Exhibit 4-L
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
---------------------------
188
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.
189
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
190
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
191
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.
194
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.
195
"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).
196
"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.
197
"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
198
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.
199
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 wilful 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.
200
(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
201
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.
202
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, wilful 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.
203
(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.
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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
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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.
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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
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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
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(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
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
SCE&G Trust I
c/o South Carolina Electric & Gas Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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(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.
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IN WITNESS WHEREOF, the parties hereto have executed this Guarantee Agreement
as of the day and year first above written.
SOUTH CAROLINA ELECTRIC & GAS COMPAN