EXHIBIT 4.6
PREFERRED SECURITIES GUARANTEE AGREEMENT
NORTHWESTERN CAPITAL FINANCING III
CROSS-REFERENCE TABLE
FOR THE GUARANTEE AGREEMENT
SECTION OF SECTION OF
TRUST INDENTURE ACT GUARANTEE
OF 1939, AS AMENDED AGREEMENT
Section 310(a)....................................................................................4.1(a)
310(b)...............................................................................4.1(c), 2.8
310(c)............................................................................Not Applicable
Section 311(a)....................................................................................2.2(b)
311(b)....................................................................................2.2(b)
311(c)............................................................................Not Applicable
Section 312(a)....................................................................................2.2(a)
312(b)....................................................................................2.2(b)
Section 313..........................................................................................2.3
Section 314(a).......................................................................................2.4
314(b)............................................................................Not Applicable
314(c).......................................................................................2.5
314(d)............................................................................Not Applicable
314(e).............................................................................2.4, 2.5, 3.2
314(f)..................................................................................2.1, 3.2
Section 315(a)....................................................................................3.1(d)
315(b).......................................................................................2.6
315(c).......................................................................................3.1
315(d)....................................................................................3.1(d)
Section 316(a)...............................................................................5.4(a), 2.6
316(b).......................................................................................5.3
316(c).......................................................................................2.2
Section 317(a)............................................................................Not Applicable
317(b)............................................................................Not Applicable
Section 318(a)....................................................................................2.1(b)
318(b).......................................................................................2.1
318(c)....................................................................................2.1(a)
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Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Guarantee Agreement.
TABLE OF CONTENTS
PAGE
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ARTICLE I
Definitions and Interpretation
SECTION 1.1. Definitions and Interpretation....................................................1
Affiliate.........................................................................2
Common Securities.................................................................2
Common Securities Guarantee Agreement.............................................2
Covered Person....................................................................2
Event of Default..................................................................2
Guarantee Payments................................................................3
Holder............................................................................3
Indemnified Person................................................................3
Indenture.........................................................................3
Majority in liquidation amount of the Securities..................................3
Officers' Certificate.............................................................3
Person............................................................................4
Preferred Guarantee Trustee.......................................................4
Responsible Officer...............................................................4
Successor Preferred Guarantee Trustee.............................................4
Trust Indenture Act...............................................................4
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application..................................................4
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...................................5
SECTION 2.5. Evidence of Compliance with Conditions Precedent..................................5
SECTION 2.6. Events of Default; Waiver.........................................................6
SECTION 2.7. Conflicting Interests.............................................................6
ARTICLE III
Powers, Duties and Rights of Preferred Guarantee Trustee
TABLE OF CONTENTS
(continued)
PAGE
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SECTION 3.1. Powers and Duties of the Preferred Guarantee Trustee..............................6
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee.....................................8
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee............................10
ARTICLE IV
Preferred Guarantee Trustee
SECTION 4.1. Preferred Guarantee Trustee; Eligibility.........................................11
SECTION 4.2. Appointment, Removal and Resignation of Preferred Guarantee Trustees.............12
ARTICLE V
Guarantee
SECTION 5.1. Guarantee........................................................................12
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
Limitation of Transactions; Subordination
SECTION 6.1. Limitation of Transactions.......................................................15
SECTION 6.2. Ranking..........................................................................15
ARTICLE VII
Termination
TABLE OF CONTENTS
(continued)
PAGE
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SECTION 7.1. Termination......................................................................16
ARTICLE VIII
Indemnification
SECTION 8.1. Exculpation......................................................................17
SECTION 8.2. Indemnification..................................................................17
ARTICLE IX
Miscellaneous
SECTION 9.1. Successors and Assigns...........................................................18
SECTION 9.2. Amendments.......................................................................18
SECTION 9.3. Notices..........................................................................18
SECTION 9.4. Benefit..........................................................................19
SECTION 9.5. Governing Law....................................................................19
TESTIMONIUM............................................................................................20
SIGNATURES.............................................................................................20
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Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Guarantee Agreement.
PREFERRED SECURITIES GUARANTEE AGREEMENT
DATED AS OF JANUARY 31, 2002
This GUARANTEE AGREEMENT ("GUARANTEE AGREEMENT"), dated as of January 31,
2002, is executed and delivered by NorthWestern Corporation, a Delaware
corporation (the "GUARANTOR"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as trustee for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of NorthWestern Capital Financing III, a Delaware
statutory business trust (the "ISSUER").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"DECLARATION"), dated as of January 31, 2002, among the trustees of the Issuer
named therein, the Guarantor, as sponsor of the Issuer, and the holders from
time to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof $100,000,000 aggregate stated liquidation
amount of Preferred Securities, and if the Overallotment Option (as defined in
the Declaration) is exercised, an aggregate stated liquidation amount of up to
$115,000,000, designated the 8.10% Trust Preferred Securities (the "PREFERRED
SECURITIES");
WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee Agreement, to pay to the Holders of the Preferred
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS AND INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not defined in
the preamble above or otherwise in this Guarantee Agreement have the
respective meanings assigned to them in the Declaration as in effect
on the date hereof;
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(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule 405
promulgated under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"COMMON SECURITIES GUARANTEE AGREEMENT" means the guarantee agreement dated
the date hereof executed by the Guarantor for the benefit of the holders from
time to time of the Common Securities.
"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement.
"GUARANTEE PAYMENTS" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Issuer: (i) any accumulated and unpaid Distributions (as defined in
the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer has funds legally available therefor, (ii) the redemption
price, including all accumulated and unpaid Distributions to the date of
redemption (the "REDEMPTION PRICE"), to the extent the Issuer has funds legally
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 or a redemption of all the Preferred Securities),
the lesser of (a) the aggregate of the liquidation amount and all accumulated
and unpaid Distributions on the Preferred Securities to the date of payment to
the extent the Issuer has funds legally available
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therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer (in either case, the
"LIQUIDATION DISTRIBUTION"). If an event of default under the Indenture has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments under this Guarantee Agreement.
"HOLDER" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the Holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"INDEMNIFIED PERSON" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives or agents of the Preferred
Guarantee Trustee.
"INDENTURE" means the Indenture dated as of August 1, 1995, as
supplemented, between the Guarantor (the "DEBENTURE ISSUER") and JPMorgan Chase
Bank (as successor to The Chase Manhattan Bank), as trustee, and any indenture
supplemental thereto pursuant to which certain subordinated debt securities of
the Debenture Issuer are to be issued to the Property Trustee of the Issuer.
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided by the Trust Indenture Act, a vote by the Holders of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all Preferred Securities.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an
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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 each such officer, such
condition or covenant has been complied with.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PREFERRED GUARANTEE TRUSTEE" means Wilmington Trust Company, in its
capacity as trustee hereunder and not in its individual capacity, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement and thereafter
means each such Successor Preferred Guarantee Trustee.
"RESPONSIBLE OFFICER" means, with respect to the Preferred Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer or any other officer of the Corporate Trust
Department of the Preferred Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"SUCCESSOR PREFERRED GUARANTEE TRUSTEE" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions;
and
(b) if and to the extent that any provision of this Guarantee Agreement
limits,
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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 name and addresses of the Holders of the Preferred
Securities as of such date, (i) within 14 days after January 1 and
June 30 of each year, and (ii) at any other time within 30 days of
receipt by the Guarantor of a written request for a list of holders as
of a date no more than 14 days before such list of holders is given to
the Preferred Guarantee Trustee, provided that the Guarantor shall not
be obligated to provide such list of holders at any time the list of
holders does not differ from the most recent list of holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred
Guarantee Trustee may destroy any list of holders previously given to
it on receipt of a new list of holders.
(b) The Preferred Guarantee Trustee shall comply with 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 Guarantee
Agreement that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
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
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Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Guarantee Agreement, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Preferred Securities, notices
of all Events of Default known to the Preferred Guarantee Trustee,
unless such defaults have been cured before the giving of such notice,
provided that the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or
Responsible Officers of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of
the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or a Responsible Officer charged with
the administration of the Declaration shall have obtained written
notice, of such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS.
The Declaration shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Preferred Guarantee
Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder of Preferred Securities
exercising his or 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
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appointment to act as Successor Preferred Guarantee Trustee. The
right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to
the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Guarantee Agreement for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee Agreement, and no implied
covenants shall be read into this Guarantee Agreement against the
Preferred Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6), the
Preferred Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Preferred Guarantee
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in
this Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement
against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or
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opinions furnished to the Preferred Guarantee Trustee and
conforming to the requirements of this Guarantee Agreement;
but in the case of any such certificates or opinions that by
any provision hereof are specifically required to be
furnished to the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements
of this Declaration;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Preferred Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee
Trustee, or exercising any trust or power conferred upon the
Preferred Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or
powers, if the Preferred Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity such risk or liability
is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Preferred Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
believed by it to be
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genuine and to have been signed, sent or presented by the proper
party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by a
Direction or an Officers' Certificate;
(iii) whenever, in the administration of this Guarantee Agreement, the
Preferred Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the absence
of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor;
(iv) the Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof);
(v) the Preferred Guarantee Trustee may consult with counsel (which
counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees), and the written advice or
opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in accordance with such advice or opinion, and the Preferred
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction;
(vi) the Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Preferred Guarantee
Trustee such adequate security and indemnity as would satisfy a
reasonable person in the position of the Preferred Guarantee
Trustee against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Preferred
Guarantee Trustee; provided that, nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the Preferred
Guarantee Trustee, upon the occurrence of an Event
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of Default, of its obligation to exercise the rights and powers
vested in it by this Guarantee Agreement;
(vii) the Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Preferred Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it
may see fit;
(viii) the Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with
due care by it hereunder;
(ix) any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents
alone shall be sufficient and effective to perform any such
action, and no third party shall be required to inquire as to the
authority of the Preferred Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this
Guarantee Agreement, both of which shall be conclusively
evidenced by the Preferred Guarantee Trustee's or its agent's
taking such action; and
(x) whenever in the administration of this Guarantee Agreement the
Preferred Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of the
Preferred Securities, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are
received, and (iii) shall be protected in acting in accordance
with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred
or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act
or acts or to exercise any such
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right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be
a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE. The
recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Preferred Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted
by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for
the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee
Trustee shall immediately resign in the manner and with the effect set
out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Preferred Guarantee Trustee and Guarantor
shall in all respects comply
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with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEES.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered
to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee
Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred
Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee
Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation,
the resigning Preferred Guarantee Trustee may petition a court of
competent jurisdiction for appointment of a Successor Preferred
Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Preferred
Guarantee Trustee.
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
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causing the Issuer to pay such amounts to the Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period
on the Debentures or any extension of the maturity date of the
Debentures permitted by the Indenture);
(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;
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(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Guarantee Agreement or exercising
any trust or power conferred upon the Preferred Guarantee Trustee
under this Guarantee Agreement.
(b) If the Preferred Guarantee Trustee fails to enforce this Guarantee
Agreement, any Holder of Preferred Securities may, after such Holder's
written request to the Preferred Guarantee Trustee to enforce this
Guarantee Agreement, institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement,
without first instituting a legal proceeding against the Issuer, the
Preferred Guarantee Trustee or any other Person.
SECTION 5.5. GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not of
collection. The Guarantor agrees that this Guarantee Agreement shall not be
discharged except by payment of the Guarantee Payments in full and by complete
performance of all obligations of the Guarantor contained in this Guarantee
Agreement.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Preferred Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Guarantee Agreement; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any right that it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and
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unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, if there shall have
occurred an Event of Default, or an event of which the Guarantor has actual
knowledge that, with the giving of notice or the lapse of time or both, would
constitute an event of default under the Indenture and in respect of which the
Guarantor shall not have taken reasonable steps to cure, or if the Guarantor has
given notice of its selection of an extended interest period with respect to the
Debentures and such period, or any extension thereof, is continuing, then, in
each case, (a) the Guarantor shall not declare or pay any dividend on, or make
any distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock, (b) the Guarantor
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees of
indebtedness for money borrowed) issued by the Guarantor which rank PARI PASSU
with or junior to the Debentures, and (c) the Guarantor shall not make any
payments with respect to any guarantee of a debt security of any of the
Guarantor's subsidiaries (including other guarantees) if such guarantee ranks
PARI PASSU with or junior to the Debentures; provided that the foregoing
restrictions in this Section 6.1(a) shall not apply to (i) repurchases,
redemptions or other acquisitions of shares of capital stock of the Guarantor
(A) in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants or (B) in connection with a dividend reinvestment or
stockholder stock purchase plan, (ii) the issuance of common stock of the
Guarantor (or securities convertible into or exercisable for such common stock)
as consideration in an acquisition transaction entered into prior to such
extended interest payment period, (iii) the reclassification of the capital
stock of the Guarantor or the exchange or conversion of any class or series of
Guarantor's capital stock for another class or series of Guarantor's capital
stock, provided that such reclassification, exchange or conversion does not
include any cash payments, (iv) the purchase of fractional interests
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in shares of Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(v) the issuance of the capital stock of the Guarantor in connection with the
exercise of certain rights on convertible securities, (vi) any dividend in the
form of common stock, warrants, options or other rights where the dividend stock
or the stock issuable upon exercise of such warrants, options or other rights is
common stock, or (vii) payments by Guarantor under this Guarantee or under any
similar guarantee by Guarantor with respect to any securities of its
subsidiaries that are made on a pro rata basis on all such guarantees, provided
the proceeds from the issuance of such securities were used to purchase junior
subordinated deferrable interest debentures issued by such subsidiary. In
addition, so long as any Preferred Securities remain outstanding, the Guarantor
(i) will remain the sole direct or indirect owner of all the outstanding Common
Securities and shall not cause or permit the Common Securities to be transferred
except to the extent such transfer is permitted under the Indenture, provided
that any permitted successor of the Guarantor under the Indenture may succeed to
the Guarantor's ownership of the Common Securities and (ii) will use its
reasonable efforts to cause the Trust to continue to be treated as a grantor
trust for United States federal income tax purposes except in connection with a
distribution of Debentures.
SECTION 6.2. RANKING.
This Guarantee Agreement will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Guarantor, other than those obligations or liabilities
made PARI PASSU or subordinate by their terms, (ii) PARI PASSU with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION.
This Guarantee Agreement shall terminate upon (i) full payment of the
Redemption Price of all Securities, (ii) the distribution of the Debentures to
the Holders of all of the Preferred Securities or (iii) full payment of the
amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of Preferred Securities must restore payment of any sums paid under the
Preferred Securities or under this Preferred Securities Guarantee.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee Agreement and in a manner that such
Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Guarantee
Agreement or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any
Person as to matters the Indemnified Person reasonably believes are
within such other Person's professional or expert competence and who
has been selected with reasonable care by or on behalf of the
Guarantor, including information, opinions, reports or statements as
to the value and amount of the assets, liabilities, profits, losses,
or any other facts pertinent to the existence and amount of assets
from which Distributions to Holders of Preferred Securities might
properly be paid.
SECTION 8.2. INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Guarantor shall
indemnify and hold harmless each Indemnified Person from and against
any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Guarantee Agreement and
in a manner such Indemnified Person reasonably believed to be within
the scope of authority conferred on such Indemnified Person in
accordance with this Guarantee Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or
omissions.
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(b) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the
Guarantor of an undertaking by or on behalf of the Indemnified Person
to repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified as authorized in Section
8.2(a).
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding.
SECTION 9.2. AMENDMENTS.
Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Guarantee Agreement may only be amended with the prior approval of the
Holders of at least 66-2/3% in liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all the outstanding Preferred Securities. The provisions of
Section 12.2 of the Declaration with respect to meetings of Holders of the
Securities apply to the giving of such approval.
SECTION 9.3. NOTICES.
All notices provided for in this Guarantee Agreement shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other
address as the Preferred Guarantee Trustee may give notice of to the
Holders of the Preferred Securities):
Wilmington Trust Company
Xxxxxx Square North
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0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of
to the Holders of the Preferred Securities):
NorthWestern Corporation
125 S. Dakota Avenue, Suite 1100
Sioux Falls, South Dakota 57104
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4. BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders of the
Preferred Securities and the Preferred Guarantee Trustee and, subject to Section
3.1(a), is not separately transferable from the Preferred Securities.
SECTION 9.5. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
NORTHWESTERN CORPORATION
By: /s/ Xxxx X. Xxxx
-------------------------------------
Name: Xxxx X. Xxxx
Title: Vice President - Finance and Chief
Financial Officer
WILMINGTON TRUST COMPANY,
as Preferred Guarantee Trustee
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: Financial Services Officer
[SIGNATURE PAGE TO PREFERRED SECURITIES GUARANTEE AGREEMENT]
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