GUARANTEE AGREEMENT Between Southwestern Electric Power Company (as Guarantor) and The Bank of New York (as Trustee) dated as of September 1, 2003 (SWEPCo Capital Trust I)
Exhibit
4(b) 3
Between
(as
Guarantor)
and
The
Bank of New York
(as
Trustee)
dated
as of
September
1, 2003
(SWEPCo
Capital Trust I)
CROSS-REFERENCE
TABLE1
|
Section
of Trust Indenture Act
|
Section
of
|
|
|
of
1939, as amended
|
||
|
310(a)
|
4.01(a)
|
|
|
310(b)
|
4.01(c),
2.08
|
|
|
310(c)
|
Inapplicable
|
|
|
311(a)
|
2.02(b)
|
|
|
311(b)
|
2.02(b)
|
|
|
311(c)
|
Inapplicable
|
|
|
312(a)
|
2.02(a)
|
|
|
312(b)
|
2.02(b)
|
|
|
313
|
2.03
|
|
|
314(a)
|
2.04
|
|
|
314(b)
|
Inapplicable
|
|
|
314(c)
|
2.05
|
|
|
314(d)
|
Inapplicable
|
|
|
314(e)
|
1.01,
2.05, 3.02
|
|
|
314(f)
|
2.01,
3.02
|
|
|
315(a)
|
3.01(d)
|
|
|
315(b)
|
2.07
|
|
|
315(c)
|
3.01
|
|
|
315(d)
|
3.01(d)
|
|
|
315(e)
|
Inapplicable
|
|
|
316(a)
|
5.04(i),
2.06
|
|
|
316(b)
|
5.03
|
|
|
316(c)
|
2.02
|
|
|
317(a)
|
Inapplicable
|
|
|
317(b)
|
Inapplicable
|
|
|
318(a)
|
2.01(b)
|
|
|
318(b)
|
2.01
|
|
|
318(c)
|
2.01(a)
|
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
|
Page
|
|||
|
ARTICLE
I
|
|||
|
DEFINITIONS
|
|||
|
Section
1.01. Definitions
|
1
|
||
|
ARTICLE
II
|
|||
|
TRUST
INDENTURE ACT
|
|||
|
Section
2.01. Trust Indenture Act; Application
|
3
|
||
|
Section
2.02. Lists of Holders of Securities
|
4
|
||
|
Section
2.03. Reports by the Trustee
|
4
|
||
|
Section
2.04. Periodic Reports to Trustee
|
4
|
||
|
Section
2.05. Evidence of Compliance with Conditions
Precedent
|
4
|
||
|
Section
2.06. Events of Default; Waiver
|
4
|
||
|
Section
2.07. Event of Default; Notice
|
5
|
||
|
Section
2.08. Conflicting Interests
|
5
|
||
|
ARTICLE
III
|
|||
|
POWERS,
DUTIES AND RIGHTS OF TRUSTEE
|
|||
|
Section
3.01. Powers and Duties of the Trustee
|
5
|
||
|
Section
3.02. Certain Rights of Trustee
|
6
|
||
|
Section
3.03. Compensation; Fees; Indemnity
|
8
|
||
|
ARTICLE
IV
|
|||
|
TRUSTEE
|
|||
|
Section
4.01. Trustee; Eligibility
|
8
|
||
|
Section
4.02. Appointment, Removal and Resignation of
Trustee
|
9
|
||
|
ARTICLE
V
|
|||
|
GUARANTEE
|
|||
|
Section
5.01. Guarantee
|
10
|
||
|
Section
5.02. Waiver of Notice and Demand
|
10
|
||
|
Section
5.03. Obligations Not Affected
|
10
|
||
|
Section
5.04. Rights of Holders
|
11
|
||
|
Section
5.05. Guarantee of Payment
|
11
|
||
|
Section
5.06. Subrogation
|
11
|
||
|
Section
5.07. Independent Obligations
|
11
|
||
|
ARTICLE
VI
|
|||
|
SUBORDINATION
|
|||
|
Section
6.01. Subordination
|
12
|
||
|
ARTICLE
VII
|
|||
|
TERMINATION
|
|||
|
Section
7.01. Termination
|
12
|
||
|
ARTICLE
VIII
|
|||
|
MISCELLANEOUS
|
|||
|
Section
8.01. Successors and Assigns
|
12
|
||
|
Section
8.02. Amendments
|
12
|
||
|
Section
8.03. Notices
|
12
|
||
|
Section
8.04. Benefit
|
13
|
||
|
Section
8.05. Interpretation
|
13
|
||
|
Section
8.06. Governing Law
|
14
|
||
This
GUARANTEE AGREEMENT (“Guarantee Agreement”), dated as of September 1, 2003,
between SOUTHWESTERN ELECTRIC POWER COMPANY, a Delaware corporation (the
“Guarantor”), and THE BANK OF NEW YORK, a New York banking corporation, as
trustee (the “Trustee”), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of SWEPCO CAPITAL
TRUST I, a Delaware statutory trust (the Trust”).
WHEREAS,
pursuant to an Amended and Restated Trust Agreement (the “Trust Agreement”),
dated as of September 1, 2003, among the Trustee, the other Trustees named
therein, Southwestern Electric Power Company, as Depositor, and the holders
of
undivided beneficial interests in the assets of the Trust, the Trust is issuing
as of October 1, 2003, $110,000,000 aggregate liquidation amount of its Flexible
Trust Preferred Securities (the “Preferred Securities”) representing preferred
undivided beneficial interests in the assets of the Trust and having the terms
set forth in the Trust Agreement;
WHEREAS,
the Preferred Securities will be issued by the Trust and the proceeds thereof
will be used to purchase the Junior Subordinated Debentures (as defined in
the
Trust Agreement) of the Guarantor, which will be held by the Trust as trust
assets; and
WHEREAS,
as incentive for the Holders to purchase the Preferred Securities, the Guarantor
desires to irrevocably and unconditionally agree, to the extent set forth
herein, to pay to the Holders the Guarantee Payments (as defined herein) and
to
make certain other payments on the terms and conditions set forth
herein.
NOW,
THEREFORE, in consideration of the payment for Preferred Securities by each
Holder (as defined herein) thereof, which payment the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Common
Securities (as defined herein) and the Preferred Securities.
ARTICLE
I
DEFINITIONS
SECTION
1.01. Definitions. As
used in this Guarantee Agreement, the terms set forth below shall, unless the
context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have
the
meanings assigned to such terms in the Trust Agreement as in effect on the
date
hereof.
“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.
“Common
Securities” means the securities representing common undivided beneficial
interests in the assets of the Trust.
“Event
of
Default” means a failure by the Guarantor to perform any of its payment
obligations under this Guarantee Agreement or to perform any other obligations
if such default remains unremedied for 30 days.
“Guarantee
Payments” shall mean the following payments or distributions, without
duplication, with respect to the Common Securities and the Preferred Securities,
to the extent not paid or made by or on behalf of the Trust: (i) any
accrued and unpaid distributions that are required to be paid on such Common
Securities and Preferred Securities to the extent the Trust has funds on hand
available therefor to make such payment; (ii) the redemption price, including
all accrued and unpaid distributions to the date of redemption (the “Redemption
Price”), with respect to the Common Securities and Preferred Securities called
for redemption by the Trust to the extent that the Trust has funds on hand
available therefor sufficient to make such payment; and (iii) upon a voluntary
or involuntary dissolution, winding-up or liquidation of the Trust (other than
in connection with the distribution of Junior Subordinated Debentures to the
holders of Trust Securities or the redemption of all of the Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and
all
accumulated and unpaid distributions on the Common Securities and the Preferred
Securities to the date of payment, to the extent the Trust has funds on hand
available therefor, and (b) the amount of assets of the Trust remaining
available for distribution to Holders in liquidation of the Trust (in either
case, the “Liquidation Distribution”).
“Holder”
shall mean any holder, as registered on the books and records of the Trust,
of
any Common Securities and Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, “Holder”
shall not include the Guarantor or any Affiliate of the Guarantor.
“Indenture”
means the Subordinated Indenture dated as of September 1, 2003, between the
Guarantor, as Junior Subordinated Debenture Issuer, and The Bank of New York,
as
trustee, as the same may be modified, amended or supplemented in accordance
with
the applicable provisions thereof, including by the First Supplemental Indenture
dated as of October 1, 2003, by and between the Guarantor and The Bank of New
York, as trustee.
“Majority
in liquidation amount of Preferred Securities” means a vote by Holder(s) of
Preferred Securities, voting separately as a class, of more than 50% of the
liquidation amount of all Preferred Securities outstanding at the time of
determination.
“Officers’
Certificate” means a certificate signed by the Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer,
the
Secretary or an Assistant Secretary, of the Guarantor, and delivered to the
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 that each officer signing the Officers’ Certificate 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 each officer in rendering the Officers’ Certificate;
(c) a
statement that each 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 each such officer, such condition
or
covenant has been complied with.
“Person”
means any individual, corporation, partnership, limited liability company,
joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
“Responsible
Officer” means, with respect to the Trustee, any vice president, any assistant
vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, any senior trust officer, trust officer or assistant trust
officer or any other officer of the Corporate Trust Department of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust
matter, any other officer to whom such matter is referred because of that
officer’s knowledge of and familiarity with the particular subject.
“Successor
Trustee” means a successor Trustee possessing the qualifications to act as
Trustee under Section 4.01.
“Trust
Indenture Act” means the Trust Indenture Act of 1939, as amended.
“Trustee”
means The Bank of New York until a Successor Trustee has been appointed and
has
accepted such appointment pursuant to the terms of this Guarantee Agreement
and
thereafter means each such Successor Trustee.
ARTICLE
II
TRUST
INDENTURE ACT
SECTION
2.01. 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; and
(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 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
SECTION
2.02. Lists
of Holders of Securities.
(a) The
Guarantor shall furnish or cause to be furnished to the Trustee (a)
semiannually, not later than April 1 and October 1 in each year, a list, in
such
form as the Trustee may reasonably require, of the names and addresses of the
Holders (“List of Holders”) as of a date not more than 15 days prior to the time
such list is furnished, and (b) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the Guarantor 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; provided that, the Guarantor shall not be obligated
to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Trustee by the Guarantor
or at
any time the Trustee is the Securities Registrar under the Trust
Agreement. The Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The
Trustee shall comply with its obligations under Sections 311(a), 311(b) and
312(b) of the Trust Indenture Act.
SECTION
2.03. Reports
by the Trustee. Within
60 days after May 15 of each year commencing May 15, 2004, the Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by Section 313(a) of the Trust Indenture Act, if any, in the form and in the
manner provided by Section 313 of the Trust Indenture Act. The
Trustee shall also comply with the other requirements of Section 313 of the
Trust Indenture Act.
SECTION
2.04. Periodic
Reports to Trustee. The
Guarantor shall provide to the Trustee such documents, reports and information
as required by Section 314 of the Trust Indenture Act (if any) in the form,
in
the manner and at the times required by Section 314 of the Trust Indenture
Act,
and shall provide, within 120 days after the end of each of its fiscal years,
the compliance certificate required by Section 314(a)(4) of the Trust Indenture
Act in the form and in the manner required by such Section. Delivery
of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such reports, information and
documents shall not constitute constructive notice of any information contained
therein or determinable from information contained therein.
SECTION
2.05. Evidence
of Compliance with Conditions Precedent. The
Guarantor shall provide to the Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Guarantee Agreement,
including an Officers’ Certificate and an opinion of counsel 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
pursuant to Section 314(c)(1) may be given in the form of an Officers’
Certificate.
SECTION
2.06. Events
of Default; Waiver. The
Holders of a Majority in liquidation amount of Preferred Securities may, by
vote, on behalf of all of the Holders, waive any past Event of Default and
its
consequences. Upon such waiver, any such Event of Default shall cease
to exist, and any 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
2.07. Event
of Default; Notice.
(a) The
Trustee shall, within 90 days after the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders, notices of all
Events of Default actually known to the Trustee, unless such defaults have
been
cured before the giving of such notice, provided that the 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 Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The
Trustee shall not be deemed to have knowledge of any Event of Default unless
the
Trustee shall have received written notice, or a Responsible Officer charged
with the administration of the Trust Agreement shall have obtained written
notice, of such Event of Default.
SECTION
2.08. Conflicting
Interests. The
Trust Agreement 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 TRUSTEE
SECTION
3.01. Powers
and Duties of the Trustee.
(a) This
Guarantee Agreement shall be held by the Trustee for the benefit of the Holders,
and the Trustee shall not transfer this Guarantee Agreement to any Person except
the Trustee shall assign rights hereunder to a Holder to the extent such
assignment is necessary to exercise such Holder’s rights pursuant to Section
5.04 or to a Successor Trustee upon acceptance by such Successor Trustee of
its
appointment to act as Successor Trustee. The right, title and
interest of the Trustee shall automatically vest in any Successor Trustee,
and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Trustee.
(b) If
an
Event of Default has occurred and is continuing, the Trustee shall enforce
this
Guarantee Agreement for the benefit of the Holders.
(c) The
Trustee, before the occurrence of any Event of Default and after the curing
or
waiving 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 Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the 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 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 Trustee shall be determined solely by the express
provisions of this Guarantee Agreement, and the 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 Trustee, the 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 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 are
specifically required to be furnished to the Trustee, the 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
Trustee shall not be liable for any error of judgment made in good faith by
a
Responsible Officer of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts upon which such judgment
was
made;
(iii) the
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
a
Majority in liquidation amount of the Preferred Securities relating to the
time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee under
this
Guarantee Agreement; and
(iv) no
provision of this Guarantee Agreement shall require the 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 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
3.02. Certain
Rights of Trustee.
(a) Subject
to the provisions of Section 3.01:
(i) the
Trustee may conclusively 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 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 the Guarantor contemplated by this Guarantee Agreement
shall
be sufficiently evidenced by an Officers’ Certificate;
(iii) whenever,
in the administration of this Guarantee Agreement, the Trustee shall deem it
desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the 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,
shall be promptly delivered by the Guarantor;
(iv) the
Trustee may consult with counsel or other experts of its choice, and the written
advice or opinion of such counsel or other experts shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with such advice or opinion;
such counsel may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees; the 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
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 Trustee such adequate
security and indemnity as would satisfy a reasonable person in the position
of
the 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
Trustee; provided that nothing contained in this Section 3.02(a)(v) shall be
taken to relieve the 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
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 Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or
matters as it may see fit;
(vii) the
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys, and the Trustee
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(viii) whenever
in the administration of this Guarantee Agreement the Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or right
or taking any other action hereunder, the Trustee (i) may request instructions
from the Holders, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
protected in acting in accordance with such instructions;
(ix) the
Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Guarantee
Agreement; and
(x) the
rights, privileges, protections, immunities and benefits given to the Trustee,
including , without limitation, its rights to be indemnified, are extended
to,
and shall be enforceable by, the Trustee in each of its respective capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder.
(b) No
provision of this Guarantee Agreement shall be deemed to impose any duty or
obligation on the 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 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 Trustee shall be construed to
be
a duty.
SECTION
3.03. Compensation;
Fees; Indemnity. The
Guarantor agrees:
(a) to
pay to
the Trustee from time to time reasonable compensation for all services rendered
by the Trustee hereunder (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 Trustee upon request
for
all reasonable expenses, disbursements and advances incurred or made by the
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 Trustee for, and to hold the Trustee harmless against, any and
all
loss, damage, claims, liability or expense incurred without negligence or bad
faith on its part, 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
provisions of this Section 3.03 shall survive the termination of this Guarantee
Agreement.
ARTICLE
IV
TRUSTEE
SECTION
4.01. Trustee;
Eligibility.
(a) There
shall at all times be a Trustee which shall:
(i) not
be an
Affiliate of the Guarantor; and
(ii) be
a
corporation organized and doing business under the laws of the United States
of
America or any State or Territory thereof or of the District of Columbia, or
a
corporation or Person permitted by the Securities and Exchange Commission to
act
as an institutional trustee under the Trust Indenture Act, authorized under
such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to supervision
or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this Section
4.01(a)(ii), 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 Trustee shall cease to be eligible to so act under Section 4.01(a),
the
Trustee shall immediately resign in the manner and with the effect set out
in
Section 4.02(c).
(c) If
the
Trustee has or shall acquire any “conflicting interest” within the meaning of
Section 310(b) of the Trust Indenture Act, the Trustee and Guarantor shall
in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act, subject to the rights of the Trustee under the penultimate paragraph
thereof.
SECTION
4.02. Appointment,
Removal and Resignation of Trustee.
(a) Subject
to Section 4.02(b), the Trustee may be appointed or removed without cause at
any
time by the Guarantor.
(b) The
Trustee shall not be removed until a Successor Trustee has been appointed and
has accepted such appointment by written instrument executed by such Successor
Trustee and delivered to the Guarantor.
(c) The
Trustee appointed to office shall hold office until a Successor Trustee shall
have been appointed or until its removal or resignation. The Trustee
may resign from office (without need for prior or subsequent accounting) by
an
instrument in writing executed by the Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Trustee has been
appointed and has accepted such appointment by instrument in writing executed
by
such Successor Trustee and delivered to the Guarantor and the resigning
Trustee.
(d) If
no
Successor Trustee shall have been appointed and accepted appointment as provided
in this Section 4.02 within 60 days after delivery to the Guarantor of an
instrument of resignation, the resigning Trustee may petition any court of
competent jurisdiction for appointment of a Successor Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Trustee.
ARTICLE
V
GUARANTEE
SECTION
5.01. 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 Trust), as and when due, regardless of any defense, right of
set-off or counterclaim which the Guarantor may have or assert against any
Person, other than 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 Trust to pay such
amounts to the Holders.
SECTION
5.02. 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 Trust or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and
demands.
SECTION
5.03. Obligations
Not Affected. The
obligation of the Guarantor to make the Guarantee Payments 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 Trust of any express or implied agreement, covenant, term
or
condition relating to the Preferred Securities to be performed or observed
by
the Trust;
(b) the
extension of time for the payment by the Trust of all or any portion of the
Distributions, Redemption Price, Liquidation Distribution or any other sums
payable under the terms of the Preferred Securities or the extension of time
for
the performance of any other obligation under, arising out of, or in connection
with, the Preferred Securities (other than an extension of time for payment
of
Distributions, Redemption Price, Liquidation Distribution or other sum payable
that results from the extension of any interest payment period on the Junior
Subordinated Debentures permitted by the Indenture);
(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 Preferred Securities, or any action
on
the part of the Trust granting indulgence or extension of any kind;
(d) the
voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any
invalidity of, or defect or deficiency in, the 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, it being the intent of this Section 5.03
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 consent
of,
the Guarantor with respect to the happening of any of the
foregoing.
SECTION
5.04. Rights
of Holders. The
Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Trustee to be held for the benefit of the Holders;
(ii) the 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
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee in respect
of
this Guarantee Agreement or exercising any trust or power conferred upon the
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 or
requesting or directing that action be taken by the Trustee or any other Person;
it being understood and intended that no one or more of such Holders shall
have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Guarantee Agreement to affect, disturb or prejudice the rights
of any other of such Holders or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Guarantee Agreement, except in the manner herein provided and for the equal
and
ratable benefit of all of such Holders.
SECTION
5.05. 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) or upon the
distribution of Junior Subordinated Debentures to the Holders in exchange for
all of the Preferred Securities.
SECTION
5.06. Subrogation. The
Guarantor shall be subrogated to all (if any) rights of the Holders against
the
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 of
Guarantee Payments 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 such amount in trust
for
the Holders and to pay over such amount to the Holders.
SECTION
5.07. Independent
Obligations. The
Guarantor acknowledges that its obligations hereunder are independent of the
obligations of the Trust with respect to the Preferred Securities and that
the
Guarantor shall 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 5.03 hereof.
ARTICLE
VI
SUBORDINATION
SECTION
6.01. Subordination. This
Guarantee Agreement will constitute an unsecured obligation of the Guarantor
and
will rank (i) subordinate and junior in right of payment to all other
liabilities of the Guarantor, including the Junior Subordinated Debentures,
except those obligations or liabilities made pari passu or subordinate by their
terms; (ii) pari passu with the most senior preferred or preference stock now
or
hereafter issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or preference
securities of any Affiliate of the Guarantor; and (iii) senior to all common
stock of the Guarantor.
ARTICLE
VII
TERMINATION
SECTION
7.01. Termination. This
Guarantee Agreement shall terminate and be of no further force and effect
upon: (i) full payment of the Redemption Price of all Preferred
Securities; (ii) the distribution of Junior Subordinated Debentures to the
Holders in exchange for all of the Preferred Securities; or (iii) full payment
of the amounts payable in accordance with the Trust Agreement upon liquidation
of the 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 must restore payment of any sums paid with respect to
Preferred Securities or under this Guarantee Agreement.
ARTICLE
VIII
MISCELLANEOUS
SECTION
8.01. 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 Preferred Securities then
outstanding. Except in connection with a consolidation, merger,
conveyance, transfer, or lease involving the Guarantor that is permitted under
Article Eleven of the Indenture, the Guarantor shall not assign its obligations
hereunder.
SECTION
8.02. Amendments. Except
with respect to any changes which do not materially adversely affect the rights
of Holders (in which case no consent of Holders will be required), this
Guarantee Agreement may only be amended with the prior approval of the Holders
of a Majority in liquidation amount of the Preferred Securities. The
provisions of Article VI of the Trust Agreement concerning meetings of Holders
shall apply to the giving of such approval.
SECTION
8.03. Notices. Any
notice, request or other communication required or permitted to be given
hereunder shall 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 set forth below or such other address as the
Guarantor may give notice of to the Trustee and the Holders:
0
Xxxxxxxxx Xxxxx
Xxxxxxxx,
Xxxx 00000
Facsimile
No.: (000) 000-0000
Attn: Treasurer
(b) if
given
to the Trust, in care of the Trustee, or to the Trustee at the Trust’s (and the
Trustee’s) address set forth below or such other address as the
Trustee on behalf of the Trust may give notice to the Holders:
SWEPCo
Capital Trust I
x/x Xxx
Xxxx xx Xxx Xxxx
000
Xxxxxxx Xxxxxx – 0X
Xxx
Xxxx,
XX 00000
Facsimile
No.: (000) 000-0000
Attn: Corporate
Trust Administration
(c) if
given
to any Holder, at the address set forth on the books and records of the
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
8.04. Benefit. This
Guarantee Agreement is solely for the benefit of the Holders and, subject to
Section 3.01(a), is not separately transferable from the Preferred
Securities.
SECTION
8.05. Interpretation. In
this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized
terms used in this Guarantee Agreement but not defined in the preamble hereto
have the respective meanings assigned to them in Section 1.01;
(b) a
term
defined anywhere in this Guarantee Agreement has the same meaning
throughout;
(c) all
references to “the Guarantee Agreement” or “this Guarantee Agreement” are to
this Guarantee Agreement as modified, supplemented or amended from time to
time;
(d) all
references in this Guarantee Agreement to Articles and Sections are to Articles
and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a
term
defined in the Trust Indenture Act has the same meaning when used in this
Guarantee Agreement unless otherwise defined in this Guarantee Agreement or
unless the context otherwise requires;
(f) a
reference to the singular includes the plural and vice versa; and
(g) the
masculine, feminine or neuter genders used herein shall include the masculine,
feminine and neuter genders.
SECTION
8.06. Governing
Law. THIS
GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. THE
GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE
OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK IN ANY ACTION, SUIT
OR
PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS
GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, AND TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY WAIVES AND AGREES NOT TO
ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION
OR
PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION
OF
SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT
THIS GUARANTEE AGREEMENT OR ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO HEREIN
OR
THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED IN OR BY SUCH
COURTS. THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON
IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN
THIS
GUARANTEE AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW
YORK.
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 shall
together constitute but one and the same instrument.
THIS
GUARANTEE AGREEMENT is executed as of the day and year first above
written.
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By:
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/s/
Xxxxx X. Hargus___________
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Name:
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Xxxxx
X. Xxxxxx
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Title:
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Assistant
Treasurer
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THE
BANK OF NEW YORK
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| By: | /s/ Xxxxxx X. Xxxxx |
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Name:
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Xxxxxx
X. Xxxxxx
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Title:
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Assistant
Treasurer
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