Document:

exhibit4a.htm

    Exhibit
4(a)

    

    

    SOUTHWESTERN
ELECTRIC POWER COMPANY

    

    

    and

    

    

    THE BANK
OF NEW YORK MELLON,

    AS
TRUSTEE

    

    

    ___________________

    

    

    EIGHTH
SUPPLEMENTAL INDENTURE

    

    Dated as
of March 1, 2010

    

    

    Supplemental
to the Indenture

    dated as
of February 25, 2000

    

    

    6.20%
Senior Notes, Series H, due 2040

    
      

      

      

      

      

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    EIGHTH SUPPLEMENTAL INDENTURE, dated as
of March 1, 2010, 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, a New York banking corporation
organized and existing under the laws of the State of New York, 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 $350,000,000 to be
designated the “6.20% Senior Notes, Series H, due 2040” (the “Series H Notes”),
and all action on the part of the Company necessary to authorize the issuance of
the Series H Notes under the Original Indenture and this Eighth Supplemental
Indenture has been duly taken.

    

    All acts and things necessary to make
the Series H Notes, when executed by the Company and completed, authenticated
and delivered by the Trustee as provided in the Original Indenture and this
Eighth 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 EIGHTH SUPPLEMENTAL INDENTURE WITNESSETH:

    

    That in
consideration of the premises and of the acceptance and purchase of the Series H
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 H Notes, as follows:

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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 H Note attached hereto as
Exhibit
A.

    

    

    ARTICLE
TWO

    Terms and
Issuance of the Series H Notes

    

    SECTION
201.                                Issue of Series H
Notes.

    

    A series of Senior Notes which shall be
designated the “6.20%  Senior Notes, Series H, due 2040” 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 Eighth Supplemental Indenture
(including the form of Series H Note set forth in Exhibit A
hereto).  The aggregate principal amount of the Series H Notes which
may be authenticated and delivered under this Eighth Supplemental Indenture
shall initially be $350,000,000, and such principal amount of the Series H Notes
may be increased from time to time.  All Series H 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 H
Notes.  Any such additional Series H Notes will have the same interest
rate, maturity and other terms as those initially issued.

    

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

    

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

    

    SECTION
203.                                Depositary for Global
Securities.

    

    The Depositary for any Global
Securities of the series of which this Series H 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 H
Notes.

    

    So long
as any of the Series H 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 acquired to secure any indebtedness
for borrowed money (“Secured Debt”), without providing that the Series H 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 H 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 101 Barclay Street, New York, NY 10286, Attention:
Corporate Trust Administration.

    SECTION
206.                               
Optional
Redemption.

    

    The
Series H 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.  The Series H 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 H Notes being redeemed
and (2) the sum of the present values of the remaining scheduled payments of
principal and interest on the Series H 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 25 basis points; plus, in each case,
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 H 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 H
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 BNP
Paribas Securities Corp., J.P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated and their respective successors; provided, however, that if any of
the foregoing shall cease to be a primary U.S. government securities dealer the
Company will substitute therefor another primary U.S. government securities
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 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
by the Independent Investment Banker and the Treasury Rate will be interpolated
or extrapolated from such yields by the Independent Investment Banker 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 by the Independent Investment Banker 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 H Notes.

    

    SECTION
208.                               
Regular Record
Date.

    

    The
“Regular Record Date” will be the March 1 or September 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 Eighth Supplemental Indenture is
executed and shall be construed as an indenture supplemental to the Original
Indenture and, as provided in the Original Indenture, this Eighth 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 Eighth 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.

    

    SECTION
304.                                Successors and
Assigns.

    

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

    

    SECTION
305.                                Separability
Clause.

    

    In case any provision in this Eighth
Supplemental Indenture or in the Series H 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 Eighth
Supplemental Indenture.

    

    Nothing in this Eighth Supplemental
Indenture or in the Series H 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
Eighth Supplemental Indenture.

    

    SECTION
307.                                Execution and
Counterparts.

    

    This Eighth 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.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the parties hereto
have caused this Eighth 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 MELLON, as
Trustee

     

    
 

    
      By   /s/ Beata
Harvin

      Authorized
Signatory

    

                                                                                                             

    Attest:

    

    

    /s/ Cheryl
Clark

    Authorized
Signatory

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    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

    6.20%
Senior Notes, Series H, due 2040

    CUSIP No.
845437
BL5                                                                                                                                                                                        $350,000,000

    

    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
THREE HUNDRED-FIFTY MILLION DOLLARS ($350,000,000) on March 15, 2040 (the “Final
Maturity”), and to pay interest thereon from March 8, 2010 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on March 15 and September 15 each year, commencing September
15, 2010, 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 March 1 or September 1 (whether or not a Business Day) immediately preceding
the Interest Payment Date.  Any such interest not so 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, a New York
banking corporation, 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
$350,000,000; 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 Register for such Series at the option of the Company,
in whole or in part, from time to time at a Redemption Price equal to the
greater of (i) 100% of the principal amount of the Securities being redeemed and
(ii) 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 25 basis points, plus, in each case, accrued
interest thereon to the date of redemption.

    

    “Treasury
Rate” means, with respect to any redemption:

     

    
      	
              ·  

            	
              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 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 by the Independent Investment
      Banker and the Treasury Rate will be interpolated or extrapolated from
      such yields by the Independent Investment Banker on a straight line basis,
      rounding to the nearest month); or

            

    

    

    
      	
              ·  

            	
              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 by the Independent Investment Banker
      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.

            

    

    

    “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 Security 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 Security.

    

    “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 BNP Paribas Securities Corp., J.P. Morgan Securities
Inc., Morgan Stanley & Co. Incorporated and their respective successors;
provided, however, that if any of the foregoing shall cease to be a primary U.S.
government securities dealer, the Company will substitute therefor another
primary U. S. government securities 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.

    

    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.

    

    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.  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.

     

    
      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.

    

     

    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.

    

    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:  March
      8, 2010

            	
              THE
      BANK OF NEW YORK MELLON

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            
	 
      	 
      	
              Authorized
      Signatory

            

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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”).exhibit10.htm

    
      	
              Exhibit
      10

              NAVISTAR
      FINANCIAL CORPORATION

              AND
      SUBSIDIARIES

               

              MATERIAL
      CONTRACTS

               

            
	
              The
      following documents of Navistar Financial Corporation (“the Corporation”)
      are incorporated herein by reference:

            
	 
      
	
              Exhibit
      10.1

            	
              Series
      2009-1 Indenture Supplement to the Indenture, dated November 10, 2009,
      between Navistar Financial Dealer Note Master Owner Trust, as Issuer, and
      The Bank of New York Mellon, a New York banking corporation, as Indenture
      Trustee.  Filed as Exhibit 10.1 to the Corporation’s Form 8-K on
      November 17, 2009.   Commission File No.
      001-04146.

               

            
	
              Exhibit
      10.2

            	
              Amendment
      No. 8 to the Pooling and Servicing Agreement, dated November 10, 2009,
      among Navistar Financial Securities Corporation, Navistar Financial
      Corporation and The Bank of New York Mellon, a New York banking
      corporation, as Master Trust Trustee.  Filed as Exhibit 10.2 to
      the Corporation’s Form 8-K on November 17,
      2009.   Commission File No. 001-04146.

               

            
	
              Exhibit
      10.3

            	
              Amendment
      No. 1 to Series 2004-1 Supplement to Pooling and Servicing Agreement,
      dated November 10, 2009, among Navistar Financial Securities Corporation,
      Navistar Financial Corporation and The Bank of New York Mellon, a New York
      banking corporation, as Master Trust Trustee.  Filed as Exhibit
      10.3 to the Corporation’s Form 8-K on November 17,
      2009.   Commission File No. 001-04146.

               

            
	
              Exhibit
      10.4

            	
              Amendment
      No. 1 to the Master Owner Trust Agreement, dated November 10, 2009,
      between Navistar Financial Securities Corporation and Deutsche Bank Trust
      Company Delaware, a Delaware banking corporation, as Master Owner Trust
      Trustee.  Filed as Exhibit 10.4 to the Corporation’s Form 8-K on
      November 17, 2009.   Commission File No.
      001-04146.

               

            
	
              Exhibit
      10.5

            	
              Amendment
      No. 5 to the Series 2000-VFC Supplement to the Pooling and Servicing
      Agreement, dated November 10, 2009, among Navistar Financial Securities
      Corporation, Navistar Financial Corporation and The Bank of New York
      Mellon, a New York banking corporation, as Master Trust
      Trustee.  Filed as Exhibit 10.5 to the Corporation’s Form 8-K on
      November 17, 2009.   Commission File No.
      001-04146.

               

            
	
              Exhibit
      10.6

            	
              Amendment
      to Amended and Restated Certificate Purchase Agreement, dated November 10,
      2009, among Navistar Financial Corporation, Navistar Financial Securities
      Corporation, Kitty Hawk Funding Corporation, as a Conduit Purchaser,
      Liberty Street Funding LLC (f/k/a Liberty Street Funding Corp.), as a
      Conduit Purchaser, The Bank of Nova Scotia, as a Managing Agent and a
      Committed Purchaser, and Bank of America, National Association, as a
      Managing Agent, the Administrative Agent and a Committed Purchaser. Filed
      as Exhibit 10.6 to the Corporation’s Form 8-K on November 17,
      2009.   Commission File No. 001-04146.

               

            
	
              Exhibit
      10.7

            	
              Amended
      and Restated Credit Agreement, dated as of December 16, 2009, by and among
      Navistar Financial Corporation, a Delaware corporation, and Navistar
      Financial, S.A. DE C.V., Sociedad Financiera De Objeto Multiple, Entidad
      No Regulada, a Mexican corporation, as borrowers, the lenders party
      thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of
      America, N.A., as syndication agent, and The Bank of Nova Scotia, as
      documentation agent. Filed as Exhibit 10.1 to the Corporation’s Form 8-K
      on December 18, 2009.   Commission File No.
      001-04146.

               

            
	
              Exhibit
      10.8

            	
              Second
      Amended and Restated Parent Guarantee, dated as of December 16, 2009, by
      Navistar International Corporation, a Delaware corporation, in favor of
      JPMorgan Chase Bank, N.A., as administrative agent for the lenders party
      to the Amended and Restated Credit Agreement.   Filed as
      Exhibit 10.2 to the Corporation’s Form 8-K on December 18,
      2009.   Commission File No.
  001-04146.

            

    

    

    
      
        
        

      

      
        E-1

        
          

        

      

      
        
        

      

    

    
      	
              Exhibit
      10.9

            	
              Second
      Amended and Restated Parents’ Side Agreement, dated as of December 16,
      2009, by and between Navistar International Corporation, a Delaware
      corporation, and Navistar, Inc. (formerly known as International Truck and
      Engine Corporation), a Delaware corporation, for the benefit of the
      lenders from time to time party to the Amended and Restated Credit
      Agreement. Filed as Exhibit 10.3 to the Corporation’s Form 8-K on December
      18, 2009.   Commission File No. 001-04146.

               

            
	
              Exhibit
      10.10

            	
              First
      Amendment, dated as of December 16, 2009, to the Amended and Restated
      Security, Pledge and Trust Agreement, dated as of July 1, 2005, between
      Navistar Financial Corporation, a Delaware corporation, and Deutsche Bank
      Trust Company Americas, a corporation duly organized and existing under
      the laws of the State of New York, acting individually and as trustee for
      the holders of the secured obligations under the Amended and Restated
      Credit Agreement.  Filed as Exhibit 10.4 to the Corporation’s
      Form 8-K on December 18, 2009.   Commission File No.
      001-04146.

               

            
	
              Exhibit
      10.11

            	
              Note
      Sale Agreement, dated as of December 16, 2009, between Navistar Financial
      Corporation, a Delaware corporation, and Navistar Financial Asset Sales
      Corp., a Delaware corporation.  Filed as Exhibit 10.5 to the
      Corporation’s Form 8-K on December 18, 2009.   Commission
      File No. 001-04146.

               

            
	
              Exhibit
      10.12

            	
              Note
      Purchase Agreement, dated as of December 16, 2009, by and between Navistar
      Financial Asset Sales Corp., a Delaware corporation, and Wells Fargo
      Equipment Finance, Inc., a Minnesota corporation.   Filed
      as Exhibit 10.6 to the Corporation’s Form 8-K on December 18,
      2009.   Commission File No. 001-04146.

               

            
	
              Exhibit
      10.13

            	
              Servicing
      Agreement, dated as of December 16, 2009, by and between Navistar
      Financial Corporation, a Delaware corporation, and Wells Fargo Equipment
      Finance, Inc., a Minnesota corporation.  Filed as Exhibit 10.7
      to the Corporation’s Form 8-K on December 18,
      2009.   Commission File No. 001-04146.

               

            
	
              Exhibit  10.14

            	
              Loan
      and Security Agreement, dated as of December 16, 2009, by and between
      Navistar Financial Corporation, a Delaware corporation, and Wells Fargo
      Equipment Finance, Inc., a Minnesota corporation.   Filed
      as Exhibit 10.8 to the Corporation’s Form 8-K on December 18,
      2009.   Commission File No. 001-04146.

               

            
	
              Exhibit
      10.15

            	
              Intercreditor
      Agreement, dated as of December 16, 2009, by and among Navistar Financial
      Corporation, a Delaware corporation, Wells Fargo Equipment Finance, Inc.,
      a Minnesota corporation, Deutsche Bank Trust Company Americas, a
      corporation duly organized and existing under the laws of the State of New
      York, acting individually and as trustee for the holders of the secured
      obligations under the Amended and Restated Credit Agreement, and JPMorgan
      Chase Bank, N.A., as administrative agent for the lenders party to the
      Amended and Restated Credit Agreement.  Filed as Exhibit 10.9 to
      the Corporation’s Form 8-K on December 18,
      2009.   Commission File No. 001-04146.

               

            
	
              Exhibit
      10.16

            	
              Treasurer’s
      Agreement Number 3 to the Amended and Restated Master Intercompany
      Agreement dated as of April 1, 2007.   Filed as Exhibit
      10.1 to the Corporation’s Form 8-K on February 2,
      2010.   Commission File No. 001-04146.

               

            
	
              Exhibit
      10.17

            	
              Series
      2010-1 Indenture Supplement to the Indenture, dated February 12, 2010,
      between Navistar Financial Dealer Note Master Owner Trust, as Issuer, and
      The Bank of New York Mellon, a New York banking corporation, as Indenture
      Trustee.   Filed as Exhibit 10.1 to the Corporation’s Form
      8-K on February 16, 2010.   Commission File No.
      001-04146.

               

            
	
              Exhibit
      10.18

            	
              Operating
      Agreement, dated March 5, 2010, among Navistar Financial Corporation,
      Navistar, Inc., Navistar International Corporation, General Electric
      Capital Corporation and GE Capital Commercial Inc.  Filed as
      Exhibit 10.1 to the Corporation’s Form 8-K on March 9,
      2010.   Commission File No.
  001-04146.

            

    

    

     

    
      
         

      

      
        E-2

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