EXHIBIT 4(a)-14
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PREFERRED SECURITIES GUARANTEE AGREEMENT
Washington Water Power Capital I
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_
PREFERRED SECURITIES
TRUST INDENTURE ACT SECTION GUARANTEE SECTIONS
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.
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TABLE OF CONTENTS
Page
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
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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 I, 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 A (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.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION
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 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
Preferred 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 Preferred Securities.
"DEBENTURES" means the series of junior subordinated
debt securities of the Guarantor designated the ____% Junior
Subordinated Deferrable Interest Debentures, Series A, due 20__
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 Preferred
Securities Guarantee.
"GUARANTEE PAYMENTS" means the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by the Issuer: (i) any
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 of the Issuer of any Preferred Securities; provided,
however, that in determining whether the holders of the requisite
percentage of Preferred Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include
the Guarantor or any Affiliate of the Guarantor.
"INDEMNIFIED PERSON" means the Preferred Guarantee
Trustee, any Affiliate of the Preferred Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Preferred
Guarantee Trustee.
"INDENTURE" means the Indenture dated as of ______ 1,
199_, 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 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 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, 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 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 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 Guarantee Trustee possessing the
qualifications to act as Preferred Guarantee Trustee under
Section 4.1.
"TRUST INDENTURE ACT" means the Trust Indenture Act of
1939, as amended.
"TRUST SECURITIES" means the Common Securities and the
Preferred 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
Within 60 days after May 15 of each year, the Preferred
Guarantee Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE
The Guarantor shall provide to the Preferred Guarantee
Trustee such documents, reports and information as required by
Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture
Act.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
The Guarantor shall provide to the Preferred Guarantee
Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this 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
(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 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
(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
(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
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.
[PAGE BREAK]
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: _________
