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SECURITIES GUARANTEE AGREEMENT
Washington Water Power Capital I
Dated as of January 23, 1997
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THE WASHINGTON WATER POWER COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
SECURITIES GUARANTEE, DATED AS OF JANUARY 23, 1997*
SECURITIES
TRUST INDENTURE ACT SECTION GUARANTEE SECTION(S)
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Section 310(a)(1) . . . . . . . . . . . . . . 4.1(a)
(a)(2) . . . . . . . . . . . . . . 4.1(a)
(a)(3) . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . 2.8, 4.1(c), 4.1(d)
(c) . . . . . . . . . . . . . . Not Applicable
Section 311(a) . . . . . . . . . . . . . . 2.2(b)
(b) . . . . . . . . . . . . . . 2.2(b)
(c) . . . . . . . . . . . . . . Not Applicable
Section 312(a) . . . . . . . . . . . . . . 2.2(a)
(b) . . . . . . . . . . . . . . 2.2(b)
Section 313 . . . . . . . . . . . . . . 2.3
Section 314(a) . . . . . . . . . . . . . . 2.4
(b) . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . 2.5
(d) . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . 1.1 (Definition of
Officer's
Certificate
Section 315(a) . . . . . . . . . . . . . . 3.1(c)
(b) . . . . . . . . . . . . . . 2.7(a)
(c) . . . . . . . . . . . . . . 3.1(d)
(d) . . . . . . . . . . . . . . 3.1(e)
Section 316(a)(1) . . . . . . . . . . . . . . 2.6, 5.4(a)
(b) . . . . . . . . . . . . . . 5.4(b)
(c) . . . . . . . . . . . . . . Not Applicable
Section 317 . . . . . . . . . . . . . . 3.1(f)
Section 318 . . . . . . . . . . . . . . 2.1
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* This Reconciliation and Tie does not constitute part of the Securities
Guarantee and shall not affect the interpretation of any of its terms
or provisions.
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . 2
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 Guarantee Trustee . . . . . . . . . . 5
SECTION 2.4 Periodic Reports to Guarantee Trustee . . . . . . 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . 6
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . 6
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . 6
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee . . . . . 7
SECTION 3.2 Certain Rights of Guarantee Trustee . . . . . . . . . 8
SECTION 3.3 Not Responsible for Recitals or Issuance of
Guarantee Securities . . . . . . . . . . . . . . . 10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility . . . . . . . . . . 10
SECTION 4.2 Appointment, Removal and Resignation of Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . 12
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . 12
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . 13
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . 13
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . 14
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.2 Effect of Subordination Provisions; Termination . . 14
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . 15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Assignment . . . . . . . . . . . . . . . . . . . . 16
SECTION 9.2 Successors and Assigns . . . . . . . . . . . . . . 16
SECTION 9.3 Amendments . . . . . . . . . . . . . . . . . . . . 16
SECTION 9.4 Notices . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9.5 Benefit . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9.6 Governing Law . . . . . . . . . . . . . . . . . . . 17
SECTION 9.7 Counterparts . . . . . . . . . . . . . . . . . . . 18
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SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Securities Guarantee"), dated as
of January 23, 1997, is executed and delivered by The Washington Water
Power Company, a Washington corporation (the "Guarantor"), and Wilmington
Trust Company, a Delaware banking corporation, not in its individual
capacity, but solely as trustee (the "Guarantee Trustee"), for the benefit
of the Holders (as defined herein) from time to time of the Securities (as
defined herein) of Washington Water Power Capital I, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of January 23, 1997, among the trustees of
the Issuer named therein, the Guarantor, as sponsor, 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 Two Million and Four Hundred
Thousand securities, having an aggregate liquidation amount of $60,000,000,
designated the 7 7/8% Trust Originated Preferred Securities(SM), Series A
("TOPrS"(SM)) (the "Securities");
WHEREAS, as incentive for the Holders to purchase the Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the
extent set forth in this Securities Guarantee, to pay to the Holders of the
Securities the Guarantee Payments (as defined herein); and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Securities Guarantee for the benefit of the holders
of the Common Securities (as defined herein), except that if an Event of
Default (as defined in the Indenture), has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee Payments
(as defined in the Common Securities Guarantee) under the Common Securities
Guarantee are subordinated to the rights of Holders of Securities to
receive Guarantee Payments under this Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder
of Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Securities Guarantee
for the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
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In this Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Securities Guarantee but not
defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution
of this Securities Guarantee have the same meaning when used
in this Securities Guarantee unless otherwise defined in
this Securities Guarantee;
(c) a term defined anywhere in this Securities Guarantee has the
same meaning throughout;
(d) all references to "the Securities Guarantee" or "this
Securities Guarantee" are to this Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Securities Guarantee to Articles and
Sections are to Articles and Sections of this Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Securities Guarantee, unless
otherwise defined in this Securities Guarantee or unless the
context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required
by any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee
shall, at any particular time, be principally administered, which office at
the date of execution of this Agreement is located at Xxxxxx Square North,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
"Covered Person" means any Holder or beneficial owner of
Securities.
"Debentures" means the series of junior subordinated debt
securities of the Guarantor designated the 7 7/8% Junior Subordinated
Deferrable Interest Debentures, Series A, due 2037 held by the
Institutional Trustee of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Securities Guarantee.
"Guarantee Payments" means the following payments or
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distributions, without duplication, with respect to the Securities, to the
extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions that are required to be paid on such Securities to the extent
the Issuer shall have funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer shall have funds
available therefor, with respect to any 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 Securities as
provided in the Declaration), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the
Securities to the date of payment 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").
"Guarantee Trustee" means Wilmington Trust Company, a Delaware
banking corporation, until a Successor Guarantee Trustee has been appointed
and has accepted such appointment pursuant to the terms of this Securities
Guarantee and thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records
of the Issuer of any Securities; provided, however, that in determining
whether the holders of the requisite percentage of 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 Guarantee Trustee, any Affiliate
of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or
agents of the Guarantee Trustee.
"Indenture" means the Indenture dated as of January 1, 1997,
between the Guarantor (the "Debenture Issuer") and Wilmington Trust
Company, as trustee, as supplemented, 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 Holder(s) of 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 accrued and unpaid Distributions to the date upon which
the voting percentages are determined) of all Securities.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by an Authorized Officer of such Person. Any Officer's
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Certificate delivered with respect to compliance with a condition or
covenant provided for in this Securities Guarantee shall include:
(a) a statement that the officer signing the Officer's
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 the officer in rendering the Officer's
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the Guarantee
Trustee, including any vice president, any assistant vice president, any
assistant secretary, the treasurer, any assistant treasurer or other
officer of the Corporate Trust Office of the 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 Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section
4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Securities" means the Common Securities and the
Securities.
ARTICLE II
TRUST INDENTURE ACT
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SECTION 2.1 Trust Indenture Act; Application
(a) This Securities Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Securities
Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Guarantee Trustee with a
list, in such form as the Guarantee Trustee may reasonably require, of the
names and addresses of the Holders of the Securities ("List of Holders") as
of such date, (i) within 1 Business Day 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 Guarantee Trustee;
provided, however, 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 Guarantee Trustee by the
Guarantor. The Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee
Within 60 days after May 15 of each year, the Guarantee Trustee
shall provide to the Holders of the 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 Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee
The Guarantor shall provide to the Guarantee Trustee such
documents, reports and information as required by Section 314 (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.
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SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for
in this Securities Guarantee 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) may be
given in the form of an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Securities
may, by vote, on behalf of the Holders of all of the 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
Securities Guarantee, but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all Events of Default
actually known to a Responsible Officer of the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice; provided,
however, that the Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Guarantee Trustee shall have received
written notice, or a Responsible Officer of the Guarantee Trustee charged
with the administration of the Declaration shall have obtained actual
knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in
this Securities Guarantee 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
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee
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(a) This Securities Guarantee shall be held by the Guarantee
Trustee for the benefit of the Holders of the Securities, and the Guarantee
Trustee shall not transfer this Securities Guarantee to any Person except a
Holder of Securities exercising his or her rights pursuant to Section
5.4(b) or to a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Successor Guarantee Trustee.
The right, title and interest of the Guarantee Trustee shall automatically
vest in any Successor 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
Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Guarantee Trustee has occurred and is continuing, the
Guarantee Trustee shall enforce this Securities Guarantee for the benefit
of the Holders of the Securities.
(c) Except during the continuance of an Event of Default,
(i) the Guarantee Trustee undertakes to perform only such duties
as are specifically set forth in this Securities Guarantee, and no
implied covenants shall be read into this Securities Guarantee against
the Guarantee Trustee; and
(ii) in the absence of bad faith on its part, the Guarantee
Trustee may, with respect to Securities of such series, conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Guarantee Trustee and conforming to the requirements
of this Securities Guarantee; but in the case of any such certificates
or opinions which by any provisions hereof are specifically required
to be furnished to the Guarantee Trustee, the Guarantee Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Securities Guarantee.
(d) In case an Event of Default shall have occurred and be
continuing, the Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Securities Guarantee, 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.
(e) No provision of this Securities Guarantee shall be construed
to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) this subsection shall not be construed to limit the effect
of subsection (c) of this Section;
(ii) the Guarantee Trustee shall not be liable for any error of
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judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Securities Guarantee; and
(iv) no provision of this Securities Guarantee shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Guarantee
Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the
terms of this Securities Guarantee or indemnity, reasonably
satisfactory to the Guarantee Trustee, against such risk or liability
is not reasonably assured to it.
(f) The Guarantee Trustee shall be authorized to undertake all
actions set forth in Section 317(a) of the Trust Indenture Act.
SECTION 3.2 Certain Rights of Guarantee Trustee
(a) Subject to the provisions of Section 3.1 and to the
applicable provisions of the Trust Indenture Act:
(i) The Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any request, direction or act of the Guarantor contemplated
by this Securities Guarantee shall be sufficiently evidenced by an
Officer's Certificate, or as otherwise expressly provided herein.
(iii) Whenever, in the administration of this Securities
Guarantee the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any
action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officer's Certificate.
(iv) The Guarantee Trustee may consult with counsel of its
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selection, 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 reliance thereon such advice or
opinion; and any such counsel may be counsel to the Guarantor or any
of its Affiliates and may include any of its employees.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Securities
Guarantee at the request or direction of any Holder pursuant to this
Securities Guarantee, unless such Holder shall have offered to the
Guarantee Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in complying
with such request or direction.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Guarantee Trustee
shall determine to make any such further inquiry or investigation, it
shall (subject to applicable legal requirements) be permitted to
examine, during usual business hours, the books, records and premises
of the Issuer or the Guarantor, personally or by agent or attorney.
(vii) The 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 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.
(viii) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof.
(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Securities, and the signature
of the Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required
to inquire as to the authority of the Guarantee Trustee to so act or
as to its compliance with any of the terms and provisions of this
Securities Guarantee, both of which shall be conclusively evidenced by
the Guarantee Trustee's or its agent's taking such action.
(b) No provision of this Securities Guarantee shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which
the Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any
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such right, power, duty or obligation. No permissive or discretionary power
or authority available to the Guarantee Trustee shall be construed to be a
duty or obligation.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
Securities
The recitals contained in this Securities Guarantee shall be
taken as the statements of the Guarantor, and the Guarantee Trustee does
not assume any responsibility for their correctness. The Guarantee Trustee
makes no representation as to the validity or sufficiency of this
Securities Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility
(a) There shall at all times be a Guarantee Trustee which shall
be:
(i) a corporation organized and doing business under the laws of
the United States, any State or Territory thereof or the District of
Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least Fifty
Million Dollars ($50,000,000) and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority, or
(ii) if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least Fifty Million Dollars
($50,000,000) or the Dollar equivalent of the applicable foreign
currency and subject to supervision or examination by authority of
such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to
United States institutional trustees,
and, in either case, qualified and eligible under this Article and the
Trust Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of such supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
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eligible to so act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in
all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Guarantee Trustee shall be deemed to be specifically
described in this Securities Guarantee for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Guarantee Trustee
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except
during an Event of Default under the Indenture.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until his
death, removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing signed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days
after delivery of an instrument of removal or resignation, the Guarantee
Trustee resigning or being removed, as applicable, may petition any court
of competent jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may
deem proper and prescribe, appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Securities Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Guarantee Trustee all amounts accrued to the
date of such termination, removal or resignation.
15
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
Securities Guarantee 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 Securities Guarantee 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 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 Securities or
the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the 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 Securities,
or any action on the part of the Issuer granting indulgence or extension of
any kind;
16
(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
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
Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Guarantee
Trustee in respect of this Securities Guarantee or exercising any trust or
power conferred upon the Guarantee Trustee under this Securities Guarantee.
(b) If the Guarantee Trustee fails to enforce such Securities
Guarantee, any Holder of Securities may institute a legal proceeding
directly against the Guarantor to enforce the Guarantee Trustee's rights
under this Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other person or
entity. The Guarantor waives any right or remedy to require that any action
be brought first against the Issuer or any other person or entity before
proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Securities against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Securities Guarantee; provided,
17
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
Securities Guarantee, if, at the time of any such payment, any amounts are
due and unpaid under this Securities Guarantee. 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
Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Securities Guarantee notwithstanding the occurrence of any event referred
to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking
This Securities Guarantee 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 and (ii) pari passu with
the Common Securities Guarantee and any other guarantee now or hereafter
entered into by the Guarantor with respect to any preferred or capital
securities issued by any trust, partnership or other entity which is a
financing vehicle of the Guarantor, except that, where an Event of Default
(as defined in the Indenture) occurs and is continuing, the rights of
holders of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights to payment of Holders of Securities.
SECTION 6.2 Effect of Subordination Provisions; Termination
Notwithstanding anything contained herein to the contrary, other
than as provided in the immediately succeeding sentence, all the provisions
of this Securities Guarantee shall be subject to the provisions of this
Article Six, so far as the same may be applicable thereto.
Notwithstanding anything contained herein to the contrary, the
provisions of Section 6.1(i) shall be of no further effect with respect to
all or a portion of all other liabilities of the Guarantor, and this
Securities Guarantee shall no longer be subordinated in right of payment to
such other liabilities of the Guarantor, to the extent that the Guarantor
shall have delivered to the Guarantee Trustee a notice to such effect
specifying therein such other liabilities to which this Securities
18
Guarantee shall no longer be subordinated and shall have taken correlative
action with respect to the Common Securities Guarantee.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Securities Guarantee shall terminate upon (i) full payment
of the Redemption Price of all Securities, (ii) upon the distribution of
the Debentures to the Holders of all of the Securities or (iii) upon full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Securities
Guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any Holder of Securities must restore payment of any
sums paid under the Securities or under this Securities Guarantee.
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 Securities Guarantee 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 Securities Guarantee 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 Securities
might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
19
liability, damage, claim or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Assignment
The Guarantor may assign its obligations under this Securities
Guarantee and thereupon be released and discharged from all obligations
hereunder upon compliance with the conditions set forth in Section
1005(a)(i)-(iv) of the Indenture.
SECTION 9.2 Successors and Assigns
All guarantees and agreements contained in this Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the
Holders of the Securities then outstanding.
SECTION 9.3 Amendments
Except with respect to any changes that do not adversely affect
the rights of Holders (in which case no consent of Holders will be
required), this Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) of all the outstanding 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 9.4 Notices
All notices provided for in this Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee
Trustee may give notice of to the Holders of the Securities):
Wilmington Trust Company
00
Xxxxxx Xxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
(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 Securities):
The Washington Water Power Company
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Treasurer
Telecopy: (000) 000-0000
(c) If given to any Holder of 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 9.5 Benefit
This Securities Guarantee is solely for the benefit of the
Holders of the Securities and, subject to Section 3.1(a), is not separately
transferable from the Securities.
SECTION 9.6 Governing Law
THIS SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 9.7 Counterparts
This Securities Guarantee may contain more than one counterpart
of the signature page and this Securities Guarantee may be executed by the
affixing of the signature of each of the parties hereto to one of such
counterpart signature pages. All of such counterpart signature pages shall
be read as though one, and they shall have the same force and effect as
though all of the signers had signed a single signature page.
21
THIS SECURITIES GUARANTEE is executed as of the day and year
first above written.
THE WASHINGTON WATER POWER
COMPANY, as Guarantor
By: /s/ X.X. XXXXXXXX
----------------------------
Name: X.X. Xxxxxxxx
Title: Senior Vice President
and Chief Financial
Officer
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Guarantee Trustee
By: /s/ XXXXXX X. XXXXXXXXX
----------------------------
Name: Xxxxxx X. XxxXxxxxx
Title: Assistant Vice President
22
================================================
AMENDED AND RESTATED DECLARATION
OF TRUST
WASHINGTON WATER POWER CAPITAL I
Dated as of January 23, 1997
===============================================
23
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions .............................................. -2-
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application ......................... -7-
SECTION 2.2 Lists of Holders of Trust Securities ..................... -8-
SECTION 2.3 Reports by the Institutional Trustee ..................... -8-
SECTION 2.4 Periodic Reports to Institutional Trustee ................ -9-
SECTION 2.5 Evidence of Compliance with Conditions
Precedent ................................................ -9-
SECTION 2.6 Events of Default; Waiver ................................ -9-
SECTION 2.7 Notice of Event of Default ............................... -10-
ARTICLE III
ORGANIZATION
SECTION 3.1 Name ..................................................... -11-
SECTION 3.2 Office ................................................... -11-
SECTION 3.3 Purpose .................................................. -11-
SECTION 3.4 Authority ................................................ -11-
SECTION 3.5 Title to Property of the Trust ........................... -12-
SECTION 3.6 Powers and Duties of the Regular Trustees ................ -12-
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees ..... -15-
SECTION 3.8 Powers and Duties of the Institutional
Trustee .................................................. -16-
SECTION 3.9 Certain Duties and Responsibilities ...................... -18-
SECTION 3.10 Certain Rights of Institutional Trustee ................. -21-
SECTION 3.11 Delaware Trustee ........................................ -24-
SECTION 3.12 Execution of Documents .................................. -24-
SECTION 3.13 Not Responsible for Recitals or Issuance of
Trust Securities ........................................ -24-
SECTION 3.14 Duration of Trust ....................................... -25-
SECTION 3.15 Mergers ................................................. -25-
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities .................. -27-
SECTION 4.2 Responsibilities of the Sponsor .......................... -27-
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees ....................................... -28-
SECTION 5.2 Delaware Trustee ......................................... -28-
SECTION 5.3 Institutional Trustee; Eligibility ....................... -29-
SECTION 5.4 Certain Qualifications of Regular Trustees and Delaware
Trustee Generally ........................................ -30-
SECTION 5.5 Regular Trustees ......................................... -30-
SECTION 5.6 Delaware Trustee ......................................... -31-
SECTION 5.7 Appointment, Removal and Resignation of
Trustees ................................................. -31-
SECTION 5.8 Vacancies among Trustees ................................. -32-
SECTION 5.9 Effect of Vacancies ...................................... -33-
SECTION 5.10 Meetings ................................................. -33-
SECTION 5.11 Delegation of Power ...................................... -33-
Section 5.12 Merger, Conversion, Consolidation or
Succession to Business ................................... -34-
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions ............................................ -34-
24
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Trust
Securities ............................................... -35-
SECTION 7.2 Paying Agent ............................................. -36-
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust ..................................... -36-
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Trust Securities ............................. -37-
SECTION 9.2 Transfer of Certificates ................................. -38-
SECTION 9.3 Deemed Trust Security Holders ............................ -39-
SECTION 9.4 Security Certificates .................................... -39-
SECTION 9.5 Mutilated, Destroyed, Lost or Stolen
Certificates ............................................. -39-
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability ............................................... -40-
SECTION 10.2 Exculpation ............................................. -40-
SECTION 10.3 Fiduciary Duty .......................................... -41-
SECTION 10.4 Indemnification ......................................... -42-
SECTION 10.5 Outside Businesses ...................................... -45-
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year ............................................. -46-
SECTION 11.2 Certain Accounting Matters .............................. -46-
SECTION 11.3 Banking ................................................. -47-
SECTION 11.4 Withholding ............................................. -47-
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments .............................................. -48-
SECTION 12.2 Meetings of the Holders of Trust Securities;
Action by Written Consent ............................... -50-
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of
Institutional Trustee ................................... -52-
SECTION 13.2 Representations and Warranties of Delaware Trustee ...... -52-
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices ................................................. -53-
SECTION 14.2 Governing Law ........................................... -55-
SECTION 14.3 Intention of the Parties ................................ -55-
SECTION 14.4 Headings ................................................ -55-
SECTION 14.5 Successors and Assigns .................................. -55-
SECTION 14.6 Partial Enforceability .................................. -55-
SECTION 14.7 Counterparts ............................................ -55-
ANNEX I TERMS OF TRUST SECURITIES ................................. I-1
EXHIBIT A-1 FORM OF SECURITY CERTIFICATE .............................. X0-0
XXXXXXX X-0 XXXX XX XXXXXX SECURITY CERTIFICATE ....................... A2-1
25
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
------------------- -----------
310(a) ........................................... 5.3(a)
310(b) ........................................... 5.3(c)
310(c) ........................................... Inapplicable
311(a) ........................................... 2.2(b)
311(b) ........................................... 2.2(b)
311(c) ........................................... Inapplicable
312(a) ........................................... 2.2(a)
312(b) ........................................... 2.2(b)
313 .............................................. 2.3
314(a) ........................................... 2.4
314(b) ........................................... Inapplicable
314(c) ........................................... 2.5
314(d) ........................................... Inapplicable
314(e) ........................................... 1.1 (Definition
of Officer's
Certificate)
314(f) ........................................... Inapplicable
315(a) ........................................... 3.9(a)
315(b) ........................................... 2.7
315(c) ........................................... 3.9(b)
315(d) ........................................... 3.9(c)
316(a) ........................................... 2.6; Annex I,
Section 5
316(c) ........................................... 3.6(e)
317(a) ........................................... 3.8(h)
317(b) ........................................... 3.8(i)
318 .............................................. 2.1
----------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
