Exhibit 4-J
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
---------------------------
177
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.
178
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
179
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
180
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.
181
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.
182
"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).
183
"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.
184
"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
185
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.
186
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.
187
(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
188
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.
189
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.
190
(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
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Treasurer
Telecopy: (000) 000-0000
(b) if given to the Guarantee Trustee, at the address or
telecopy number set forth below or such other address or telecopy
number as the Guarantee Trustee may give notice to the Guarantor
and Holders:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
with a copy to:
SCE&G Trust I
c/o South Carolina Electric & Gas Company
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Treasurer
Telecopy: (000) 000-0000
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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 COMPANY
By: s/X. X. Xxxxxx
Name: X. X. Xxxxxx
Title: Treasurer
