modified, amended or supplemented from time to time.
"Issuer Trust" has the meaning specified in the preamble of
this Guarantee Agreement.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Trust Preferred Securities" means,
except as provided by the Trust Indenture Act, Trust Preferred Securities
representing more than 50% of the aggregate Liquidation Amount (as defined in
the Trust Agreement) of all Trust Preferred Securities then Outstanding (as
defined in the Trust Agreement).
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman of the Board of Directors of such Person or the Chief
Executive Officer, the President, the Chief Financial Officer, a Vice President
or the Treasurer of such Person, and by the Secretary or an Assistant Secretary
of such Person, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement by each officer signing the Officers' Certificate that such
officer has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officers' Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, company,
limited liability company, trust, business trust, unincorporated association or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee and also means, with respect to a
particular matter, any other officer to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Agreement" means the Amended and Restated Trust Agreement of the
Issuer Trust referred to in the recitals to this Guarantee Agreement, as
modified, amended or supplemented from time to time.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this Guarantee Agreement was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Preferred Securities" has the meaning specified in the
recitals to this Guarantee Agreement.
"Vice President," when used with respect to the Guarantor, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to and
including 317, of the Trust Indenture Act through operation of Section 318(c)
thereof, such imposed duties shall control. If any provision of this Guarantee
Agreement modifies or excludes any provision of the Trust Indenture Act which
may be so modified or excluded, the latter provision shall be deemed to apply to
this Guarantee Agreement as so modified or to be excluded, as the case may be.
SECTION 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semi-annually, on or before March 31 and September 30 of each year,
a list, in such form as the Guarantee Trustee may reasonably require, of the
names and addresses of the Holders (a "List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (b) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantors of any such request, a List of Holders as of a date not more than
15 days prior to the time such list is furnished, in each case to the extent
such information is in the possession or control of the Guarantor and has not
otherwise been received by the Guarantee Trustee in its capacity as such. The
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with the requirements of Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than January 31 of each year, the Guarantee Trustee shall provide
to the Holders such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions
Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer of the Guarantor pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of at least a Majority in Liquidation Amount of the Trust
Preferred Securities may, by vote, on behalf of the Holders of all the Trust
Preferred Securities, waive any past default or Event of Default and its
consequences. Upon such waiver, any such default or Event of Default shall cease
to exist, and any default or Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notice of any such Event of Default known to the Guarantee Trustee, unless such
Event of Default has been cured before the giving of such notice, provided that,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained actual knowledge, of such Event of
Default.
(c) Subject to the provisions of Section 5.4 hereof, in the case of a
default by the Guarantor in any of its payment obligations under this Guarantee
Agreement, when and as the same shall become due and payable, the Guarantee
Trustee shall have the right, subject to the rights of the Holders hereunder, to
recover judgment against the Guarantor for the whole amount of such payments
remaining unpaid.
SECTION 2.8. Conflicting Interests.
The Trust Agreement and the Indenture shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Guarantee Trustee hereunder. The right, title and interest of the Guarantee
Trustee, as such, hereunder shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. The Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Guarantee Agreement, and use
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) Prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement (including pursuant to Section 2.1), and the
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of
the Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such
certificates or opinions that by any provision hereof or
of the Trust Indenture Act are specifically required to
be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Guarantee Agreement.
(ii) The Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the
Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made.
(iii) The Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less
than a Majority in Liquidation Amount of the Trust Preferred
Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement.
(iv) No provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such
funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document reasonably believed by it to be genuine and to
have been signed, sent or presented by the proper party or
parties.
(ii) Any direction or act of either of the Guarantors
contemplated by this Guarantee Agreement shall be sufficiently
evidenced by an Officers' Certificate unless otherwise
prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that
a matter be proved or established before taking, suffering or
omitting to take any action hereunder, the Guarantee Trustee
(unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and rely upon
an Officers' Certificate which, upon receipt of such request
from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel
of its selection, and the written advice or opinion of such
legal counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted to be taken by it hereunder in good
faith and in accordance with such advice or opinion. Such
legal counsel may be legal counsel to the Guarantor or any of
its Affiliates and may be one of its employees. The Guarantee
Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from
any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder
unless such Holder shall have provided to the Guarantee
Trustee such adequate security and indemnity as would satisfy
a reasonable person in the position of the Guarantee Trustee
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee
Trustee; provided that nothing contained in this Section
3.2(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this
Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Guarantee Trustee, in its discretion, may
make such further inquiry or investigation into such facts or
matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either
directly or by or through its agents or attorneys, and the
Guarantee Trustee shall not be responsible for any misconduct
or negligence on the part of any such agent or attorney
appointed by it with due care hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee
Trustee (A) may request instructions from the Holders, (B) may
refrain from enforcing such remedy or right or taking such
other action until such instructions are received and (C)
shall be protected in acting in accordance with such
instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Compensation; Indemnity; Fees.
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such
compensation for all services rendered by it hereunder as may be
agreed by the Guarantor and the Guarantee Trustee from time to
time (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the
Guarantee Trustee in accordance with any provision of this
Guarantee Agreement (including the reasonable compensation and
the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred
without negligence, willful misconduct or bad faith on the part
of the Guarantee Trustee, arising out of or in connection with
the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least $50,000,000,
and shall be a corporation meeting the requirements of Section 310(a) of the
Trust Indenture Act. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then, for the purposes of this Section 4.1 and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2.
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and the Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the
Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer Trust), as and when due, regardless of any
defense, right of setoff or counterclaim that the Issuer Trust may have or
assert, except the defense of payment. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer Trust to pay such amounts
to the Holders.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer Trust or any other Person before proceeding
against either of the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer Trust of any express or implied
agreement, covenant, term or condition relating to the Trust Preferred
Securities to be performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust of all
or any portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment period
on the Debentures as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Trust Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Trust Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Trust Preferred
Securities, or any action on the part of the Issuer Trust granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer Trust or any of the assets of the
Issuer Trust;
(e) any invalidity of, or defect or deficiency in,
the Trust Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor (other than payment of
the underlying obligation), it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and unconditional under
any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Trust Preferred Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee in respect of this Guarantee Agreement or exercising
any trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.
SECTION 5.5. Unconditional Right of Holders to Payment.
Notwithstanding any other provision of this Guarantee Agreement, each
Holder shall have the right, which is absolute and unconditional, to receive
Guarantee Payments when due, and to institute suit for the enforcement of any
such payment, and such right shall not be impaired without the consent of such
Holder.
SECTION 5.6. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon the distribution of Debentures to Holders as
provided in the Trust Agreement.
SECTION 5.7. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer Trust in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold the amount in trust for the Holders and to pay over
such amount to the Holders.
SECTION 5.8. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer Trust with respect to the Trust Preferred
Securities and that it be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Guarantor, to the extent and in the manner set forth in the
Indenture with respect to the Debentures, and the provisions of Article XIII of
the Indenture will apply, mutatis mutandis, to the obligations of the Guarantor
hereunder. The obligations of the Guarantor hereunder do not constitute Senior
Indebtedness (as defined in the Indenture) of the Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement rank pari
passu with the obligations of the Guarantor under (i) any similar guarantee
agreements issued by the Guarantor on behalf of the holders of preferred or
capital securities issued by any Issuer Trust (as defined in the Indenture),
(ii) the Indenture and the Securities (as defined therein) issued thereunder and
(iii) any other security, guarantee or other agreement or obligation that is
expressly stated to rank pari passu with the obligations of the Guarantor under
this Guarantee Agreement or with any obligation that ranks pari passu with the
obligations of the Guarantor under this Guarantee Agreement.
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price (as defined in the Trust
Agreement) of all Trust Preferred Securities, (ii) the distribution of
Debentures to the Holders in exchange for all of the Trust Preferred Securities
or (iii) full payment of the amounts payable in accordance with Article IX of
the Trust Agreement upon liquidation of the Issuer Trust. Notwithstanding the
foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder is required to repay
any sums paid with respect to Trust Preferred Securities or this Guarantee
Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor, and shall inure to the benefit of the Holders of the Trust Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder, and any purported assignment other than in accordance
with this provision shall be void.
SECTION 8.2. Amendments.
Except with respect to any changes that do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in Liquidation Amount of the
Trust Preferred Securities.
SECTION 8.3. Record Date.
For purposes of any action to be taken by Holders pursuant to Sections 2.6,
5.4 or 8.2 hereof, the provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply.
SECTION 8.4. Notices.
Any notice, request or other communication required or permitted to be
given hereunder be in writing, duly signed by the party giving such notice, and
delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or telecopy number set forth
below or such other address or telecopy number as the Guarantor may give notice
to the Guarantee Trustee and the Holders:
South Carolina Electric & Gas Company
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Treasurer
Telecopy: (000) 000-0000
(b) if given to the Guarantee Trustee, at the address or telecopy number
set forth below or such other address or telecopy number as the Guarantee
Trustee may give notice to the Guarantor and Holders:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
with a copy to:
SCE&G Trust I
c/o South Carolina Electric & Gas Company
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Treasurer
Telecopy: (000) 000-0000
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer Trust.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.5. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Trust Preferred Securities.
SECTION 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.7. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Guarantee Agreement
as of the day and year first above written.
SOUTH CAROLINA ELECTRIC & GAS COMPANY
By: s/X. X. Xxxxxx
Name: X. X. Xxxxxx
Title: Treasurer
