Exhibit 4(a)
GUARANTEE
OF
MINNESOTA POWER, INC.
For value received, Minnesota Power, Inc., a corporation duly
organized and existing under the laws of the State of Minnesota (herein called
the "Guarantor"), hereby fully and unconditionally guarantees to the Trustee
under the Indenture, dated as of May 15, 1996, between ADESA Corporation (the
"Company") and The Bank of New York, as Trustee (together with any amendments
thereto, the "Indenture"), the payment of the obligations of the Company under
the Securities of the Second Series and the Indenture relating to such series,
including, without limitation, (i) the due and punctual payment of the principal
of and premium, if any, and interest on the Securities of the Second Series when
and as the same shall become due and payable, whether at maturity or upon
redemption or upon declaration or otherwise, according to the terms thereof and
of the Indenture, and (ii) the due and punctual payment of any amounts which may
be payable by the Company under or pursuant to the Tax Indemnity Agreement
referred to in paragraph 16 of the Officer's Certificate of Xxxxxxx X.
Xxxxxxxxxx, Chief Financial Officer of the Company dated March 30, 2000 (the
"Tax Indemnity Payments"). In case of the failure of the Company punctually to
pay any such principal, premium, if any, or interest or Tax Indemnity Payment,
the Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at maturity or upon
redemption or upon declaration or otherwise, and as if such payment were made by
the Company. The Guarantor hereby agrees that its obligations hereunder shall be
full and unconditional, irrespective of the validity, legality or enforceability
of the Securities of the Second Series or the Indenture, the absence of any
action to enforce the same, the waiver or consent by the Holder of the
Securities of the Second Series or by the Trustee with respect to any provisions
thereof or of said Indenture, the recovery of any judgment against the Company
or any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest or notice with
respect to the Securities of the Second Series or the indebtedness evidenced
thereby, and all demands whatsoever, and covenants that this Guarantee will not
be discharged except by complete performance of the obligations contained in the
Securities of the Second Series and in this Guarantee.
The Guarantor hereby guarantees that the obligations of the
Company under the Securities of the Second Series and the Indenture to the
extent related to such series will be paid to the Trustee without set-off or
counterclaim or other reduction whatsoever (whether for taxes, withholding or
otherwise) in lawful currency of the United States of America.
The obligations of the Guarantor hereunder are independent of
the obligations of the Company under the Securities of the Second Series and the
Indenture to the extent related to such series, and a separate action or actions
may be brought and prosecuted against the Guarantor whether or not an action or
proceeding is brought against the Company and whether or not the Company is
joined in any such action or proceeding. The liability of the Guarantor
hereunder is full and unconditional and (to the extent permitted by law) the
liability and obligations of the Guarantor hereunder shall not be released,
discharged, mitigated, waived, impaired or affected in whole or in part by any
circumstance (including any statute of limitations) (other than payment) that
might constitute a defense available to, or discharge of the Company or the
Guarantor, including, without limitation, any termination, amendment,
modification, addition, deletion, supplement or other change to any of the terms
of the Securities of the Second Series or the Indenture, any failure on the part
of the Trustee or any Holder to enforce, assert or exercise any right, power or
remedy, any waiver, consent, extension, renewal, indulgence, compromise,
release, settlement, refunding or other action or inaction under or in respect
of any obligation or liability
of the Company or the Guarantor or the Trustee or any Holder, or any
modification, compromise, settlement or release by the Trustee, or by operation
of law or otherwise, of the obligations or the liability of the Company under
the Securities of the Second Series, in whole or in part.
The Guarantor agrees that if at any time all or any part of
any payment at any time received by the Trustee or the Holders of the Securities
of the Second Series is or must be rescinded or returned by the Trustee or such
Holders for any reason whatsoever (including, without limitation, the
insolvency, reorganization or bankruptcy of the Company), then the Guarantor's
obligations hereunder shall, to the extent of the payment rescinded or returned,
be deemed to have continued in existence notwithstanding such previous receipt
by the Trustee or such Holders, and the Guarantor's obligations hereunder shall
continue to be effective or reinstated, as the case may be, as if such payment
had never been made.
The failure of the Trustee to enforce any right or remedy
hereunder, or promptly to enforce any right or remedy hereunder, or promptly to
enforce any such right or remedy, shall not constitute a waiver thereof, nor
give rise to any estoppel against the Trustee, nor excuse the Guarantor from its
obligations hereunder.
No reference herein to the Indenture and no provision of this
Guarantee or of the Indenture shall alter or impair the guarantee of the
Guarantor, which is absolute and unconditional, of the due and punctual payment
of the principal of and premium, if any, and interest on the Security of the
series upon which this Guarantee is endorsed and of any Tax Indemnity Payments.
The Guarantor shall be subrogated to all rights of the Holder
of the Securities of the Second Series against the Company in respect of any
amounts paid by the Guarantor pursuant to the provisions of this Guarantee upon
payment by the Guarantor of all amounts due and payable under such Guarantee.
This Guarantee shall be irrevocable unless terminated as
provided herein. This Guarantee shall be terminated upon the assumption by the
Guarantor of the obligations of the Company under the Securities of the Second
Series and the Indenture to the extent related to such series as provided in the
terms of such Securities.
All capitalized terms used in this Guarantee which are not
defined herein but are defined in the Indenture shall have the meanings set
forth in the Indenture.
This Guarantee shall be deemed to be a contract made under the
laws of the State of New York and shall for all purposes be governed by and
construed in accordance with the laws of such State.
SECTION 1. CONSOLIDATION, MERGER AND SALE OF ASSETS.
During the term of this Guarantee, the Guarantor shall not
consolidate with or merge into any other corporation, or convey or otherwise
transfer or lease its properties and assets substantially as an entirety to any
Person, unless
(a) the corporation formed by such consolidation or into which
the Guarantor is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Guarantor
substantially as an entirety shall be a Person organized and validly
existing under the laws of the United States, any State thereof or the
District of Columbia, and shall expressly assume, the obligations of the
Guarantor under this Guarantee;
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(b) immediately after giving effect to such transaction no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing;
and
(c) the Guarantor shall have delivered to the Trustee an
Officer's Certificate (as hereinafter defined) and an Opinion of Counsel
(as hereinafter defined), each stating that such consolidation, merger,
conveyance, or other transfer or lease and such supplemental indenture
comply with this Guarantee and that all conditions precedent herein
provided for relating to such transactions have been complied with.
Upon any consolidation by the Guarantor with or merger by the
Guarantor into any other corporation or any conveyance, or other transfer or
lease of the properties and assets of the Guarantor substantially as an entirety
in accordance with this Section, the successor corporation formed by such
consolidation or into which the Guarantor is merged or the Person to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Guarantor under this Guarantee
and under the terms of the Securities of the Second Series (including assumption
of the obligations under the Securities of the Second Series and under the
Indenture to the extent related to such series) with the same effect as if such
successor Person had been named as the Guarantor herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Guarantee.
SECTION 1A. FINANCIAL INFORMATION.
During the term of this Guarantee, the Guarantor shall deliver to the
holders of the Securities of the Second Series:
(a) Quarterly Statements - promptly, and in any event within 60 days
after the end of each quarterly fiscal period in each fiscal year of the
Guarantor (other than the last quarterly fiscal period of each such fiscal
year), duplicate copies of:
(i) consolidated balance sheets of the Guarantor as at the
end of such quarter, and
(ii) consolidated statements of income, cash flows, and
changes in shareholders' equity, of the Guarantor for such quarter and
(in the case of the second and third quarters) for the portion of the
fiscal year ending with such quarter, setting forth in each case in
comparative form the figures for the corresponding periods in the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP applicable to quarterly financial statements generally, and
certified by an Authorized Officer as fairly presenting, in all
material respects, the financial position of the companies being
reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments,
provided, that delivery within the time period specified above of copies of the
Guarantor's Quarterly Report on Form 10-Q which is prepared in compliance with
the requirements therefor and which is filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 1A(a);
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(b) Annual Statements - promptly, and in any event within 105 days
after the end of each fiscal year of the Guarantor, duplicate copies of,
(i) consolidated balance sheets of the Guarantor, as at the
end of such year, and
(ii) consolidated statements of income, cash flows, and
changes in shareholders' equity, of the Guarantor, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, certified by an Authorized Officer as fairly presenting, in
all material respects, the financial position of the companies being
reported on and their results of operations and cash flows and
accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state
that such financial statements present fairly, in all material
respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared
in conformity with GAAP, and that the examination of such accountants
in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances,
provided that the delivery within the time period specified above of the
Guarantor's Annual Report on Form 10-K for such fiscal year (together with the
Guarantor's annual report to shareholders if any, prepared pursuant to Rule
14a-3 under the Exchange Act) which are prepared in accordance with the
requirements therefor and which are filed with the Securities and Exchange
Commission, shall be deemed to satisfy the requirements of this Section 1A(b);
SECTION 2. LIMITATION ON LIENS.
A. The Guarantor shall not suffer any Lien (other than Permitted
Liens) to be created or to exist upon any property (other than Excepted
Property) of the Guarantor, real, personal or mixed, of whatever kind or nature
and located in the State of Minnesota, whether owned at the date of the
execution and delivery of this Guarantee or hereafter acquired, all except as
expressly contemplated in subsection B of this Section.
B. The provisions of subsection A shall not prohibit the creation
or existence of any Lien on property of the Guarantor which secures indebtedness
for borrowed money if either:
1. the Guarantor shall make effective provision whereby
this Guarantee shall be secured equally and ratably with the
indebtedness secured by such Lien; or
2. the Guarantor shall deliver to the Trustee bonds,
notes or other evidences of indebtedness secured by such Lien
(hereinafter called "Secured Obligations") (a) in an aggregate
principal amount equal to the aggregate principal amount of the
Securities of the Second Series then Outstanding, (b) maturing
(or being subject to mandatory redemption) on March 30, 2010 and
(c) containing, in addition to any mandatory redemption
provisions applicable to all Secured Obligations outstanding
under such Lien and any mandatory redemption provisions contained
therein pursuant to clause (b) above, mandatory redemption
provisions correlative to the provisions, if any, for the
mandatory redemption (pursuant to a sinking fund or
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otherwise) of the Securities of the Second Series or for the
redemption thereof at the option of the Holder, as well as a
provision for mandatory redemption upon an acceleration of the
maturity of all Outstanding Securities of the Second Series
following an Event of Default (such mandatory redemption to be
rescinded upon the rescission of such acceleration); it being
expressly understood that such Secured Obligations (x) may, but
need not, bear interest, (y) may, but need not, contain
provisions for the redemption thereof at the option of the
issuer, any such redemption to be made at a redemption price or
prices not less than the principal amount thereof and (z) shall
be held by the Trustee for the benefit of the Holders of all
Securities of the Second Series from time to time Outstanding
subject to such terms and conditions relating to surrender to the
Guarantor, transfer restrictions, voting, application of payments
of principal and interest and other matters as shall be set forth
in an indenture supplemental hereto specifically providing for
the delivery to the Trustee of such Secured Obligations.
C. If the Guarantor shall elect either of the alternatives
described in subsection B, the Guarantor shall deliver to the Trustee:
1. an amendment to this Guarantee (a) together with
appropriate inter-creditor arrangements, whereby this Guarantee
shall be secured by the Lien referred to in subsection B equally
and ratably with all other indebtedness secured by such Lien or
(b) providing for the delivery to the Trustee of Secured
Obligations;
2. an Officer's Certificate (a) stating that, to the
knowledge of the signer, (I) no Event of Default has occurred and
is continuing and (II) no event has occurred and is continuing
which entitles the secured party under such Lien to accelerate
the maturity of the indebtedness outstanding thereunder and (b)
stating the aggregate principal amount of indebtedness issuable,
and then proposed to be issued, under and secured by such Lien;
3. an Opinion of Counsel (a) if this Guarantee is to be
secured by such Lien, to the effect that all Securities of the
Second Series then Outstanding are entitled to the benefit of
such Lien equally and ratably with all other indebtedness
outstanding under such Lien or (b) if Secured Obligations are to
be delivered to the Trustee, to the effect that such Secured
Obligations have been duly issued under such Lien and constitute
valid obligations, entitled to the benefit of such Lien equally
and ratably with all other indebtedness then outstanding under
such Xxxx.
D. For all purposes of this Guarantee, except as otherwise
expressly provided or unless the context otherwise requires:
"EXCEPTED PROPERTY" means
(a) all cash on hand or in banks or other financial
institutions, deposit accounts, shares of stock, interests in
general or limited partnerships, bonds, notes, evidences of
indebtedness and other securities not hereafter paid or delivered
to, deposited with or held by the Trustee hereunder or required
so to be;
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(b) all contracts, leases, operating agreements, and
other agreements of whatsoever kind and nature; all contract
rights, bills, notes and other instruments and chattel paper
(except to the extent that any of the same constitute securities,
in which case they are separately excepted from this Guarantee
under clause (a) above); all revenues, income and earnings, all
accounts, accounts receivable and unbilled revenues, and all
rents, tolls, issues, product and profits, claims, credits,
demands and judgments; all governmental and other licenses,
permits, franchises, consents and allowances; all patents, patent
licenses and other patent rights, patent applications, trade
names, trademarks, copyrights, claims, credits, choses in action
and other intangible property and general intangibles including,
but not limited to, computer software;
(c) all automobiles, buses, trucks, truck cranes,
tractors, trailers and similar vehicles and movable equipment;
all rolling stock, rail cars and other railroad equipment; all
vessels, boats, barges and other marine equipment; all airplanes,
helicopters, aircraft engines and other flight equipment; all
parts, accessories and supplies used in connection with any of
the foregoing; and all personal property of such character that
the perfection of a security interest therein or other Lien
thereon is not governed by the Uniform Commercial Code as in
effect in the jurisdiction in which such property is located;
(d) all goods, stock in trade, wares, merchandise and
inventory held for the purpose of sale or lease in the ordinary
course of business; all materials, supplies, inventory and other
items of personal property which are consumable (otherwise than
by ordinary wear and tear) in their use in the operation of any
property of the Guarantor; all fuel, including nuclear fuel,
whether or not any such fuel is in a form consumable in the
operation of any property of the Guarantor, including separate
components of any fuel in the forms in which such components
exist at any time before, during or after the period of the use
thereof as fuel; all hand and other portable tools and equipment;
all furniture and furnishings; and computers and data processing,
data storage, data transmission, telecommunications and other
facilities, equipment and apparatus, which, in any case, are used
primarily for administrative or clerical purposes or are
otherwise not necessary for the operation or maintenance of the
facilities, machinery, equipment or fixtures of the Guarantor for
(i) the generation, transmission or distribution of electric
energy, (ii) the transmission, storage or distribution of gas or
(iii) the appropriation, storage, transmission or distribution of
water;
(e) all coal, ore, gas, oil and other minerals and all
timber, and all rights and interests in any of the foregoing,
whether or not such minerals or timber shall have been mined or
extracted or otherwise separated from the land; and all electric
energy, gas (natural or artificial), steam, water and other
products generated, produced, manufactured, purchased or
otherwise acquired by the Guarantor;
(f) all real property, leaseholds, gas rights, xxxxx,
gathering, tap or other pipe lines, or facilities, equipment or
apparatus, in any case used or to be used primarily for the
production or gathering of natural gas;
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(g) all hydroelectric plants and all lands, power sites,
flowage rights, water rights, riparian rights, permits, licenses,
franchises, privileges, leaseholds, water locations, water
appropriations, ditches, flumes, reservoirs, reservoir sites,
canals, raceways, dams, dam sites, aqueducts, structures,
facilities, equipment, or apparatus, in any case used or to be
used primarily in connection with the Company's hydroelectric
plants; and
(h) all leasehold interests held by the Guarantor as
lessee.
"LIEN" means any mortgage, deed of trust, pledge,
security interest, encumbrance, easement, lease, reservation, restriction,
servitude, charge or similar right and any other lien of any kind, including,
without limitation, any conditional sale or other title retention agreement, any
lease in the nature thereof, and any defect, irregularity, exception or
limitation in record title.
"OFFICER'S CERTIFICATE" means a certificate signed by an
Authorized Officer and delivered to the Trustee.
"Authorized Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, or any other officer or agent
of the Guarantor duly authorized by the Board of Directors to act in respect of
matters relating to this Guarantee. "Board of Directors" means either the board
of directors of the Guarantor or any committee thereof duly authorized to act in
respect of matters relating to this Guarantee.
"OPINION OF COUNSEL" means a written opinion of counsel,
who may be counsel for the Guarantor, or other counsel acceptable to the
Trustee.
"PERMITTED LIENS" means, as of any particular time, any
of the following:
(a) Liens for taxes, assessments and other governmental
charges or requirements which are not delinquent or which are
being contested in good faith by appropriate proceedings;
(b) mechanics', workmen's, repairmen's, materialmen's,
warehousemen's and carriers' Liens, other Liens incident to
construction, Liens or privileges of any employees of the
Guarantor for salary or wages earned, but not yet payable, and
other Liens, including without limitation Liens for worker's
compensation awards, arising in the ordinary course of business
for charges or requirements which are not delinquent or which are
being contested in good faith and by appropriate proceedings;
(c) Liens in respect of attachments, judgments or awards
arising out of judicial or administrative proceedings (i) in an
aggregate amount not exceeding Ten Million Dollars ($10,000,000)
or (ii) with respect to which the Guarantor shall (X) in good
faith be prosecuting an appeal or other proceeding for review and
with respect to which the Guarantor shall have secured a stay of
execution pending such appeal or other proceeding or (Y) have the
right to prosecute an appeal or other proceeding for review;
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(d) easements, leases, reservations or other rights of
others in, on, over, and/or across, and laws, regulations and
restrictions affecting, and defects, irregularities, exceptions
and limitations in title to, the property of the Guarantor or any
part thereof; provided, however, that such easements, leases,
reservations, rights, laws, regulations, restrictions, defects,
irregularities, exceptions and limitations do not in the
aggregate materially impair the use by the Guarantor of its
property considered as a whole for the purposes for which it is
held by the Guarantor;
(e) defects, irregularities, exceptions and limitations
in title to real property subject to rights-of-way in favor of
the Guarantor or otherwise or used or to be used by the Guarantor
primarily for right-of-way purposes or real property held under
lease, easement, license or similar right; provided, however,
that (i) the Guarantor shall have obtained from the apparent
owner or owners of such real property a sufficient right, by the
terms of the instrument granting such right-of-way, lease,
easement, license or similar right, to the use thereof for the
purposes for which the Guarantor acquired the same, (ii) the
Guarantor has power under eminent domain or similar statutes to
remove such defects, irregularities, exceptions or limitations or
(iii) such defects, irregularities, exceptions and limitations
may be otherwise remedied without undue effort or expense; and
defects, irregularities, exceptions and limitations in title to
flood lands, flooding rights and/or water rights;
(f) Liens securing indebtedness or other obligations
neither created, assumed nor guaranteed by the Guarantor nor on
account of which it customarily pays interest upon real property
or rights in or relating to real property acquired by the
Guarantor for the purpose of the transmission or distribution of
electric energy, gas or water, for the purpose of telephonic,
telegraphic, radio, wireless or other electronic communication or
otherwise for the purpose of obtaining rights-of-way;
(g) leases existing at the date of the execution and
delivery of this Guarantee affecting properties owned by the
Guarantor at said date and renewals and extensions thereof; and
leases affecting such properties entered into after such date or
affecting properties acquired by the Guarantor after such date
which, in either case, (i) have respective terms of not more than
ten (10) years (including extensions or renewals at the option of
the tenant) or (ii) do not materially impair the use by the
Guarantor of such properties for the respective purposes for
which they are held by the Guarantor;
(h) Liens vested in lessors, licensors, franchisors or
permitters for rent or other amounts to become due or for other
obligations or acts to be performed, the payment of which rent or
the performance of which other obligations or acts is required
under leases, subleases, licenses, franchises or permits, so long
as the payment of such rent or other amounts or the performance
of such other obligations or acts is not delinquent or is being
contested in good faith and by appropriate proceedings;
(i) controls, restrictions, obligations, duties and/or
other burdens imposed by federal, state, municipal or other law,
or by rules, regulations or orders of Governmental Authorities,
upon any property of the Guarantor or the operation or
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use thereof or upon the Guarantor with respect to any of its
property or the operation or use thereof or with respect to any
franchise, grant, license, permit or public purpose requirement,
or any rights reserved to or otherwise vested in Governmental
Authorities to impose any such controls, restrictions,
obligations, duties and/or other burdens;
(j) rights which Governmental Authorities may have by
virtue of franchises, grants, licenses, permits or contracts, or
by virtue of law, to purchase, recapture or designate a purchaser
of or order the sale of, any property of the Guarantor, to
terminate franchises, grants, licenses, permits, contracts or
other rights or to regulate the property and business of the
Guarantor; and any and all obligations of the Guarantor
correlative to any such rights;
(k) Liens required by law or governmental regulations (i)
as a condition to the transaction of any business or the exercise
of any privilege or license, (ii) to enable the Guarantor to
maintain self-insurance or to participate in any funds
established to cover any insurance risks, (iii) in connection
with workmen's compensation, unemployment insurance, social
security, any pension or welfare benefit plan or (iv) to share in
the privileges or benefits required for companies participating
in one or more of the arrangements described in clauses (ii) and
(iii) above;
(l) Liens on property of the Guarantor which are granted
by the Guarantor to secure duties or public or statutory
obligations or to secure, or serve in lieu of, surety, stay or
appeal bonds;
(m) rights reserved to or vested in others to take or
receive any part of any coal, ore, gas, oil and other minerals,
any timber and/or any electric capacity or energy, gas, water,
steam and any other products, developed, produced, manufactured,
generated, purchased or otherwise acquired by the Guarantor or by
others on property of the Guarantor;
(n) (i) rights and interests of Persons other than the
Guarantor arising out of contracts, agreements and other
instruments to which the Guarantor is a party and which relate to
the common ownership or joint use of property; and (ii) all Liens
on the interests of Persons other than the Guarantor in property
owned in common by such Persons and the Guarantor if and to the
extent that the enforcement of such Liens would not adversely
affect the interests of the Guarantor in such property in any
material respect;
(o) any restrictions on assignment and/or requirements of
any assignee to qualify as a permitted assignee and/or public
utility or public service corporation;
(p) any Liens which have been bonded for the full amount
in dispute or for the payment of which other adequate security
arrangements have been made;
(q) grants, by the Guarantor of easements, ground leases
or rights-of-way in, upon, over and/or across the property or
rights-of-way of the Guarantor for the purpose of roads, pipe
lines, transmission lines, distribution lines, communication
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lines, railways, removal of coal or other minerals or timber, and
other like purposes, or for the joint or common use of real
property, rights-of-way, facilities and/or equipment; provided,
however, that no such grant shall materially impair the use of
the property or rights-of-way for the purposes for which such
property or rights-of-way are held by the Guarantor;
(r) Prepaid Liens;
(s) Purchase Money Liens and any other Liens existing or
placed upon property at the time of, or within one hundred eighty
(180) days after, the acquisition thereof by the Guarantor, and
any extensions, renewals and/or replacements of any such Liens to
secure any refundings, refinancings and/or replacements of the
indebtedness secured thereby; provided, however, that no such
Purchase Money Lien or other Lien shall extend to or cover any
property of the Guarantor other than (i) the property so acquired
and improvements, extensions and additions to such property and
renewals, replacements and substitutions of or for such property
or any part or parts thereof and (ii) with respect to Purchase
Money Liens, other property subsequently acquired by the
Guarantor;
(t) Liens on property of the Guarantor which secure
indebtedness for borrowed money which matures less than one year
from the date of the issuance or incurrence thereof and is not
extendible at the option of the issuer, and any extensions,
renewals and/or replacements of any such Liens to secure any
refundings, refinancings and/or replacements of such indebtedness
by or with similar indebtedness;
(u) Liens created or assumed by the Guarantor in
connection with the issuance of debt securities the interest on
which is not included in gross income for purposes of federal
income taxation pursuant to Section 103 of the Internal Revenue
Code of 1986, as amended (or any successor provision of law), for
the purpose of financing, in whole or in part, the acquisition or
construction of property to be used by the Guarantor, to the
extent that such Lien is required in connection with the issuance
of such debt securities either by applicable law or by the issuer
of such debt securities or is otherwise necessary in order to
establish or maintain such exclusion from gross income; and any
extensions, renewals and/or replacements of any such Liens to
secure any refundings, refinancings and/or replacement of such
debt securities by or with similar securities;
(v) Liens securing indebtedness or lease obligations (i)
which are related to the construction or acquisition of property
not previously owned by the Guarantor or (ii) which are related
to the financing of a project involving the development or
expansion of property of the Guarantor and (iii) the obligee in
respect of which has no recourse to the Guarantor or any property
of the Guarantor other than the property constructed or acquired
with the proceeds of such transaction or the project financed
with the proceeds of such transaction (or the proceeds thereof);
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(w) Liens created by the Mortgage and Deed of Trust dated
September 1, 1945 between the Guarantor and Irving Trust Company
(now The Bank of New York) and Xxxxxxx X. Xxxx (Xxxxxxx X.
XxxXxxxx, successor), as Trustees, as heretofore and hereafter
supplemented and amended (the "Mortgage"); and Liens created by
any other indenture hereafter executed by the Guarantor pursuant
to which bonds issued under the Mortgage are or are to be
delivered to the trustee(s) under such indenture in a principal
amount at least equal to the principal amount of debt securities
to be secured by such indenture; and
(x) in addition to the Permitted Liens defined in clauses
(a) through (w) above, Liens on any property of the Guarantor
(other than Excepted Property) to secure indebtedness for
borrowed money (under circumstances not otherwise excepted from
the operation of this Section) in an aggregate principal amount
not exceeding 2.5% of the total assets of the Guarantor and its
consolidated subsidiaries, as shown on the latest balance sheet
of the Guarantor and its consolidated subsidiaries, audited by
independent certified public accountants, dated prior to the date
of the issuance or incurrence of such indebtedness.
"PREPAID LIEN" means any Lien securing indebtedness for
the payment, prepayment or redemption of which there shall have been irrevocably
deposited in trust with the trustee or other holder of such Lien moneys and/or
Investment Securities which (together with the interest reasonably expected to
be earned from the investment and reinvestment in Investment Securities of the
moneys and/or the principal of and interest on the Investment Securities so
deposited) shall be sufficient for such purpose; provided, however, that if such
indebtedness is to be redeemed or otherwise prepaid prior to the stated maturity
thereof, any notice requisite to such redemption or prepayment shall have been
given in accordance with the instrument creating such Lien or irrevocable
instructions to give such notice shall have been given to such trustee or other
holder. As used herein, the term "Investment Securities" means any of the
following obligations or securities on which neither the Guarantor, any other
obligor on the Securities of the Second Series nor any Affiliate of either is
the obligor: (a) Government Obligations; (b) interest bearing deposit accounts
(which may be represented by certificates of deposit) in any national or state
bank (which may include the Trustee or any Paying Agent) or savings and loan
association which has outstanding securities rated by a nationally recognized
rating organization in either of the two (2) highest rating categories (without
regard to modifiers) for short term securities or in any of the three (3)
highest rating categories (without regard to modifiers) for long term
securities; (c) bankers' acceptances drawn on and accepted by any commercial
bank (which may include the Trustee or any Paying Agent) which has outstanding
securities rated by a nationally recognized rating organization in either of the
two (2) highest rating categories (without regard to modifiers) for short term
securities or in any of the three (3) highest rating categories (without regard
to modifiers) for long term securities; (d) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, any State or Territory of the United States or the District of
Columbia, or any political subdivision of any of the foregoing, which are rated
by a nationally recognized rating organization in either of the two (2) highest
rating categories (without regard to modifiers) for short term securities or in
any of the three (3) highest rating categories (without regard to modifiers) for
long term securities; (e) bonds or other obligations of any agency or
instrumentality of the United States; (f) corporate debt securities which are
rated by a nationally
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recognized rating organization in either of the two (2) highest rating
categories (without regard to modifiers) for short term securities or in any of
the three (3) highest rating categories (without regard to modifiers) for long
term securities; (g) repurchase agreements with respect to any of the foregoing
obligations or securities with any banking or financial institution (which may
include the Trustee or any Paying Agent) which has outstanding securities rated
by a nationally recognized rating organization in either of the two (2) highest
rating categories (without regard to modifiers) for short term securities or in
any of the three (3) highest rating categories (without regard to modifiers) for
long term securities; (h) securities issued by any regulated investment company
(including any investment company for which the Trustee or any Paying Agent is
the advisor), as defined in Section 851 of the Internal Revenue Code of 1986, as
amended, or any successor section of such Code or successor federal statute,
provided that the portfolio of such investment company is limited to obligations
or securities of the character and investment quality contemplated in clauses
(a) through (f) above and repurchase agreements which are fully collateralized
by any of such obligations or securities; and (i) any other obligations or
securities which may lawfully be purchased by the Trustee in its capacity as
such.
"PURCHASE MONEY LIEN" means, with respect to any property
being acquired by the Guarantor, a Lien on such property which
(a) is taken or retained by the transferor of such
property to secure all or part of the purchase price thereof;
(b) is granted to one or more Persons other than the
transferor which, by making advances or incurring an obligation,
give value to enable the grantor of such Lien to acquire rights
in or the use of such property;
(c) is held by a trustee or agent for the benefit of one
or more Persons described in clause (a) or (b) above, provided
that such Lien may be held, in addition, for the benefit of one
or more other Persons which shall have theretofore given, or may
thereafter give, value to or for the benefit or account of the
grantor of such Lien for one or more other purposes; or
(d) otherwise constitutes a purchase money mortgage or a
purchase money security interest under applicable law;
and, without limiting the generality of the foregoing, for purposes of this
Guarantee, the term Purchase Money Lien shall be deemed to include any Lien
described above whether or not such Lien (x) shall permit the issuance or other
incurrence of additional indebtedness secured by such Lien on such property, (y)
shall permit the subjection to such Lien of additional property and the issuance
or other incurrence of additional indebtedness on the basis thereof and/or (z)
shall have been granted prior to the acquisition of such property, shall attach
to or otherwise cover property other than the property being acquired and/or
shall secure obligations issued prior and/or subsequent to the issuance of the
obligations delivered in connection with such acquisition.
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IN WITNESS WHEREOF, MINNESOTA POWER, INC. has caused this
Guarantee to be executed in its corporate name by the manual or facsimile
signature of its Chairman of the Board of Directors or its President or any one
of its Vice Presidents and its corporate seal or a facsimile thereof to be
impressed or imprinted hereon, and the same to be attested by the manual or
facsimile signature of its Secretary or any one of its Assistant Secretaries.
Dated: March 30, 2000
MINNESOTA POWER, INC.
[Corporate Seal]
By /s/ X. X. Xxxxxxx
------------------------------
Senior Vice President-Finance
And Chief Financial Officer
Attest:
/s/ Xxxxxx X. Xxxxxxxxx
----------------------------
Vice President, Secretary
And General Counsel
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