EXHIBIT 4(b)(17)
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FORM OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
NORTHWESTERN CAPITAL FINANCING ____
Cross-Reference Table
for the Guarantee Agreement
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- ---------
Section 310(a) . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . . . . . . . . . . . 4.1(c), 2.8
310(c) . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . Not Applicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . Not Applicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . 2.5, 3.2
314(f) . . . . . . . . . . . . . . . . . . . . . . . 2.1, 3.2
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
315(d) . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
Section 316(a) . . . . . . . . . . . . . . . . . . . . . 5.4(a), 2.6
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.2
Section 317(a) . . . . . . . . . . . . . . . . . . . . Not Applicable
317(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
318(c) . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
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Note: This Cross-Reference Table shall not, for any purpose, be
deemed to be a part of the Guarantee Agreement.
ii
TABLE OF CONTENTS
ARTICLE I
Definitions and Interpretation
Page
----
SECTION 1.1. Definitions and Interpretation . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . 2
Common Securities Guarantee Agreement . . . . . . . 2
Common Securities . . . . . . . . . . . . . . . . . 2
Covered Person . . . . . . . . . . . . . . . . . . . 2
Event of Default . . . . . . . . . . . . . . . . . . 2
Guarantee Payments . . . . . . . . . . . . . . . . . 2
Holder . . . . . . . . . . . . . . . . . . . . . . . 3
Indemnified Person . . . . . . . . . . . . . . . . . 3
Indenture . . . . . . . . . . . . . . . . . . . . . 3
Majority in Liquidation amount of the Securities . . 3
Officers' Certificate . . . . . . . . . . . . . . . 3
Person . . . . . . . . . . . . . . . . . . . . . . . 4
Preferred Guarantee Trust . . . . . . . . . . . . . 4
Responsible Officer . . . . . . . . . . . . . . . . 4
Successor Preferred Guarantee Trustee . . . . . . . 4
Trust Indenture Act . . . . . . . . . . . . . . . . 4
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application . . . . . . . . . . 5
SECTION 2.2. Lists of Holders of Securities . . . . . . . . . . . 5
SECTION 2.3. Reports by the Preferred Trust Guarantee . . . . . . 5
SECTION 2.4. Periodic Reports to Preferred Guarantee Trustee . . 5
SECTION 2.5. Evidence of Compliance with Conditions Precedent . . 6
SECTION 2.6. Event of Default; Waiver . . . . . . . . . . . . . . 6
SECTION 2.7. Event of Default; Notice . . . . . . . . . . . . . . 6
SECTION 2.8. Conflicting Interests . . . . . . . . . . . . . . . 7
ARTICLE III
Powers, Duties, Rights of
Preferred Guarantee Trustee
SECTION 3.1. Powers and Duties of the Preferred Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee . . . 9
SECTION 3.3. Not Responsible for Recitals or Issuance of
Guarantee . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
Preferred Guarantee Trustee
SECTION 4.1. Preferred Guarantee Trustee; Eligibility . . . . . . 11
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SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustees . . . . . . . . . 12
ARTICLE V
Guarantee
SECTION 5.1. Guarantee . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2. Waiver of Notice and Demand . . . . . . . . . . . . 13
SECTION 5.3. Obligations Not Affected . . . . . . . . . . . . . . 13
SECTION 5.4. Rights of Holders . . . . . . . . . . . . . . . . . 14
SECTION 5.5. Guarantee of Payment . . . . . . . . . . . . . . . . 15
SECTION 5.6. Subrogation . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7. Independent Obligations . . . . . . . . . . . . . . 15
ARTICLE VI
Limitations of Transactions; Subordination
SECTION 6.1. Limitation of Transactions . . . . . . . . . . . . . 15
SECTION 6.2. Ranking . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
Termination
SECTION 7.1. Termination . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII
Indemnification
SECTION 8.1. Exculpation . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.2. Indemnification . . . . . . . . . . . . . . . . . . 17
ARTICLE IX
Miscellaneous
SECTION 9.1. Successors and Assigns . . . . . . . . . . . . . . . 18
SECTION 9.2. Amendments . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.3. Notices . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.4. Benefit . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.5. Governing Law . . . . . . . . . . . . . . . . . . . 19
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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Note: This table of contents shall not, for any purpose, be deemed
to be a part of the Guarantee Agreement.
iv
FORM OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
Dated as of _______________
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
__________, is executed and delivered by NorthWestern Corporation, a
Delaware corporation (the "Guarantor"), and Wilmington Trust Company,
a Delaware banking corporation, as trustee for the benefit of the
Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of NorthWestern Capital Financing
_____, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ______________, among the trustees of the
Issuer named therein, the Guarantor, as sponsor of the Issuer, and the
holders from time to time of undivided beneficial interests in the
assets of the Issuer, the Issuer is issuing on the date hereof
$__________ aggregate stated liquidation amount of Preferred
Securities designated the ____% Trust Preferred Capital Securities
(the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Guarantee Agreement, to pay to
the Holders of the Preferred Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble above or otherwise in this Guarantee
Agreement have the respective meanings assigned to them in
the Declaration as in effect on the date hereof;
(b) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as
modified, supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee
Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless
otherwise defined in this Guarantee Agreement or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule 405
promulgated under the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Common Securities Guarantee Agreement" means the guarantee agreement
dated as of the date hereof executed by the Guarantor for the benefit
of the holders from time to time of the Common Securities.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the
extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be
paid on the Preferred Securities to the extent the Guarantor has made
a payment of principal or interest on the Debentures (as defined in
the Declaration), (ii) the redemption price, including all accumulated
and unpaid Distributions to the date of redemption (the "Redemption
Price"), to the extent the Guarantor has made a payment of principal
or interest on the Debentures, with respect to any Preferred
Securities called for redemption by the Issuer, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Debentures
to the Holders in exchange for Preferred Securities as provided in the
Declaration or a redemption of all the Preferred Securities), the
lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions on the Preferred Securities to
the date of payment to the extent the Issuer has funds legally
available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an Event
of Default has occurred and is continuing, the rights of holders of
the Common Securities to receive payments under the Common Securities
2
Guarantee Agreement are subordinated to the rights of Holders of
Preferred Securities to receive Guarantee Payments under this
Guarantee Agreement.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the Holders of the requisite percentage of
Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate
of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives
or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of August 1, 1995, between
the Guarantor (the "Debenture Issuer") and The Chase Manhattan Bank
(as successor to The Chase Manhattan Bank (N.A.)), as trustee, and
any indenture supplemental thereto pursuant to which certain
subordinated debt securities of the Debenture Issuer are to be issued
to the Property Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holders of
Preferred Securities, voting separately as a class, of more than 50%
of the liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any
Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary
to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
3
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any
other entity of whatever nature.
"Preferred Guarantee Trustee" means Wilmington Trust Company, in its
capacity as trustee hereunder and not in its individual capacity,
until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Guarantee
Agreement and thereafter means such Successor Preferred Guarantee
Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any vice-president, any assistant vice-president, the
secretary, any assistant secretary, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other
officer of the Corporate Trust Department of the Preferred Guarantee
Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this
Guarantee Agreement and shall, to the extent applicable, be
governed by such provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
4
SECTION 2.2. Lists of Holders of Securities.
(a) The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee
may reasonably require, of the name and addresses of the
Holders of the Preferred Securities as of such date, (i)
within 14 days after January 1 and June 30 of each year, and
(ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a list of Holders as of a
date no more than 14 days before such list of Holders is
given to the Preferred Guarantee Trustee, provided that the
Guarantor shall not be obligated to provide such list of
Holders at any time the list of Holders does not differ from
the most recent list of Holders given to the Preferred
Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any list of Holders previously given to
it on receipt of a new list of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
SECTION 2.3. Reports by the Preferred Guarantee Trustee.
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if
any, in the form and in the manner provided by Section 313 of the
Trust Indenture Act. The Preferred Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture
Act.
SECTION 2.4. Periodic Reports to Preferred Guarantee Trustee.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 of the
Trust Indenture Act (if any) and the compliance certificate required
by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided
for in this Guarantee Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act may be given in the form of an
Officers' Certificate.
5
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee Agreement, but
no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 2.7. Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail,
first class postage prepaid, to the Holders of the Preferred
Securities, notices of all Events of Default known to the
Preferred Guarantee Trustee, unless such defaults have been
cured before the giving of such notice, provided that the
Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of
directors and/or Responsible Officers of the Preferred
Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the
Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred
Guarantee Trustee shall have received written notice as
provided in Section 9.3, or a Responsible Officer charged
with the administration of the Declaration shall have
obtained written notice, of such Event of Default.
SECTION 2.8 Conflicting Interests.
The Declaration shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Preferred Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the
Preferred Securities, and the Preferred Guarantee Trustee
shall not transfer this Guarantee Agreement to any Person
except a Holder of Preferred Securities exercising his or
6
her rights pursuant to Section 5.4(b) or to a Successor
Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as
Successor Preferred Guarantee Trustee. The right, title and
interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee
Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Guarantee
Agreement for the benefit of the Holders of the Preferred
Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform
only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read
into this Guarantee Agreement against the Preferred
Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6),
the Preferred Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Guarantee Agreement,
and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed
to relieve the Preferred Guarantee Trustee from liability
for its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events
of Default that may have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by
the express provisions of this Guarantee
Agreement, and the Preferred Guarantee Trustee
shall not be liable except for the performance of
such duties and obligations as are specifically
set forth in this Guarantee Agreement, and no
implied covenants or obligations shall be read
into this Guarantee Agreement against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred
7
Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the
opinions expressed therein, upon any certificates
or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such
certificates or opinions that by any provision
hereof are specifically required to be furnished
to the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform
to the requirements of this Guarantee Agreement;
(ii) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a
Responsible Officer of the Preferred Guarantee Trustee,
unless it shall be proved that the Preferred Guarantee
Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be
liable with respect to any action taken or omitted
to be taken by it in good faith in accordance with
the direction of the Holders of not less than a
Majority in liquidation amount of the Preferred
Securities relating to the time, method and place
of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or
exercising any trust or power conferred upon the
Preferred Guarantee Trustee under this Guarantee
Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Preferred Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial
liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the
terms of this Guarantee Agreement or adequate indemnity
for such risk or liability is not reasonably assured to
it.
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) the Preferred Guarantee Trustee may rely and shall be
fully protected in acting or refraining from acting
upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
8
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Preferred Guarantee Trustee shall
deem it desirable that a matter be proved or
established before taking, suffering or omitting
any action hereunder, the Preferred Guarantee
Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the
Guarantor;
(iv) the Preferred Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any
instrument (or any rerecording, refiling or
reregistration thereof);
(v) the Preferred Guarantee Trustee may consult with
counsel (which counsel may be counsel to the Guarantor
or any of its Affiliates and may include any of its
employees), and the written advice or opinion of such
counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or
opinion, and the Preferred Guarantee Trustee shall have
the right at any time to seek instructions concerning
the administration of this Guarantee Agreement from any
court of competent jurisdiction;
(vi) the Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Guarantee Agreement at the request
or direction of any Holder, unless such Holder shall
have provided to the Preferred Guarantee Trustee such
adequate security and indemnity as would satisfy a
reasonable person in the position of the Preferred
Guarantee Trustee against the costs, expenses
(including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying
with such request or direction, including such
reasonable advances as may be requested by the
Preferred Guarantee Trustee; provided that, nothing
9
contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this
Guarantee Agreement;
(vii) the Preferred Guarantee Trustee shall not be bound
to make any investigation into the facts or
matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice,
request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or
other paper or document, but the Preferred
Guarantee Trustee, in its discretion, may make
such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Preferred Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any
duties hereunder either directly or by or through
agents or attorneys, and the Preferred Guarantee
Trustee shall not be responsible for any
misconduct or negligence on the part of any agent
or attorney appointed with due care by it
hereunder;
(ix) any action taken by the Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders of the
Preferred Securities, and the signature of the
Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action,
and no third party shall be required to inquire as to
the authority of the Preferred Guarantee Trustee to so
act or as to its compliance with any of the terms and
provisions of this Guarantee Agreement, both of which
shall be conclusively evidenced by the Preferred
Guarantee Trustee's or its agent's taking such action;
and
(x) whenever in the administration of this Guarantee
Agreement the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to
enforcing any remedy or right or taking any other
action hereunder, the Preferred Guarantee Trustee (i)
may request instructions from the Holders of the
Preferred Securities, (ii) may refrain from enforcing
such remedy or right or taking such other action until
such instructions are received, and (iii) shall be
protected in acting in accordance with such
instructions.
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(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Preferred Guarantee
Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform
any such act or acts or to exercise any such right, power,
duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be
construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee.
The recitals contained in this Guarantee Agreement shall be taken as
the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The
Preferred Guarantee Trustee makes no representation as to the validity
or sufficiency of this Guarantee Agreement.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. Preferred Guarantee Trustee; Eligibility.
(a) There shall at all times be a Preferred Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such
laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision
or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually,
pursuant to law or to the requirements of the
supervising or examining authority referred to above,
then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so
published.
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(b) If at any time the Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Preferred
Guarantee Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Preferred Guarantee Trustee
and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustees.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the
Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor
Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Preferred Guarantee Trustee
shall have been appointed or until its removal or
resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the
Preferred Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed
by such Successor Preferred Guarantee Trustee and delivered
to the Guarantor and the resigning Preferred Guarantee
Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery to the Guarantor
of an instrument of resignation, the resigning Preferred
Guarantee Trustee may petition a court of competent
jurisdiction for appointment of a Successor Preferred
Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper,
appoint a Successor Preferred Guarantee Trustee.
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ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor
to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against
the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express
or implied agreement, covenant, term or condition relating
to the Preferred Securities to be performed or observed by
the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price,
Liquidation Distribution or any other sums payable under the
terms of the Preferred Securities or the extension of time
for the performance of any other obligation under, arising
out of, or in connection with, the Preferred Securities
(other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any
interest payment period on the Debentures);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Holders
pursuant to the terms of the Preferred Securities, or any
action on the part of the Issuer granting indulgence or
extension of any kind;
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(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or
other similar proceedings affecting, the Issuer or any of
the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any
of the foregoing.
SECTION 5.4. Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee in respect of
this Guarantee Agreement or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this
Guarantee Agreement.
(b) If the Preferred Guarantee Trustee fails to enforce this
Guarantee Agreement, any Holder of Preferred Securities may,
after such Holder's written request to the Preferred
Guarantee Trustee to enforce this Guarantee Agreement,
institute a legal proceeding directly against the Guarantor
to enforce its rights under this Guarantee Agreement,
without first instituting a legal proceeding against the
Issuer, the Preferred Guarantee Trustee or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. The Guarantor agrees that this Guarantee Agreement shall
not be discharged except by payment of the Guarantee Payments in full
and by complete performance of all obligations of the Guarantor
contained in this Guarantee Agreement.
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SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Guarantee
Agreement; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) be entitled to
enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee Agreement, if, at
the time of any such payment, any amounts are due and unpaid under
this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees
to hold such amount in trust for the Holders and to pay over such
amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the
Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant
to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default, or an event of default under the
Declaration, or if the Guarantor has given notice of its selection of
an extended interest period with respect to the Debentures and such
period, or any extension thereof, is continuing, then, in each case,
(a) the Guarantor shall not declare or pay any dividend on, or make
any distribution with respect to, or redeem, purchase, acquire or make
a liquidation payment with respect to, any of its capital stock and
(b) the Guarantor shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities
issued by the Guarantor which rank pari passu with or junior to the
Debentures; provided that the foregoing restrictions shall not apply
to (i) repurchases, redemptions or other acquisitions of shares of
capital stock of the Guarantor (A) in connection with any employment
contract, benefit plan or other similar arrangement with or for the
benefit of any one or more employees, officers, directors or
consultants, (B) in connection with a dividend reinvestment or
stockholder stock purchase plan or (C) in connection with the issuance
of capital stock of the Guarantor (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
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transaction entered into prior to such extended interest period, (ii)
an exchange, redemption or conversion of any class or series of the
Guarantor's capital stock (or any capital stock of a subsidiary of the
Guarantor) for any class or series of the Guarantor's capital stock or
of any class or series of the Guarantor's indebtedness for any class
or series of the Guarantor's capital stock, (iii) the purchase of
fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) any
declaration of a dividend in connection with any stockholder's rights
plan, or the issuance of rights, stock or other property under any
stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, (v) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu
with or junior to such stock, or (vi) payments by the Guarantor under
this Guarantee or under any similar guarantee by the Guarantor with
respect to any securities of its subsidiaries, provided the proceeds
from the issuance of such securities were used to purchase junior
subordinated deferrable interest debentures issued by such subsidiary.
In addition, so long as any Preferred Securities remain outstanding,
the Guarantor (x) will remain the sole direct or indirect owner of all
the outstanding Common Securities and shall not cause or permit the
Common Securities to be transferred except to the extent such transfer
is permitted under the Declaration, provided that any permitted
successor of the Guarantor under the Indenture may succeed to the
Guarantor's ownership of the Common Securities and (y) will use its
reasonable efforts to cause the Trust to continue to be treated as a
grantor trust for United States federal income tax purposes except in
connection with a distribution of Debentures.
SECTION 6.2. Ranking.
This Guarantee Agreement will constitute an unsecured obligation of
the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, including the
Debentures, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any
guarantee now or hereafter entered into by the Guarantor in respect of
any preferred or preference stock of any Affiliate of the Guarantor,
and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate upon (i) full payment of the
Redemption Price of all Securities, (ii) the distribution of the
Debentures to the Holders of all of the Securities or (iii) full
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payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred
Securities or under this Guarantee Agreement.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this
Guarantee Agreement and in a manner that such Indemnified
Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this
Guarantee Agreement or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence
or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such
information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's
professional or expert competence and who has been selected
with reasonable care by or on behalf of the Guarantor,
including information, opinions, reports or statements as to
the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of
Preferred Securities might properly be paid.
SECTION 8.2. Indemnification.
(a) To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred
by such Indemnified Person by reason of any act or omission
performed or omitted by such Indemnified Person in good
faith in accordance with this Guarantee Agreement and in a
manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified
Person in accordance with this Guarantee Agreement, except
that no Indemnified Person shall be entitled to be
17
indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Guarantor prior
to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to
repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as
authorized in Section 8.2(a).
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding.
SECTION 9.2. Amendments.
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will
be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of at least 66-2/3% in liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to
the date upon which the voting percentages are determined) of all the
outstanding Preferred Securities. The provisions of Section 12.2 of
the Declaration with respect to meetings of Holders of the Securities
apply to the giving of such approval.
SECTION 9.3. Notices.
All notices provided for in this Guarantee Agreement shall be in
writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) If given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth
below (or such other address as the Preferred Guarantee
Trustee may give notice of to the Holders of the Preferred
Securities):
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Wilmington Trust Company
Xxxxxx Square North
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the
Guarantor may give notice of to the Holders of the Preferred
Securities):
NorthWestern Corporation
125 S. Dakota Avenue, Suite 1100
Sioux Falls, South Dakota 57104
(c) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address
of which no notice was given, such notice or other document shall be
deemed to have been delivered on the date of such refusal or inability
to deliver.
SECTION 9.4. Benefit.
The guarantee provided pursuant to Section 5.1 is solely for the
benefit of the Holders and the Preferred Guarantee Trustee and,
subject to Section 3.1(a), is not separately transferable from the
Preferred Securities.
SECTION 9.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
NORTHWESTERN CORPORATION
By:________________________________
Xxxxxxx X. Xxxxxxx
President and Chief
Operating Officer
WILMINGTON TRUST COMPANY,
as Preferred Guarantee Trustee
By:________________________________
Name:
Title:
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