EXHIBIT 4(a)-15
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PREFERRED SECURITIES GUARANTEE AGREEMENT
Washington Water Power Capital II
Dated as of ______, 199_
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THE WASHINGTON WATER POWER COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
PREFERRED SECURITIES GUARANTEE, DATED AS OF ________ 1, 199_*
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PREFERRED SECURITIES
TRUST INDENTURE ACT SECTION GUARANTEE SECTION(S)
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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
311(a) . . . . . . . . . . . . . . . . 2.2(b)
(b) . . . . . . . . . . . . . . . . . . . 2.2(b)
(c) . . . . . . . . . . . . . . . . . . . Not Applicable
312(a) . . . . . . . . . . . . . . . . 2.2(a)
(b) . . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . 2.4
(b) . . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . 2.5
(d) . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . 1.1 (Definition of
Officer's
Certificate
315(a) . . . . . . . . . . . . . . . . 3.1(c)
(b) . . . . . . . . . . . . . . . . . . . 2.7(a)
(c) . . . . . . . . . . . . . . . . . . . 3.1(d)
(d) . . . . . . . . . . . . . . . . . . . 3.1(e)
316(a)(1) . . . . . . . . . . . . . . . 2.6, 5.4(a)
(b) . . . . . . . . . . . . . . . . . . . 5.4(b)
(c) . . . . . . . . . . . . . . . . . . . Not Applicable
317 . . . . . . . . . . . . . . . . . . 3.1(f)
318 . . . . . . . . . . . . . . . . . . 2.1
_____________________________
* This Reconciliation and Tie does not constitute part of the Preferred
Securities Guarantee and shall not affect the interpretation of any of
its terms or provisions.
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 Preferred Guarantee Trustee . . . . . . . . 5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee . . . . 6
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
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 Securities . . . . . . . . . . . . . . . . . . 10
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility . . . . . . . . 11
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . 14
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . . 15
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.2 Effect of Subordination Provisions; Termination . . . . 15
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 Assignment . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9.2 Successors and Assigns . . . . . . . . . . . . . . . . . 17
SECTION 9.3 Amendments . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9.5 Benefit . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.6 Governing Law . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . 19
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of ______, 199_, is executed and delivered by The Washington Water
Power Company, a Washington corporation (the "Guarantor"), and Wilmington
Trust Company, a Delaware banking corporation, as trustee (the "Preferred
Guarantee Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Preferred Securities (as defined herein) of
Washington Water Power Capital II, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of ______, 199_, 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 __________ preferred securities,
having an aggregate liquidation amount of $___________, designated the
____% Trust Originated Preferred Securities, Series B (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 Preferred Securities Guarantee, to pay to
the Holders of the Preferred 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 Preferred 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 Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.
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 Preferred
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
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In this Preferred Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Preferred 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 Preferred Securities Guarantee have the same meaning
when used in this Preferred Securities Guarantee unless
otherwise defined in this Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended
from time to time;
(e) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Preferred Securities Guarantee,
unless otherwise defined in this Preferred 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
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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
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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
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undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred
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Guarantee Trustee at which the corporate trust business of the Preferred
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
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Preferred Securities.
"Debentures" means the series of junior subordinated debt
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securities of the Guarantor designated the ____% Junior Subordinated
Deferrable Interest Debentures, Series B, due 20__ held by the
Institutional Trustee of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
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payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
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without duplication, with respect to the Preferred 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 Preferred 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 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), the
lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Preferred 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").
"Holder" means any holder, as registered on the books and records
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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
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Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenturedated as of ______ 1,199_, between
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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
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provided by the Trust Indenture Act, a vote by Holder(s) 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 accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all
Preferred Securities.
"Officer's Certificate" means, with respect to any Person, a
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certificate signed by an Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Preferred 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,
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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, a
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Delaware banking corporation, until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment pursuant to the terms
of this Preferred Securities Guarantee and thereafter means each such
Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred
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Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred 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 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
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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
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amended.
"Trust Securities" means the Common Securities and the Preferred
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Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred 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 Preferred
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 Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Preferred
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 Preferred 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 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 Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
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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
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The Guarantor shall provide to the Preferred 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.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
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The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided
for in this Preferred 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 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 Preferred 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
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(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 actually known to a Responsible Officer of the Preferred
Guarantee Trustee, unless such defaults have been cured before the giving
of such notice; provided, however, that the Preferred Guarantee Trustee
shall be protected in withholding such notice if and so long as a
Responsible Officer 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, or a Responsible Officer of the
Preferred 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 Preferred 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
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
----------------------------------------------------
(a) This Preferred Securities Guarantee 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
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or 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 actually known to a Responsible
Officer of the Preferred Guarantee Trustee has occurred and is continuing,
the Preferred Guarantee Trustee shall enforce this Preferred Securities
Guarantee for the benefit of the Holders of the Preferred Securities.
(c) Except during the continuance of an Event of Default,
(i) the Preferred Guarantee Trustee undertakes to perform
only such duties as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants shall be read into this
Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(ii) in the absence of bad faith on its part, the Preferred
Guarantee Trustee may, with respect to Preferred 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 Preferred Guarantee Trustee and
conforming to the requirements of this Preferred 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
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 Preferred Securities Guarantee.
(d) In case an Event of Default shall have occurred and be
continuing, the Preferred Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Preferred 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 Preferred Securities Guarantee 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) this subsection shall not be construed to limit the effect
of subsection (c) of this Section;
(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 Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
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
Preferred Securities Guarantee or indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against such risk or liability is
not reasonably assured to it.
(f) The Preferred 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 Preferred Guarantee Trustee
---------------------------------------------
(a) Subject to the provisions of Section 3.1 and to the
applicable provisions of the Trust Indenture Act:
(i) The Preferred 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 Preferred Securities Guarantee shall be
sufficiently evidenced by an Officer's Certificate, or as otherwise
expressly provided herein.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee 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 conclusively rely
upon an Officer's Certificate.
(iv) The Preferred Guarantee Trustee may consult with
counsel of its 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 Preferred Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder
pursuant to this Preferred Securities Guarantee, unless such Holder
shall have offered to the Preferred 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 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,
and, if the Preferred 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 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.
(viii) The Preferred 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 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. 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 Preferred
Securities Guarantee, both of which shall be conclusively evidenced by
the Preferred Guarantee Trustee's or its agent's taking such action.
(b) No provision of this Preferred Securities Guarantee 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 or discretionary power or authority available to the Preferred
Guarantee Trustee shall be construed to be a duty or obligation.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
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Securities
----------
The recitals contained in this Preferred Securities Guarantee
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 Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
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(a) There shall at all times be a Preferred 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 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 (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 Preferred Guarantee Trustee shall be deemed to be
specifically described in this Preferred 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 Preferred Guarantee
-----------------------------------------------------------
Trustee
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(a) Subject to Section 4.2(b), the Preferred 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 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 his death, removal or resignation. The Preferred
Guarantee Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed 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 of an instrument of removal or resignation, the
Preferred Guarantee Trustee resigning or being removed, as applicable, may
petition any 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 and prescribe, appoint a
Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
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
Preferred 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 Preferred 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 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;
(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 of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee
Trustee under this Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such
Preferred Securities Guarantee, any Holder of Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce the
Preferred Guarantee Trustee's rights under this Preferred Securities
Guarantee, without first instituting a legal proceeding against the Issuer,
the Preferred 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 Preferred 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 Preferred Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Preferred
Securities Guarantee; 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 Preferred Securities Guarantee, if, at the
time of any such payment, any amounts are due and unpaid under this
Preferred 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 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
Preferred 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 Preferred 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
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 and the rights of the Guarantor or any
Affiliate of the Guarantor to payment in respect of Distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights to payment of Holders of Preferred 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 Preferred 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
Preferred 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 Preferred Guarantee Trustee a notice
to such effect specifying therein such other liabilities to which this
Preferred Securities 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 Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) upon full payment of the amounts payable in accordance
with the Declaration upon liquidation of the Issuer. Notwithstanding the
foregoing, this Preferred Securities Guarantee 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 Preferred 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 Preferred 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 Preferred 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 Preferred
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,
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 Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Assignment
----------
The Guarantor may assign its obligations under this Preferred
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 Preferred
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 Preferred 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 Preferred 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 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 9.4 Notices
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All notices provided for in this Preferred 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 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):
Wilmington Trust Company
Xxxxxx Square North
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 Preferred 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 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 9.5 Benefit
-------
This Preferred Securities Guarantee is solely for the benefit of
the Holders of the Preferred Securities and, subject to Section 3.1(a), is
not separately transferable from the Preferred Securities.
SECTION 9.6 Governing Law
-------------
THIS PREFERRED 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 Preferred Securities Guarantee may contain more than one
counterpart of the signature page and this Preferred 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.
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
THE WASHINGTON WATER POWER
COMPANY, as Guarantor
By:_________________________
Name: _____________
Title: _________
WILMINGTON TRUST COMPANY, as
Preferred Guarantee Trustee
By:_________________________
Name: _____________
Title: _________
