Exhibit 4(i)(ii)
TRUST SECURITIES GUARANTEE AGREEMENT
Among
Southwestern Electric Power Company
(as Guarantor)
and
------------------------------
(as Guarantee Trustee)
Relating to SWEPCo Capital Trust II
dated as of
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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 [Preferred Trust] Securities...............3
SECTION 2.03 Reports by the Guarantee Trustee...............................3
SECTION 2.04 Periodic Reports to Guarantee Trustee..........................3
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.......................................4
SECTION 2.08 Conflicting Interests..........................................4
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01 Powers and Duties of the Guarantee Trustee.....................4
SECTION 3.02 Certain Rights of Guarantee Trustee............................5
SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee..........7
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 Guarantee Trustee; Eligibility.................................7
SECTION 4.02 Compensation, Reimbursement and Indemnity......................7
SECTION 4.03 Appointment, Removal and Resignation of Guarantee Trustee......8
ARTICLE V
GUARANTEE
SECTION 5.01 Guarantee......................................................8
SECTION 5.02 Waiver of Notice and Demand....................................8
SECTION 5.03 Obligations Not Affected.......................................8
SECTION 5.04 Rights of Holders..............................................9
SECTION 5.05 Guarantee of Payment...........................................9
SECTION 5.06 Subrogation....................................................9
SECTION 5.07 Independent Obligations.......................................10
(i)
ARTICLE VI
SUBORDINATION
SECTION 6.01 Subordination.................................................10
ARTICLE VII
TERMINATION
SECTION 7.01 Termination...................................................10
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Successors and Assigns........................................10
SECTION 8.02 Amendments....................................................10
SECTION 8.03 Notices.......................................................10
SECTION 8.04 Benefit.......................................................11
SECTION 8.05 Interpretation................................................11
SECTION 8.06 Governing Law.................................................12
SECTION 8.07 Counterparts..................................................12
(ii)
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- ---------
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
315(a) .........................................................3.01, 3.02
315(b) .........................................................2.07
315(c) .........................................................3.01
315(d) .........................................................3.01(c)
316(a) .........................................................5.04, 2.06
316(b) .........................................................5.03
316(c) .........................................................8.02
317(a) .........................................................Inapplicable
317(b) .........................................................Inapplicable
318(a) .........................................................2.01(b)
318(b) .........................................................2.01
318(c) .........................................................2.01(a)
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* 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.
(iii)
TRUST SECURITIES GUARANTEE AGREEMENT
This TRUST SECURITIES GUARANTEE AGREEMENT ("Guarantee
Agreement"), dated as of ____________, is executed and delivered by Southwestern
Electric Power Company, a Delaware corporation (the "Guarantor"), and
______________________________, as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Trust Securities [and Common Trust Securities] ([each] as defined herein [and
together, the "Securities"]) of SWEPCo Capital Trust II, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of _____________among the Trustees named
therein, Southwestern Electric Power Company, as Depositor and Trust Securities
Guarantor and the several Holders (as defined therein), the Issuer is issuing as
of the date hereof $_____________ aggregate Liquidation Amount of its __%
___________________________ Securities (the "Preferred Trust Securities")
representing undivided beneficial interests in the assets of the Issuer and
having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Trust Securities are to be issued for
sale by the Issuer and the proceeds [thereof, together with the proceeds from
the issuance of the Issuer's Common Trust Securities (as defined herein)] are to
be invested in $___________ principal amount of Debentures (as defined in the
Trust Agreement) [of the Debenture Issuer, which Debentures will be deposited
with Wilmington Trust Company, as Property Trustee under the Trust Agreement, as
trust assets]; and
WHEREAS, as an incentive for Holders to purchase Preferred
Trust Securities, the Guarantor desires irrevocably and unconditionally to
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 purchase of
Debentures, which purchase 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.
ARTICLE I
DEFINITIONS
SECTION 1.01 ▇▇▇▇▇▇▇▇▇▇▇.▇▇ 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 Trust Securities" means the common securities
representing undivided beneficial interests in the assets of the Issuer that
will be issued to Southwestern Electric Power Company, as Depositor.]
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement; provided,
however, that, except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received notice of default from the Guarantee
Trustee or any Holder (with a copy to the Guarantee Trustee) and shall not have
cured such default within 90 days after receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the [Preferred Trust]
Securities, to the extent not paid or made by or on behalf of the Issuer: (i)
any accrued and unpaid Distributions that are required to be paid on such
[Preferred Trust] Securities but only if and to the extent that the Property
Trustee has available in the Payment Account funds sufficient to make such
payment at such time, (ii) the redemption price (the "Redemption Price"), and
all accrued and unpaid Distributions to the date of redemption, with respect to
the [Preferred Trust] Securities called for redemption by the Issuer but only if
and to the extent that the Property Trustee has available in the Payment Account
funds sufficient to make such payment, (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to the Holders in exchange for [Preferred
Trust] Securities as provided in the Trust Agreement or upon a redemption of all
of the [Preferred Trust] Securities upon maturity or redemption of the
Debentures as provided in the Trust Agreement), the lesser of (a) the aggregate
of the Liquidation Amount of all [Preferred Trust] Securities and all accrued
and unpaid Distributions on the [Preferred Trust] Securities to the date of
payment but only if and to the extent that the Property Trustee has available in
the Payment Account funds sufficient to make such payment at such time, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer after satisfaction of liabilities to
creditors of the Issuer as required by applicable law (in either case, the
"Liquidation Distribution").
"Guarantee Trustee" means ______________________________,
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.
"Holder" means a Person in whose name a [Preferred Trust]
Security or [Preferred Trust] Securities is registered in the Securities
Register; provided, however, that in determining whether the holders of the
requisite percentage of [Preferred Trust] Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or
any Affiliate of the Guarantor.
"Majority in Liquidation Amount of the [Preferred Trust]
Securities" means a vote by Holders, voting separately as a class, of more than
50% of the aggregate Liquidation Amount of all then outstanding [Preferred
Trust] Securities.
"Officer's Certificate" means a certificate signed by the
Chairman or a Vice Chairman of the Board of Directors, the President, any Vice
President, the Treasurer, or any Assistant Treasurer of the Guarantor, and
delivered to the Guarantee Trustee. Any Officer's Certificate or Opinion of
Counsel delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer or counsel signing the
Officer's Certificate or the Opinion of Counsel 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 Officer's Certificate or the Opinion of Counsel;
(c) a statement that each such officer or counsel has made
such examination or investigation as, in such officer's or counsel's
opinion, is necessary to enable such officer or counsel 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 or counsel, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Guarantee Trustee or the Guarantor or an Affiliate of the
Guarantor, or an employee or any thereof, who shall be acceptable to the
Guarantee Trustee.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company, unincorporated organization or
government, or any agency or political subdivision thereof, or any other entity
of whatever nature.
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"Responsible Officer" means, with respect to the Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any senior trust
officer, any trust officer or assistant trust officer or any other officer in
the Corporate Trust Department of the Guarantee 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.
"Subordinated Indenture" means the Indenture dated as of
____________, ____, among the Guarantor, the Debenture Issuer and
______________________________, as trustee pursuant to which the Debentures are
issued, together with any indenture supplemental thereto.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
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 or deemed 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 Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.02 LISTS OF HOLDERS OF [PREFERRED TRUST]
SECURITIES.(a) The Guarantor shall furnish or cause to be furnished to
the Guarantee Trustee (a) semiannually, not later than ________ __ and
____ __ in each year, a list, in such form as the Guarantee 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 delivery
thereof, and (b) at such other times as the Guarantee 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 Guarantee Trustee by the Guarantor. 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 its obligations
under Section 311(a) of the Trust Indenture Act, subject to the
provisions of Section 311(b) of the Trust Indenture Act, and Section
312(b) of the Trust Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE.Within 60
days after each ____________, commencing ________________, the Guarantee Trustee
shall provide to the Holders such reports, if any, as are required by Section
313(a) of the Trust Indenture Act in the form and in the manner provided by
Section 313(a) of the Trust Indenture Act. Any such report shall be dated as of
the next preceding ____________. The Guarantee Trustee shall also comply with
the other requirements of Section 313 of the Trust Indenture Act.
SECTION 2.04 PERIODIC REPORTS TO 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
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the Trust Indenture Act and the compliance certificate required by Section
314(a)(4) of the Trust Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act, provided that such
compliance certificate shall be delivered annually on or before _________ in
each year, beginning _____________.
SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT.The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent provided for in this Guarantee
Agreement as and to the extent required by Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c) of the Trust Indenture Act may be given in the form of an
Officer's Certificate.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER.(a) The Holders of a
Majority in Liquidation Amount of [Preferred Trust] 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.
(b) The right of any Holder to receive payment of the
Guarantee Payments in accordance with this Guarantee Agreement, or to
institute suit for the enforcement of any such payment, shall not be
impaired without the consent of each such Holder.
SECTION 2.07 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,
a notice of such Event of Default known to the Guarantee Trustee,
unless such default shall have been cured or waived 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
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 of the Guarantee
Trustee charged with the administration of this Guarantee Agreement
shall have received written notice, in each case from the Guarantor or
a Holder, of such Event of Default.
SECTION 2.08 CONFLICTING INTERESTS.The Trust Agreement, the
Subordinated Indenture and the securities of any series issued thereunder
[OTHERS] 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 GUARANTEE TRUSTEE
SECTION 3.01 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 or any rights hereunder to any Person except a
Holder exercising his or her rights pursuant to Section 5.04 or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically
vest in any Successor Guarantee 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 Guarantee Trustee.
(b) The Guarantee Trustee, prior to 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 such duties
and only such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants or
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obligations shall be read into this Guarantee Agreement against the
Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.06), 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.
(c) 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, 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
a Majority in Liquidation Amount of the [Preferred Trust]
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; and
(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance
of any of its duties hereunder, 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,
reasonably satisfactory to the Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.(a)
Subject to the provisions of Section 3.01:
(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;
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(ii) any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be sufficiently
evidenced by an Officer's Certificate, or as otherwise
expressly provided 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 Officer's 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 counsel
of its choice, and the written advice or Opinion of Counsel
with respect to legal matters 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 Guarantee Trustee, the Guarantor or any of its
Affiliates and may include any 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 3.02(a)(v) shall be taken to relieve the Guarantee
Trustee, upon the occurrence and continuance of an Event of
Default, of its obligation under the last sentence of Section
3.01(b) 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 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 with due care by it 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 (1) may request instructions from the
Holders of a Majority in Liquidation Amount of the Preferred
Trust Securities, (2) may refrain from enforcing such remedy
or right or taking such other action until such instructions
are received, and (3) shall be protected in relying on or
acting in accordance with such instructions;
(ix) the Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument
(including any financing or continuation statement or any tax
or securities form) (or any rerecording, refiling or
re-registration thereof); and
(x) the Guarantee 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.
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(c) 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 or
authority.
SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
GUARANTEE.The recitals contained in this Guarantee Agreement shall be taken as
the statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 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 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 Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section
4.03(c).
(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 Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.02 COMPENSATION, REIMBURSEMENT AND INDEMNITY.The
Guarantor agrees to pay to the Guarantee Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), to reimburse the Guarantee Trustee upon request
for all reasonable expenses, disbursements and advances (including the
reasonable fees and expenses of its attorneys and agents) incurred or made by
the Guarantee Trustee in accordance with any provision of this Guarantee
Agreement and to indemnify each of the Guarantee Trustee and any predecessor
Guarantee Trustee for, and to hold it harmless against, any and all loss,
damage, claim, liability or expense, including taxes (other than taxes based
upon the income of the Guarantee Trustee) incurred without negligence, willful
misconduct or bad faith on its part, arising out of or in connection with the
acceptance of the trusts created by, or the 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 obligations of the Guarantor under this Section
shall survive the termination of this Guarantee Agreement and the resignation or
removal of the Guarantee Trustee.
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SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF
GUARANTEE TRUSTEE.(a) Subject to Section 4.03(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 by the Guarantor and has
accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office 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 4.02
within 60 days after delivery to the Guarantor of an instrument of
resignation or removal, the Guarantee Trustee resigning or being
removed may petition 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.
(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee 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 Issuer),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Issuer may have or assert. 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 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 Guarantee Trustee, Issuer 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 Issuer of any express or
implied agreement, covenant, term or condition relating to the
[Preferred Trust] Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
[Preferred Trust] Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the [Preferred Trust] Securities (other than an
extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results
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from the extension of any interest payment period on the Debentures
permitted by the Subordinated 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 Trust] Securities, or any action on the part of
the Issuer 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 Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
[Preferred Trust] 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
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 [Preferred
Trust] 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, provided, however,
that, subject to Section 3.01, the Guarantee Trustee shall have the right to
decline to follow any such direction if the Guarantee Trustee being advised by
counsel determines that the action so directed may not lawfully be taken, or if
the Guarantee Trustee in good faith shall, by a Responsible Officer or Officers
of the Guarantee Trustee, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the
rights of Holders not party to such direction, and provided further that nothing
in this Trust Agreement shall impair the right of the Guarantee Trustee to take
any action deemed proper by the Guarantee Trustee which is not inconsistent with
such direction; and (iv) any Holder may enforce this Guarantee Agreement, or
institute a legal proceeding directly against the Guarantor to enforce the
Guarantee Trustee's rights under this Guarantee Agreement without first
instituting a legal proceeding against the Issuer, the Guarantee Trustee, or any
other Person.
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 Debentures as provided in the
Trust Agreement.
SECTION 5.06 SUBROGATION.The Guarantor shall be subrogated
to all, if any, rights of the Holders against the Issuer 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.
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SECTION 5.07 INDEPENDENT OBLIGATIONS.The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the [Preferred Trust] 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.
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 guarantee of the Debentures, except those 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 stock of any Affiliate of the Guarantor, and (iii)
senior to all common stock of the Guarantor. [When a Debenture Event of Default
(as defined in the Trust Agreement) occurs and is continuing, the rights of
holders of the Common Trust Securities to payment in respect of Distributions
and payments upon liquidation, redemption or otherwise are subordinated to the
rights to payment of holders of Preferred Trust Securities.] Each Person, by
virtue of having become a Holder of a Security, shall be deemed to have
expressly assented and agreed to the terms of, and shall be bound by, this
Guarantee Agreement, the Trust Agreement and the Subordinated Indenture.
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 Trust] Securities, and all accrued and unpaid
Distributions to the date of redemption, (ii) the distribution of Debentures to
Holders in exchange for all of the [Preferred Trust] Securities, or (iii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer. 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 Trust] 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 Trust] Securities then
outstanding. Except in connection with a consolidation, merger or sale involving
the Guarantor that is permitted under Article Eleven of the Subordinated
Indenture and pursuant to which the assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder.
SECTION 8.02 AMENDMENTS.This Guarantee Agreement may be
amended only by an instrument in writing entered into by the Guarantor and the
Guarantee Trustee. 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 not less than a majority in aggregate Liquidation
Amount of all the outstanding [Preferred Trust] Securities. Any such consent
shall be deemed to be on behalf of the holders of all the [Preferred Trust]
Securities. The provisions of Article VI of the Trust Agreement concerning
meetings or consents 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:
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(a) if given to the Guarantor, to the address set forth below
or such other address or facsimile number or to the attention of such
other Person as the Guarantor may give notice of to the Guarantee
Trustee and the Holders of the Preferred Trust Securities:
Southwestern Electric Power Company
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Treasurer
(b) if given to the Issuer, in care of the Administrative
Trustees, at the Issuer's (and the Administrative Trustees') address
set forth below or such other address or facsimile number or to the
attention of such other Person as the Administrative Trustees on behalf
of the Issuer may give notice of to the Guarantee Trustee and the
Holders:
SWEPCo Capital Trust II
c/o Southwestern Electric Power Company
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address set
forth below or such other address or facsimile number or to the
attention of such other Person as the Guarantee Trustee may give notice
of to the Guarantor and the Holders of the Preferred Trust Securities:
------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ _____
Facsimile No: 212-___-____
Attention: ____________________
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer.
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 Trust Securities.
SECTION 8.05 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇ this Guarantee Agreement,
unless the context otherwise requires:
(a) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(b) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(c) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
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(d) 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;
(e) a reference to the singular includes the plural and vice
versa; and
(f) 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 LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 8.07 COUNTERPARTS.
This Guarantee Agreement 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.
SOUTHWESTERN ELECTRIC POWER COMPANY,
As Guarantor
By:
-----------------------------------------
Name:
Title:
------------------------------,
as Guarantee Trustee
By:
-----------------------------------------
Name:
Title:
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