Document:

ex101.htm

ACQUISITION AGREEMENT

           This ACQUISITION AGREEMENT is entered into and made effective as of the 1st day of February, 2012 by and between Aquasil International Inc.,  a Nevada Corporation ("AQUS" or “Buyer”); and Oveldi Canada Ltd., a Canadian Corporation (“OVE or Seller”).

WHEREAS, Seller holds all rights and interest in and to certain intellectual property for EviCAT© (the “IP”) and upon the terms and conditions set forth below, Seller desires to sell and transfer all of the rights in and to such IP owned by Seller to Buyer, such that, following such transaction, Buyer will hold all rights and interest in and to the IP; and

                            NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the Parties hereto agree as follows:

1.    SALE AND PURCHASE OF IP.

1.1           PURCHASE.  Subject to the terms and conditions herein set forth, AQUS hereby agrees to purchase and Seller hereby agrees to sell and transfer all rights and interest in and to the IP, more particularly described on Schedule A hereto, to AQUS.

1.2 CONSIDERATION.  The consideration for the sale and transfer of the IP from Seller to AQUS shall be:

1.2.1         Share Consideration.  The share consideration to be issued to OVE upon the Closing of the acquisition by way of the transfer of the IP to AQUS or its designated assignee shall be 14,000,000  shares of the common stock of AQUS.

1.2.2 Appointment of Directors and Officers.  At Closing, AQUS shall appoint one representative of OVE as the sole officer and a director AQUS.

2.  REPRESENTATIONS AND WARRANTIES

2.1           REPRESENTATIONS AND WARRANTIES OF Seller.

Seller represents and warrants as follows:

a)        CORPORATE ORGANIZATION AND GOOD STANDING.  OVE is duly organized, validly existing, and in good standing under the laws of the country of Barbados and is qualified to do business as a foreign corporation in each jurisdiction, if any, in which its property or business requires such qualification.

b)         CORPORATE AUTHORITY.  OVE has all requisite corporate power and authority to own, operate and lease its properties, to carry on its business as it is now being conducted and to execute, deliver, perform and conclude the transactions contemplated by this Agreement and all other agreements and instruments related to this Agreement.

  

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                 c)        AUTHORIZATION.  Execution of this Agreement has been duly authorized and approved by OVE.

 

                d)           OBLIGATIONS RELATING TO THE IP.  OVE has no contract or other obligation other than those disclosed on Schedule B appended hereto, which agreements shall be transferred to AQUS, in regard to any rights, interests, licensing or any other agreements relating to the IP.  There are no outstanding options, rights, or other commitments or agreements of any character relating to the IP.

 

        e)        LITIGATION.  To the knowledge of OVE, there are no pending, threatened, or existing litigation, bankruptcy, criminal, civil, or regulatory proceeding or investigation, threatened or contemplated against OVE which, if decided adversely to OVE, would impose any rights or interest or judgment against the IP.

 

        f)   COMPLIANCE WITH APPLICABLE LAW AND REGULATORY MATTERS. OVE has complied with all applicable laws and regulations, and are not in violation of, and have not received any written notices of violation with respect to, any laws and regulations in connection with the conduct of their respective businesses or the ownership or operation of their respective businesses, assets and properties, in regard to the IP.

 

 OVE has all licenses, permits, certificates, franchises and other authorizations (collectively, the “Authorizations”) necessary for the ownership or use of its IP and the conduct of its business, as currently conducted, and have complied with, and are not in violation of, any Authorization.  All such Authorizations are in full force and effect and there are no proceedings pending or, to the knowledge of OVE, threatened that seek the revocation, cancellation, suspension or adverse modification thereof.

 

g)    MATERIAL CONTRACTS.  There are no material contracts of OVE currently in existence in relation to the IP except as disclosed in a Schedule hereto.

 

 h)  INTERESTS OF OFFICERS AND DIRECTORS.  Except as disclosed herein, none of the officers or directors of OVE has any interest in the IP.

 

i)  BROKER’S FEES.  OVE has not employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the transactions contemplated by this Agreement.

 

j)  CERTAIN BUSINESS PRACTICES.  No director, officer, agent or employee of OVE has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity on behalf of, or purportedly on behalf of, or for the business of OVE, or (ii) made any unlawful payments to officials or employees of governmental entities or to directors, officers or employees of foreign or domestic business enterprises.

 

  

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2.2           REPRESENTATIONS AND WARRANTIES OF BUYER. The Buyer represents and warrants as follows:

     a)       CORPORATE ORGANIZATION AND GOOD STANDING.  Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada, and is qualified to do business as a foreign corporation in each jurisdiction, if any, in which its property or business requires such qualification.

 

      b)              CORPORATE AUTHORITY.  Buyer has all requisite corporate power and authority to execute, deliver, perform and conclude the transactions contemplated by this Agreement and all other agreements and instruments related to this Agreement.

 

                      c)               NO VIOLATION.  Consummation of the acquisition contemplated herein will not constitute or result in a breach or default under any provision of any charter, bylaw, indenture, mortgage, lease, or agreement, or any order, judgment, decree, law, or regulation by which Buyer is bound.

 

      d)   REPORTING STATUS. Buyer is a fully reporting public company under Section 15(d) of the Securities and Exchange Act of 1934, and is current on its filing obligations under Section 15.  Buyer has filed all required periodic reports with the Securities & Exchange Commission (the "Commission") on Forms 10-Q and 10-K through the fiscal year ended December 31, 2010 and for the nine months ended September 30, 2011, and all required Form 8-K reports, all such reports are true and correct in all material respects and contain no misrepresentation of a material fact or omission of a material fact.  The common shares of Buyer are quoted  on the OTC Markets OTCqb under the symbol "AQUS".    Buyer has not received and there are no outstanding Commission Staff comment letters, stop orders or other regulatory actions, and no letters, comments, investigations or other actions pending or threatened by the Commission or by the Financial Industry Regulatory Authority (FINRA) against or relating to Buyer and there are no outstanding fees, fines or other amounts due to FINRA, the SEC, PCAOB or any other regulatory agency..

 

      e)    CAPITALIZATION.

 

(i) On the date of this Agreement, 500,000,000 shares of $0.0001 par value common stock are authorized and 149,498,349 shares of common stock of Buyer are issued and outstanding, all of the shares of common stock issued are duly authorized, validly issued, fully paid and non-assessable and none were issued in violation of any preemptive rights.  On the date of this Agreement 20,000,000 shares of preferred  stock, $0.0001 par value, of Buyer are authorized and no shares of preferred stock are issued and outstanding. (ii) no shares of Buyer are reserved for issuance upon the exercise of outstanding options, warrants or other rights to purchase shares; and (iii) no shares of Buyer stock are held in the treasury of Buyer.  Except as set forth above, as of the date hereof, no shares or other voting securities of Buyer are issued, reserved for issuance or outstanding.  Buyer has advised Seller that the Company may effect a reverse split of its common shares issued and outstanding and that additional shares may be issued to settle outstanding liabilities of Buyer.  There are no bonds, debentures, notes or other indebtedness or securities of Buyer that have the right to vote (or that are convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of

 

  

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Buyer may vote.  All shares of Buyer subject to issuance as described above shall, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, be duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights.

 

(ii) Buyer has no contract or other obligation to repurchase, redeem or otherwise acquire any shares of Buyer stock, or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person.  There are no outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements of any character relating to the issued or unissued shares or other securities of Buyer.  None of the outstanding equity securities or other securities of Buyer was issued in violation of the Securities Act of 1933 or any other legal requirement.

 

	
f)  

	
  AUTHORITY; NO VIOLATION.

 

                                    (i) Buyer has full corporate power and authority to execute and deliver this Agreement and to comply with the terms hereof and consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by Buyer.  Assuming due authorization, execution and delivery by the other Parties, this Agreement constitutes the valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforcement may be limited by (i) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship, arrangement, moratorium or other similar laws affecting or relating to the rights of creditors generally, or (ii) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether considered in a proceeding in equity or at law, or (iii) the specific terms and conditions of this Agreement.

 

                                           (ii) Neither the execution and delivery of this Agreement by Buyer nor the consummation by Buyer of the transactions contemplated hereby, nor compliance by Buyer with any of the terms or provisions hereof, will (A) violate any provision of the Certificate of Registration or Constitution or the certificates of registration or constitution, or other charter or organizational documents, of Buyer or (B) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to Buyer or any of its properties or assets, the violation of which would have a material adverse effect, or (C) violate, conflict with, result in a breach of any provision of or the loss of any material benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of any or all rights or benefits or a right of termination or cancellation under, accelerate the performance required by or rights or obligations under, increase any rate of interest payable or result in the creation of any lien upon any of the respective properties or assets of Buyer under, any authorization or of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement, contract, or other instrument or obligation to which is a party, or by which its properties, assets or business activities may be bound or affected.

 

  

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g)  

	
  FINANCIAL STATEMENTS.

 

                                          (i) Seller acknowledges that all financial statements filed with the SEC are available to Seller to view prior to the Closing Date, and Buyer confirms such financial statements are true and complete copies of the unaudited and audited financial statements of Buyer as filed with the SEC as at the Closing Date. (the “Buyer Financial Statements”).

 

                                                 (ii) The Buyer Financial Statements were prepared in accordance with  GAAP or the equivalent applied on a basis consistent throughout the periods indicated (except as otherwise stated in such financial statements, including the related notes, and except that, in the case of unaudited statements for the subsequent quarterly periods referenced above, such unaudited statements fairly present in all material respects the consolidated financial condition and the results of operations of Buyer as at the respective dates thereof and for the periods indicated therein (subject, in the case of unaudited statements, to year-end audit adjustments).

 

h) ABSENCE OF CERTAIN CHANGES OR EVENTS.  Since the end of its most recent fiscal year and to the date of this Agreement, (i) Buyer has, in all material respects, conducted its business in the ordinary course consistent with past practice; (ii) there has not occurred any change, event or condition that is or would reasonably be expected to result in a material adverse effect; and (iii)  Buyer has not taken and will not take any of the actions that Buyer has agreed not to take from the date hereof through the Closing.

 

i) UNDISCLOSED LIABILITIES.  Buyer has no material obligations or liabilities of any nature (whether accrued, matured or unmatured, fixed or contingent or otherwise) other than (i) those set forth or adequately provided for in the balance sheet (and the related notes thereto) of Buyer as of the end of the most recent fiscal year  included in the Buyer Financial Statements, (ii) those incurred in the ordinary course of business consistent with past practice since the end of the most recent fiscal year  and (iii) those incurred in connection with the execution of this Agreement.

 

j) LEGAL PROCEEDINGS.  Buyer is not a party to any, and there is no pending or, to the knowledge of Buyer, threatened, legal, administrative, arbitral or other proceeding, claim, action or governmental or regulatory investigation of any nature against Buyer, or any of its officers or directors which, if decided adversely to Buyer, would, individually or in the aggregate, be material to Buyer.  There is no injunction, order, judgment or decree imposed upon Buyer, or any of its officers or directors, or the assets of Buyer.

 

k) TAXES AND TAX RETURNS.

 

(a) (i) Buyer shall file or caused to be filed all  federal, state, foreign and local tax returns required to be filed with any tax authority; (ii) all such tax returns shall be true, accurate, and complete in all material respects; (iii) Buyer shall pay or caused to be paid all taxes that are due and payable by any of such companies, other than taxes which are being contested in good faith and are adequately reserved against or provided for (in accordance with  GAAP) in the Buyer Financial Statements, and (iv) Buyer shall  not have any material liability for taxes for any current or prior tax periods in excess of the amount reserved or

 

  

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(b) provided for in the Buyer Financial Statements (but excluding, for this Clause (iv) only, any liability reflected thereon for deferred taxes to reflect timing differences between tax and financial accounting methods).

 

                                 a) No national, state, local or foreign audits, examinations, investigations, or other formal proceedings are pending or, to Buyer’s knowledge, threatened with regard to any taxes or tax returns of Buyer.  No issue has arisen in any examination of the Buyer by any tax authority that if raised with respect to any other period not so examined would result in a material deficiency for any other period not so examined, if upheld.  Any adjustment of income taxes of Buyer made in any examination that is required to be reported to the appropriate national, state, local or foreign tax authorities has been so reported.

 

                        b) There are no disputes pending with respect to, or claims or assessments asserted in writing for, any material amount of taxes upon Buyer, nor has Buyer given or been requested in writing to give any currently effective waiver extending the statutory period of limitation applicable to any tax return for any period.

 

l) COMPLIANCE WITH APPLICABLE LAW AND REGULATORY MATTERS.

 

                     (a) Buyer has complied with all applicable laws and regulations, and are not in violation of, and have not received any written notices of violation with respect to, any laws and regulations in connection with the conduct of their respective businesses or the ownership or operation of their respective businesses, assets and properties, except for such noncompliance and violations as would not, individually or in the aggregate, be material.

 

                              (b)   Buyer has all licenses, permits, certificates, franchises and other authorizations (collectively, the “Authorizations”) necessary for the ownership or use of its assets and properties and the conduct of its business, as currently conducted, and have complied with, and are not in violation of, any Authorization, except where such noncompliance or violation would not, individually or in the aggregate, be material.  Except as would not be material to Buyer, all such Authorizations are in full force and effect and there are no proceedings pending or, to the knowledge of Buyer, threatened that seek the revocation, cancellation, suspension or adverse modification thereof.

 

  

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m) GOVERNMENT ORDERS. There are no governmental orders applicable to Buyer which have had a Material Adverse Effect on Buyer.

 

n)  MATERIAL CONTRACTS.  There are no material contracts of Buyer currently in existence, save for those disclosed in the financial statements of Buyer.

 

o) ASSETS.  Buyer owns, leases or has the right to use all the properties and assets necessary or currently used for the conduct of its businesses free and clear of all liens of any kind or character.  All items of equipment and other tangible assets owned by or leased to Buyer and which are material to the operations and business of Buyer are in good condition and repair (ordinary wear and tear excepted).  In the case of leased equipment and other tangible assets, Buyer holds valid leasehold interests in such leased equipment and other tangible assets, free and clear of all liens of any kind or character.

 

p) ENVIRONMENTAL LIABILITY.  Buyer is in compliance with all applicable environmental laws.  To the knowledge of Buyer, there are no liabilities of Buyer of any kind, whether accrued, contingent, absolute, determined, determinable or otherwise arising under or relating to any environmental law and, to the knowledge of Buyer, there are no facts, conditions, situations or set of circumstances that could reasonably be expected to result in or be the basis for any such liability.

 

q) INSURANCE.  Buyer has no insurance coverage with respect to its business.

 

r) INTERESTS OF OFFICERS AND DIRECTORS.  Except AS DISCLOSED HEREIN, None of the officers or directors of Buyer has any interest in any property, real or personal, tangible or intangible, including intellectual property, used in or developed by the business of Buyer, or in any supplier, distributor or customer of Buyer, or any other relationship, contract, agreement, arrangement or understanding with Buyer, except  for the normal ownership interests of a shareholder and employee rights.

 

s) BROKER’S FEES.  Buyer has not employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the transactions contemplated by this Agreement.

 

t) CERTAIN BUSINESS PRACTICES.  No director, officer, agent or employee of Buyer has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity on behalf of, or purportedly on behalf of, or for the business of Buyer, or (ii) made any unlawful payments to officials or employees of governmental entities or to directors, officers or employees of foreign or domestic business enterprises.

 

3.  CONDITIONS PRECEDENT

3.1           Conditions to Each Party’s Obligations. The respective obligations of each Party hereunder shall be subject to the satisfaction prior to or at the Closing of the following conditions:

  

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    a)        No Restraints. No statute, rule, regulation, order, decree, or injunction shall have been enacted, entered, promulgated, or enforced by any court or governmental entity of competent jurisdiction which enjoins or prohibits the consummation of this Agreement and shall be in effect.

    b)        Legal Action. There shall not be pending or threatened in writing any action, proceeding, or other application before any court or governmental entity challenging or seeking to restrain or prohibit the consummation of the transactions contemplated by this Agreement, or seeking to obtain any material damages.

3.2           Conditions to Seller’s Obligations. The obligations of Seller to close shall be subject to the satisfaction prior to or at the Closing of the following conditions unless waived by Seller:

    a)        Representatives and Warranties of Buyer. The representations and warranties of Buyer set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing as though made on and as of the Closing, except: (i) as otherwise contemplated by this Agreement; or (ii) in respects that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement. “Material Adverse Effect” for purposes of this Agreement shall mean any change or effect that, individually or when taken together with all other such changes or effects which have occurred prior to the date of determination of the occurrence of the Material Adverse Effect, is or is reasonably likely to be materially adverse to the business, assets, financial condition, or results of operation of the entity.

    b)        Performance of Obligations of Buyer. Buyer shall have performed all agreements and covenants required to be performed by it under this Agreement prior to the Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.

 

    c)        Buyer shall have appointed a representative of Seller to the Board of Directors of Buyer and as the sole Officer of Buyer.

3.3           Conditions to Buyer’s Obligations. The obligations of Buyer shall be subject to the satisfaction prior to or at the Closing of the following conditions unless waived by Buyer:

a) Representatives and Warranties of OVE. The representations and warranties of OVE set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing as though made on and as of the Closing, except: (i) as otherwise contemplated by this Agreement, or (ii) in respects that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.

b)      Performance of Seller. Seller shall have performed all agreements and covenants required to be performed by them under this Agreement prior to Closing, except for breaches that do not have a Material Adverse Effect on the Parties or on the benefits of the transactions provided for in this Agreement.

  

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4. CLOSING AND DELIVERY OF DOCUMENTS

4.1           Time and Place. The Closing of the transaction contemplated by this Agreement shall take place at the offices of AQUS, unless otherwise agreed by the Parties, immediately upon the full execution of this Agreement, and the satisfaction of all conditions, specifically the delivery of all required documents, or at such other time and place as the Parties mutually agree.  All proceedings to be taken and all documents to be executed at the Closing shall be deemed to have been taken, delivered and executed simultaneously, and no proceeding shall be deemed taken nor documents deemed executed or delivered until all have been taken, delivered and executed.  The date of Closing may be accelerated or extended by agreement of the parties.

Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission required by this Agreement or any signature required thereon may be used in lieu of an original writing or transmission or signature for any and all purposes for which the original could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission or original signature.

4.2           Deliveries by Seller. At Closing, Seller shall make the following deliveries to Buyer:

a)        Certified resolutions of the Board of Directors of Seller authorizing the execution and performance of this Agreement.

b)        Such documents as may be required to transfer the IP to buyer and any related contracts or agreements in regard to the IP.

4.3           Deliveries by Buyer. At Closing, Buyer shall make the following deliveries to Seller:

    a) Stock certificates representing the AQUS Common Shares issued in the name of Seller or its designee;

   

b) Certified resolutions of the Board of Directors of Buyer authorizing the execution and performance of this Agreement.

c) Certified resolutions of the Board of Directors of Buyer appointing the designees of Seller as directors and officers of Buyer at Closing along with resignations of the existing officers of Buyer effective at Closing.

5.  INDEMNIFICATION AND ARBITRATION

5.1.           Indemnification. The Seller, on the one hand, and the Buyer, on the other hand, (each party, “Indemnifying Party”) shall agree to indemnify, and hold harmless the other party (“Indemnified Party”) from any and all claims, demands, liabilities, damages, losses, costs and expenses that the other party shall incur or suffer, including attorneys fees and costs, that arise, result from or relate to any breach of, or failure by Indemnifying Party to perform any of their respective representations, warranties, covenants, or agreements in this Agreement or in any exhibit, addendum, or any other instrument furnished by the Indemnifying Party under this Agreement.

  

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5.2           Arbitration and Governing Law. The parties hereby agree that any and all claims (except only for requests for injunctive or other equitable relief) whether existing now, in the past or in the future as to which the parties or any affiliates may be adverse parties, and whether arising out of this Agreement or from any other cause, will be resolved by arbitration before the American Arbitration Association within the State of Nevada.

a)        The parties hereby irrevocably consent to the jurisdiction of the American Arbitration Association and the situs of the arbitration (and any requests for injunctive or other equitable relief) within the State of Nevada.  Any award in arbitration may be entered in any domestic or foreign court having jurisdiction over the enforcement of such awards.

b)        The law applicable to the arbitration and this Agreement shall be that of the State of Nevada, determined without regard to its provisions which would otherwise apply to a question of conflict of laws.

c)        The arbitrator may, in its discretion, allow the parties to make reasonable disclosure and discovery in regard to any matters which are the subject of the arbitration and to compel compliance with such disclosure and discovery order.  The arbitrator may order the parties to comply with all or any of the disclosure and discovery provisions of the Federal Rules of Civil Procedure, as they then exist, as may be modified by the arbitrator consistent with the desire to simplify the conduct and minimize the expense of the arbitration.

d)   Regardless of any practices of arbitration to the contrary, the arbitrator will apply the rules of contract and other law of the jurisdiction whose law applies to the arbitration so that the decision of the arbitrator will be, as much as possible, the same as if the dispute had been determined by a court of competent jurisdiction.

e)   Any award or decision by the American Arbitration Association shall be final, binding and non-appealable except as to errors of law or the failure of the arbitrator to adhere to the arbitration provisions contained in this agreement.  Each party to the arbitration shall pay its own costs and counsel fees except as specifically provided otherwise in this agreement.

f)   In any adverse action, the parties shall restrict themselves to claims for compensatory damages and/or securities issued or to be issued and no claims shall be made by any party or affiliate for lost profits, punitive or multiple damages.

g)  The parties covenant that under no conditions will any party or any affiliate file any action against the other (except only requests for injunctive or other equitable relief) in any forum other than before the American Arbitration Association, and the parties agree that any such action, if filed, shall be dismissed upon application and shall be referred for arbitration hereunder with costs and attorney's fees to the prevailing party.

h)  It is the intention of the parties and their affiliates that all disputes of any nature between them, whenever arising, whether in regard to this agreement or any other matter, from whatever cause, based on whatever law, rule or regulation, whether statutory or common law, and however characterized, be decided by arbitration as provided herein and that no party or affiliate be required to litigate in any other forum any disputes or other matters except for requests for injunctive or equitable relief. This agreement shall be interpreted in conformance with this stated intent of the parties and their affiliates.

The provisions for arbitration contained herein shall survive the termination of this agreement for any reason.

 

 

  

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6.  GENERAL PROVISIONS.

6.1           FURTHER ASSURANCES.  From time to time, each party will execute such additional instruments and take such actions as may be reasonably required to carry out the intent and purposes of this Agreement.

6.2           WAIVER.  Any failure on the part of either party hereto to comply with any of its obligations, agreements, or conditions hereunder may be waived in writing by the party to whom such compliance is owed.

6.3           BROKERS.  Each party agrees to indemnify and hold harmless the other party against any fee, loss, or expense arising out of claims by brokers or finders employed or alleged to have been employed by the indemnifying party.

6.4           NOTICES.  All notices and other communications hereunder shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, as follows:

If to Seller to:

James D. Brooks

952 N. Western Avenue

Los Angeles, California 90029

North America: 1-877-744-7090

Canada: 1-403-616-1617

James D. Brooks [james.brooks@kardings.com]

 

 

If to Buyer, to:

Bob Baker

c/o Baker Plumbing & Heating Ltd.

Bay #20, 4216 - 64th Ave SE

Calgary, AB T2C 2B3

Office (403)279-7554, Cell (403)200-4342, Fax (403)251-7388

R Baker [rbaker@bakerplumbing.ca]

 

  

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The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid. If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of such delivery provided a receipt is obtained from the recipient. If notice is given by mail, such notice shall be deemed given upon receipt and delivery or refusal.

6.5           ASSIGNMENT.  This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their successors and assigns; provided, however, that any assignment by either party of its rights under this Agreement without the written consent of the other party shall be void.

6.6           COUNTERPARTS.  This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Signatures sent by facsimile transmission shall be deemed to be evidence of the original execution thereof.

6.7           REVIEW OF AGREEMENT.  Each party acknowledges that it has had time to review this agreement and, as desired, consult with counsel.  In the interpretation of this Agreement, no adverse presumption shall be made against any party on the basis that it has prepared, or participated in the preparation of, this Agreement.

6.8           SCHEDULES.  All schedules attached hereto, if any, shall be acknowledged by each party by signature or initials thereon.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

AQUASIL INTERNATIONAL INC.

                                                                 

Name:

ITS: CEO

OVELDI CANADA LTD.

 

BY:                                                       

                    Name:

ITS: CEO

  

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SCHEDULE “A” –  PRODUCT INFORMATION

 

Oveldi’s intellectual property consists of its brand, its website and domain and of a proprietary software application called EviCAT©. Here is a description of the software suite. A comprehensive description is available here:

http://www.oveldi.com/evicat/demo/

Advanced production line monitoring and tracking software that integrates into existing manufacturing technology.

 

EviCAT provides comprehensive production monitoring and shipment tracking in real time. EviCAT was developed in response to the poor communications standards that have existed in the manufacturing and shipping industries for far too long, and is now setting a new standard for communications between manufacturers and their customers, in effect removing the guesswork that is so often part of the manufacturing/shipping equation. EviCAT provides user-specific and comprehensive manufacturing and tracking technology that easily integrates with existing production and shipping information systems. With EviCAT, Oveldi provides manufacturers and their clients with critical information when and where they need it. In today's manufacturing and shipping industries, important information about production orders, like where a product is in its manufacturing or shipping cycle, is not nearly as comprehensive as it should be. There are a number of reasons for this, but none that mitigates the importance of having this information available on demand. EviCAT changes all this.

 

With EviCAT, any relevant company personnel involved with a manufacturing/distribution cycle can log onto Oveldi's secure server and see just where their product is: still in production, sitting on a dock, or halfway across the ocean. On the one hand, this information provides importers with unbeatable inventory management capabilities, while on the other it gives manufacturers a value-added communications tool they can offer their clients.

 

Oveldi's EviCAT technology also provides many other important benefits for our clients.

 

Manufacturers

-Reduces costs 

-Offers scalability for any new manufacturing requirements 

-Easily integrates with existing operational systems 

-Maximizes production efficiency by providing key information at different points in a manufacturing cycle 

 

Importers

-Provides unbeatable inventory management capability 

-Delivers secure 'real-time' accountability 

-Integrates with all North American security protocols 

-Offers user-specific logistics and tracking models 

 

Simply put, Oveldi's EviCAT application is setting the new standard for international distribution services. From the moment a product is born on a manufacturing assembly line, to the time it spends in transit, to the moment its journey ends, EviCAT keeps everyone informed, every step of the way.

  

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SCHEDULE “B” – OVE MATERIAL CONTRACTS

The owner discloses one sole material contract licensing EviCAT© to its Hong Kong subsidiary, Oveldi International Ltd. from the owner of the software, Oveldi Ltd. (Barbados).

Included in schedule “B” are an assignment of ownership from Oveldi Ltd. (Barbados) to Oveldi Canada Ltd. as well as a release from Oveldi International Ltd. terminating its interested in the software known as EviCAT©.

  

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SOUTHWESTERN ELECTRIC POWER COMPANY

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

AS TRUSTEE

___________________

NINTH SUPPLEMENTAL INDENTURE

Dated as of February 1, 2012

Supplemental to the Indenture

dated as of February 25, 2000

3.55% Senior Notes, Series I, due 2022

  

  

  

 

NINTH SUPPLEMENTAL INDENTURE, dated as of February 1, 2012, between SOUTHWESTERN ELECTRIC POWER COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (the “Company”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association formed under the laws of the United States, as Trustee under the Original Indenture referred to below (the “Trustee”).

RECITALS OF THE COMPANY

The Company has heretofore executed and delivered to the Trustee an indenture dated as of February 25, 2000 (the “Original Indenture”), to provide for the issuance from time to time of its debentures, notes or other evidences of indebtedness (the “Senior Notes”), the form and terms of which are to be established as set forth in Section 201 and 301 of the Original Indenture.

Section 901 of the Original Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of establishing the form and terms of the Senior Notes of any series as permitted in Sections 201 and 301 of the Original Indenture.

The Company desires to create a series of the Senior Notes in an aggregate principal amount of $275,000,000 to be designated the “3.55% Senior Notes, Series I, due 2022” (the “Series I Notes”), and all action on the part of the Company necessary to authorize the issuance of the Series I Notes under the Original Indenture and this Ninth Supplemental Indenture has been duly taken.

All acts and things necessary to make the Series I Notes, when executed by the Company and completed, authenticated and delivered by the Trustee as provided in the Original Indenture and this Ninth Supplemental Indenture, the valid and binding obligations of the Company and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed.

NOW, THEREFORE, THIS NINTH SUPPLEMENTAL INDENTURE WITNESSETH:

That in consideration of the premises and of the acceptance and purchase of the Series I Notes by the Holders thereof and of the acceptance of this trust by the Trustee, the Company covenants and agrees with the Trustee, for the equal benefit of the Holders of the Series I Notes, as follows:

  

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ARTICLE ONE

Definitions

SECTION 101.                                Definitions.

The use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture and the form of the Series I Note attached hereto as Exhibit A.

ARTICLE TWO

Terms and Issuance of the Series I Notes

SECTION 201.                                Issue of Series I Notes.

A series of Senior Notes which shall be designated the “3.55%  Senior Notes, Series I, due 2022” shall be executed, authenticated and delivered from time to time in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of, the Original Indenture and this Ninth Supplemental Indenture (including the form of Series I Note set forth in Exhibit A hereto).  The aggregate principal amount of the Series I Notes which may be authenticated and delivered under this Ninth Supplemental Indenture shall initially be $275,000,000, and such principal amount of the Series I Notes may be increased from time to time.  All Series I Notes need not be issued at the same time and such series may be reopened at any time, without the consent of any Holder, for the issuance of additional Series I Notes.  Any such additional Series I Notes will have the same interest rate, maturity and other terms as those initially issued.

SECTION 202.                                Form of Series I Notes; Incorporation of Terms.

The Series I Notes shall be issued initially in the form of one Global Security.  The form of the Series I Notes shall be substantially in the form of the Global Security attached hereto as Exhibit A.  The terms of such Series I Notes are herein incorporated by reference and are part of this Ninth Supplemental Indenture.

SECTION 203.                                Depositary for Global Securities.

The Depositary for any Global Securities of the series of which this Series I Note is a part shall be The Depository Trust Company in The City of New York.

SECTION 204.                                Restrictions on Liens.

The covenant contained in Section 1007 of the Original Indenture shall not be applicable to the Series I Notes.

So long as any of the Series I Notes are outstanding, the Company will not create or suffer to be created or to exist any additional mortgage, pledge, security interest, or other lien (collectively “Liens”) on any of its utility properties or tangible assets now owned or hereafter 

  

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acquired to secure any indebtedness for borrowed money (“Secured Debt”), without providing that the Series I Notes will be similarly secured.  This restriction does not apply to the Company's subsidiaries, nor will it prevent any of them from creating or permitting to exist Liens on their property or assets to secure any Secured Debt.  In addition, this restriction does not prevent the creation or existence of:

	  	
(a)

	
Liens on property existing at the time of acquisition or construction of such property (or created within one year after completion of such acquisition or construction), whether by purchase, merger, construction or otherwise, or to secure the payment of all or any part of the purchase price or construction cost thereof, including the extension of any Liens to repairs, renewals, replacements, substitutions, betterments, additions, extensions and improvements then or thereafter made on the property subject thereto;

	  	  	  
	  	
(b)

	
Financing of the Company's accounts receivable for electric service;

	  	  	  
	  	
(c)

	
Any extensions, renewals or replacements (or successive extensions, renewals or replacements), in whole or in part, of liens permitted by the foregoing clauses; and

	  	  	  
	  	
(d)

	
The pledge of any bonds or other securities at any time issued under any of the Secured Debt permitted by the above clauses.

In addition to the permitted issuances above, Secured Debt not otherwise so permitted may be issued in an amount that does not exceed 15% of Net Tangible Assets as defined below.

“Net Tangible Assets” means the total of all assets (including revaluations thereof as a result of commercial appraisals, price level restatement or otherwise) appearing on the Company’s balance sheet, net of applicable reserves and deductions, but excluding goodwill, trade names, trademarks, patents, unamortized debt discount and all other like intangible assets (which term shall not be construed to include such revaluations), less the aggregate of the Company’s current liabilities appearing on such balance sheet.  For purposes of this definition, the Company’s balance sheet does not include assets and liabilities of its subsidiaries.

This restriction also does not apply to or prevent the creation or existence of leases made, or existing on property acquired, in the ordinary course of business.

SECTION 205.                                Place of Payment.

The Place of Payment in respect of the Series I Notes will be at the principal office or place of business of the Trustee or its successor in trust under the Indenture, which, at the date hereof, is located at 2 North LaSalle Street, Chicago, IL  60602, Attention: Corporate Trust Administration.

  

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SECTION 206.           Optional Redemption.

The Series I Notes may be redeemed at the Company’s option at any time upon no more than 60 and not less than 30 days’ notice by mail.  At any time prior to November 15, 2021, the Series I Notes may be redeemed either as a whole or in part at a redemption price equal to the greater of (1) 100% of the principal amount of the Series I Notes being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Series I Notes being redeemed (excluding the portion of any such interest accrued to the date of redemption) discounted (for purposes of determining present value) to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 30 basis points, plus, in each case, accrued interest thereon to the date of redemption.  At any time on or after November 15, 2021, the Series I Notes may be redeemed at the Company’s option in whole or in part at 100% of the principal amount of the Series I Notes being redeemed, plus accrued interest thereon to the date of redemption.

“Business Day” means any day that is not a day on which banking institutions in New York City are authorized or required by law or regulation to close.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“remaining life”) of the Series I Notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining life of the Series I Notes.

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company and reasonably acceptable to the Trustee.

“Reference Treasury Dealer” means each of J.P. Morgan Securities LLC, UBS Securities LLC, and a Primary Treasury Dealer (defined herein) selected by Wells Fargo Securities, LLC, and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. government securities dealer in the United States (a “Primary Treasury Dealer”), the Company will substitute therefor another Primary Treasury Dealer reasonably acceptable to the Trustee.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at or before 3:30 p.m., New York City time, on the third Business Day preceding such redemption date.

“Treasury Rate” means, with respect to any redemption,  (i) the yield, under the heading 

  

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which represents the average for the week immediately preceding the date on which the notice of redemption is mailed to the registered holders of the securities (the “calculation date”) appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining life (as defined above), yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

SECTION 207.            Sinking Funds.

Article Twelve of the Indenture shall not apply to the Series I Notes.

SECTION 208.           Regular Record Date.

The “Regular Record Date” will be the February 1 or August 1, as the case may be, next preceding an interest payment date (whether or not a Business Day).

 

ARTICLE THREE

 

Miscellaneous

SECTION 301.                                Execution as Supplemental Indenture.

This Ninth Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Ninth Supplemental Indenture forms a part thereof.

SECTION 302.                                Conflict with Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Ninth Supplemental Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

SECTION 303.                                Effect of Headings.

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

  

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SECTION 304.                                Successors and Assigns.

All covenants and agreements by the Company in this Ninth Supplemental Indenture shall bind its successors and assigns, whether so expressed or not.

SECTION 305.                                Separability Clause.

In case any provision in this Ninth Supplemental Indenture or in the Series I Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 306.                                Benefits of Ninth Supplemental Indenture.

Nothing in this Ninth Supplemental Indenture or in the Series I Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Ninth Supplemental Indenture.

SECTION 307.                                Execution and Counterparts.

This Ninth Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

  

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IN WITNESS WHEREOF, the parties hereto have caused this Ninth Supplemental Indenture to be duly executed and attested, all as of the day and year first above written.

SOUTHWESTERN ELECTRIC POWER COMPANY

By:           /s/ Renee V. Hawkins

Name:         Renee V. Hawkins

Title:           Assistant Treasurer

Attest:

/s/ Thomas G. Berkemeyer

Name:        Thomas G. Berkemeyer

Title:           Assistant Secretary

THE BANK OF NEW YORK MELLONTRUST COMPANY, N.A., as Trustee

By:  /s/ Richard Tarnas

Authorized Signatory

Attest:

/s/ Linda Garcia

Authorized Signatory

  

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EXHIBIT A

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

 

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Southwestern Electric Power Company or its agent for registration of transfer, exchange or payment, and any definitive certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein.

 

No. R-1

SOUTHWESTERN ELECTRIC POWER COMPANY

3.55% Senior Notes, Series I, due 2022

CUSIP No.845437 BM3                                                                                                                                      $275,000,000

SOUTHWESTERN ELECTRIC POWER COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum of TWO HUNDRED-SEVENTY FIVE MILLION DOLLARS ($275,000,000) on February 15, 2022 (the “Final Maturity”), and to pay interest thereon from February 3, 2012 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on February 15 and August 15 each year, commencing August 15, 2012, at the interest rate per annum specified above, until the principal amount shall have been paid or duly provided for.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the February 1 or August 1 (whether or not a Business Day) immediately preceding the Interest Payment Date.  Any such interest not so 

 

  

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punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

Payment of the principal of (and premium, if any) and interest on this Security will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, New York, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

This Security has initially been issued in the form of a Global Security, and the Company has initially designated The Depository Trust Company (the “Depositary”, which term shall include any successor depositary) as the depositary for this Security.  For as long as this Security or any portion hereof is issued in such form, and notwithstanding the previous paragraph, all payments of interest, principal and other amounts in respect of this Security or portion thereof shall be made to the Depositary or its nominee in accordance with the Applicable Procedures in the coin or currency specified above and as further provided herein.

This Security is one of a duly authorized issue of securities of the Company (the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of February 25, 2000, as amended and supplemented from time to time (the “Indenture”, which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon Trust Company, N.A., a national banking association formed under the laws of the United States, as Trustee (the “Trustee”, which term includes any successor trustee under the Indenture), as to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated on the face hereof, limited in aggregate principal amount to $275,000,000; provided, however, the aggregate principal amount hereof can be increased, without the consent of the Holder, as permitted by the provisions of the Original Indenture.  The provisions of this Security, together with the provisions of the Indenture, shall govern the rights, obligations, duties and immunities of the Holder, the Company and the Trustee with respect to this Security, provided that, if any provision of this Security necessarily conflicts with any provision of the Indenture, the provision of this Security shall be controlling to the fullest extent permitted under the Indenture.

The Securities of this Series are subject to redemption upon not less than 30 nor more than 60 days’ notice by mail to the Holders of such Securities at their addresses in the Security 

  

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Register for such Series.  At any time prior to November 15, 2021, the Securities may be redeemed, at the option of the Company, either as a whole or in part at a redemption price equal to the greater of (1) 100% of the principal amount of the Securities being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Securities being redeemed (excluding the portion of any such interest accrued to the date of redemption) discounted (for purposes of determining present value) to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 30 basis points, plus, in each case, accrued interest thereon to the date of redemption.  At any time on or after November 15, 2021, the Securities may be redeemed, at the option of the Company,  in whole or in part at 100% of the principal amount of the Securities being redeemed, plus accrued interest thereon to the date of redemption.

“Business Day” means any day that is not a day on which banking institutions in New York City are authorized or required by law or regulation to close.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“remaining life”) of the Securities that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining life of the Securities.

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company and reasonably acceptable to the Trustee.

“Reference Treasury Dealer” means each of J.P. Morgan Securities LLC, UBS Securities LLC, and a Primary Treasury Dealer (defined herein) selected by Wells Fargo Securities, LLC, and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. government securities dealer in the United States (a “Primary Treasury Dealer”), the Company will substitute therefor another Primary Treasury Dealer reasonably acceptable to the Trustee.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at or before 3:30 p.m., New York City time, on the third Business Day preceding such redemption date.

“Treasury Rate” means, with respect to any redemption,  (i) the yield, under the heading which represents the average for the week immediately preceding the date on which the notice of redemption is mailed to the registered holders of the securities (the “calculation date”) appearing in the most recently published statistical release designated “H.15(519)” or any successor 

 

  

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publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining life (as defined above), yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

If notice has been given as provided in the Indenture and funds for redemption of any Securities (or any portion thereof) called for redemption shall have been made available on the Redemption Date referred to in such notice, such Securities (or any portion thereof) will cease to bear interest on the date fixed for such redemption specified in such notice and the only right of the Holders of such Securities will be to receive payment of the Redemption Price.

 

In the event of redemption of this Security in part only, a new Security or Securities of this Series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

 

The Securities of this series will not be subject to any sinking fund.

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

Interest payments with respect to this Security will be computed and paid on the basis of a 360-day year of twelve 30-day months for the actual number of days elapsed.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected (voting as a class).  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each Series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

  

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No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

This Security shall be exchangeable for Securities registered in the names of Persons other than the Depositary with respect to such series or its nominee only as provided in the Indenture.  This Security shall be so exchangeable if (x) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such series or at any time ceases to be a clearing agency registered as such under the Exchange Act, (y) the Company executes and delivers to the Trustee an Officers’ Certificate providing that this Security shall be so exchangeable or (z) there shall have occurred and be continuing an Event of Default with respect to the Securities of such series.  Securities so issued in exchange for this Security shall be of the same series, having the same interest rate, if any, and maturity and having the same terms as this Security, in authorized denominations and in the aggregate having the same principal amount as this Security and registered in such names as the Depositary for such Global Security shall direct.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of a Security of the series of which this Security is a part is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this Series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities of this Series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this Series are exchangeable for a like aggregate principal amount of Securities of this Series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

For so long as this Security is issued in the form of a Global Security, any notice to be given to the Holder of this Security shall be deemed to have been duly given to such Holder when given to the Depositary, or its nominee, in accordance with its Applicable Procedures.  

  

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Neither the Company nor the Trustee will have any responsibility with respect to those policies and procedures or for any notices or other communications among the Depositary, its direct and indirect participants and the beneficial owners of this Security in global form.

 

    If at any time this Security is not represented by a Global Security, any notice to be given to the Holder of this Security shall be deemed to have been duly given to such Holder upon the mailing of such notice to the Holder at such Holder’s address as it appears on the Security Register maintained by the Company or its agent as of the close of business preceding the day such notice is given.

Neither the failure to give any notice nor any defect in any notice given to the Holder of this Security or any other Security of this series will affect the sufficiency of any notice given to another Holder of any Securities of this series.

The Indenture provides that the Company, at its option, (a) will be discharged from any and all obligations in respect of the Securities (except for certain obligations to register the transfer or exchange of Securities, replace stolen, lost or mutilated Securities, maintain paying agencies and hold moneys for payment in trust) or (b) need not comply with certain restrictive covenants of the Indenture, in each case if the Company deposits, in trust, with the Trustee money or U.S. Government Obligations which, through the payment of interest thereon and principal thereof in accordance with their terms, will provide money, in an amount sufficient to pay all the principal of, and premium, if any, and interest, if any, on the Securities on the dates such payments are due in accordance with the terms of such Securities, and certain other conditions are satisfied.

No recourse shall be had for the payment of the principal of or the interest on this Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, organizer, member, limited partner, stockholder, officer or director, as such, past, present or future, of the Company or any successor Person, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released.

This Security shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict of law except Section 5-1401 of the New York General Obligations Law.

 

All terms used in this Security which are defined in the Indenture shall have the meanings ascribed to them in the Indenture.

  

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Unless the certificate of authentication hereon has been executed by the Trustee referred to herein by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, Southwestern Electric Power Company has caused this instrument to be duly executed.

	  	
SOUTHWESTERN ELECTRIC POWER COMPANY

	  	  	  
	  	  	  
	  	
By:

	________________  
	  	  	
Assistant Treasurer

 

This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

	
Dated:  February 3, 2012

	
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

	  	  	  
	  	  	  
	  	
By:

	_________________
	  	  	
Authorized Signatory

 

  

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FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

(PLEASE INSERT SOCIAL SECURITY OR OTHER

   IDENTIFYING NUMBER OF ASSIGNEE)

_______________________________________

________________________________________________________________

________________________________________________________________

(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF

________________________________________________________________

ASSIGNEE) the within Note and all rights thereunder, hereby

________________________________________________________________

irrevocably constituting and appointing such person attorney to

________________________________________________________________

transfer such Note on the books of the Issuer, with full

________________________________________________________________

power of substitution in the premises.

Dated:________________________                                                                           _________________________

NOTICE:  The signature to this assignment must correspond with the name as written upon the face of the within Note in every particular, without alteration or enlargement or any change whatever and NOTICE:  Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agents Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”) or the New York Stock Exchange, Inc. Medallion Signature Program (“MSP”).

  

A-8

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