FORM OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
NWPS CAPITAL FINANCING I
Cross-Reference Table
for the Guarantee Agreement
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
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Section 310(a) . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . . . . . . . . . .4.1(c), 2.8
310(c) . . . . . . . . . . . . . . . . . . Not Applicable
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . Not Applicable
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313. . . . . . . . . . . . . . . . . . . . . . . . . .2.3
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . .2.4
314(b) . . . . . . . . . . . . . . . . . . Not Applicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . .2.5
314(d) . . . . . . . . . . . . . . . . . . Not Applicable
314(e) . . . . . . . . . . . . . . . . . . . . . 2.5, 3.2
314(f) . . . . . . . . . . . . . . . . . . . . . 2.1, 3.2
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
315(b) . . . . . . . . . . . . . . . . . . . . . . . .2.7
315(c) . . . . . . . . . . . . . . . . . . . . . . . .3.1
315(d) . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
Section 316(a) . . . . . . . . . . . . . . . . . . . .5.4(a), 2.6
316(b) . . . . . . . . . . . . . . . . . . . . . . . .5.3
316(c) . . . . . . . . . . . . . . . . . . . . . . . .2.2
Section 317(a) . . . . . . . . . . . . . . . . . . Not Applicable
317(b) . . . . . . . . . . . . . . . . . . Not Applicable
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . .2.1
318(c) . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
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Note: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Guarantee Agreement.
TABLE OF CONTENTS
ARTICLE I
Definitions and Interpretation
Page
----
SECTION 1.1. Definitions and Interpretation . . . . . . . . . . . .2
Affiliate. . . . . . . . . . . . . . . . . . . . . . .2
Common Securities. . . . . . . . . . . . . . . . . . .2
Covered Person . . . . . . . . . . . . . . . . . . . .2
Event of Default . . . . . . . . . . . . . . . . . . .2
Guarantee Payments . . . . . . . . . . . . . . . . . .2
Holder . . . . . . . . . . . . . . . . . . . . . . . .3
Indemnified Person . . . . . . . . . . . . . . . . . .3
Indenture. . . . . . . . . . . . . . . . . . . . . . .3
Majority in Liquidation amount of the Securities . . .3
Officers' Certificate. . . . . . . . . . . . . . . . .3
Person . . . . . . . . . . . . . . . . . . . . . . . .4
Preferred Guarantee Trust. . . . . . . . . . . . . . .4
Responsible Officer. . . . . . . . . . . . . . . . . .4
Successor Preferred Guarantee Trustee. . . . . . . . .4
Trust Indenture Act. . . . . . . . . . . . . . . . . .4
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application . . . . . . . . . . .5
SECTION 2.2. Lists of Holders of Securities . . . . . . . . . . . .5
SECTION 2.3. Reports by the Preferred Trust Guarantee . . . . . . .5
SECTION 2.4. Periodic Reports to Preferred Guarantee Trustee. . . .5
SECTION 2.5. Evidence of Compliance with Conditions Precedent . . .6
SECTION 2.6. Event of Default; Waiver . . . . . . . . . . . . . . .6
SECTION 2.7. Event of Default; Notice . . . . . . . . . . . . . . .6
SECTION 2.8. Conflicting Interests. . . . . . . . . . . . . . . . .7
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Note: This table of contents shall not, for any purpose, be deemed
to be a part of the Guarantee Agreement.
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ARTICLE III
Powers, Duties, Rights of
Preferred Guarantee Trustee
Page
----
SECTION 3.1. Powers and Duties of the Preferred Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . .7
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee. . . . .9
SECTION 3.3. Not Responsible for Recitals or Issuance of
Guarantee . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
Preferred Guarantee Trustee
SECTION 4.1. Preferred Guarantee Trustee; Eligibility . . . . . . 11
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustees. . . . . . . . . . 12
ARTICLE V
Guarantee
SECTION 5.1. Guarantee. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2. Waiver of Notice and Demand. . . . . . . . . . . . . 13
SECTION 5.3. Obligations Not Affected . . . . . . . . . . . . . . 13
SECTION 5.4. Rights of Holders. . . . . . . . . . . . . . . . . . 14
SECTION 5.5. Guarantee of Payment . . . . . . . . . . . . . . . . 15
SECTION 5.6. Subrogation. . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7. Independent Obligations. . . . . . . . . . . . . . . 15
ARTICLE VI
Limitations of Transactions; Subordination
SECTION 6.1. Limitation of Transactions . . . . . . . . . . . . . 15
SECTION 6.2. Ranking. . . . . . . . . . . . . . . . . . . . . . . 16
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Note: This table of contents shall not, for any purpose, be deemed
to be a part of the Guarantee Agreement.
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ARTICLE VII
Termination
Page
----
SECTION 7.1. Termination. . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII
Indemnification
SECTION 8.1. Exculpation. . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.2. Indemnification. . . . . . . . . . . . . . . . . . . 17
ARTICLE IX
Miscellaneous
SECTION 9.1. Successors and Assigns . . . . . . . . . . . . . . . 18
SECTION 9.2. Amendments . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.3. Notices. . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.4. Benefit. . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.5. Governing Law. . . . . . . . . . . . . . . . . . . . 19
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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Note: This table of contents shall not, for any purpose, be deemed
to be a part of the Guarantee Agreement.
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FORM OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
Dated as of __________, 1995
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
_______, 1995, is executed and delivered by Northwestern Public
Service Company, a Delaware corporation (the "Guarantor"), and
Wilmington Trust Company, a Delaware banking corporation, not in
its individual capacity but solely 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 NWPS Capital Financing I, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of _________, 1995, 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 $__________ aggregate stated
liquidation amount of Preferred Securities designated the ___%
Trust Preferred Capital Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this
Guarantee Agreement, to pay to the Holders of the Preferred
Securities the Guarantee Payments (as defined herein) and to
make certain other payments on the terms and conditions set
forth herein;
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee
Agreement") in substantially identical terms to this Guarantee
Agreement 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 (as defined herein)), has
occurred and is continuing, the rights of holders of the Common
Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders
of Preferred Securities to receive Guarantee Payments under this
Guarantee Agreement;
NOW, THEREFORE, in consideration of the purchase by each Holder
of Preferred Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Guarantee Agreement for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but
not defined in the preamble above or otherwise in this
Guarantee Agreement have the respective meanings
assigned to them in the Declaration as in effect on
the date hereof;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as
modified, supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this
Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless
otherwise defined in this Guarantee Agreement or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 promulgated under the Securities Act of 1933, as amended, or
any successor rule thereunder.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"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 accrued and unpaid Distributions (as defined in
the Declaration) that are required to be paid on such Preferred
Securities to the extent the
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Company has made a payment of interest
or principal on the Subordinated Debt Securities (ii) the
redemption price, including all accrued and unpaid Distributions
to the date of redemption (the "Redemption Price") to the extent
the Company has made a payment of interest or principal on the
Subordinated Debt Securities, 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
upon the maturity or redemption of the Subordinated Debt Securities), 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 to
the extent the Issuer has funds legally available therefor, and (b) the amount
of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer (in either case, the "Liquidation Distribution").
If an event of default 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 the Preferred
Securities 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 __________, 1995,
among the Guarantor (the "Debenture Issuer") and The Chase
Manhattan Bank (N.A.), as trustee and any indenture supplemental
thereto pursuant to which certain subordinated debt securities
of the Debenture Issuer are to be issued to the Property Trustee
of the Issuer.
"Majority in liquidation amount of the Securities" means, except
as provided by the Trust Indenture Act, a vote by 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.
"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:
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(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer
in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express
an informed opinion as to whether or not such covenant
or condition has been complied with; and
(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.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions
of the Trust Indenture Act that are required to be part
of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with
the duties imposed by Section 310 to 317, inclusive, of
the Trust Indenture Act, such imposed duties shall
control.
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 ("List of Holders") as of such date, (i)
within 14 days after January 1 and June 30 of each
year, and (ii) at any other time within 30 days of
receipt by the Guarantor of a written request for a
List of Holders as of a date no more than 14 days
before such List of Holders is given to the Preferred
Guarantee Trustee, provided that the Guarantor shall
not be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most
recent List of Holders given to the Preferred Guarantee
Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and 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
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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 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.
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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 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.
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(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 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
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(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
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, 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. Such counsel may be
counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The
Preferred Guarantee Trustee shall have the
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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 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. 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
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(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 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
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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 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
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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
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
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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;
(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.
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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 unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the
Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding
the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default, or an Event of Default
under the Declaration, or if the Guarantor has given notice of
its selection of an Extension Period (as defined in the
Indenture) and such period or any extension thereof, is
continuing, then, in each case, (a) the Guarantor shall not
declare or pay any dividend on, or make any distribution with
respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock and (b) the
Guarantor shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Guarantor which rank pari passu with or
junior to the Debentures; provided that the
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foregoing restriction in this Section 6.1 (a) shall not apply to
any stock dividends paid by the Guarantor where the dividend stock
is the same stock as that on which the dividend is being paid or
to any payment on this Guarantee. 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 Declaration, 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, including the Debentures, (ii) pari passu with the
most senior preferred or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate upon (i) full payment of
the Redemption Price of all Securities, (ii) the distribution of
the Debentures to the Holders of all of the 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.
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
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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
by this 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.
(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).
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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
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 9.3. 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
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
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):
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Northwestern Public Service Company
33 Third Street, S.E.
Huron, South Dakota 57350
(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.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
Northwestern Public Service
Company
By:
---------------------------
Name:
Title:
Wilmington Trust Company,
as Preferred Guarantee Trustee
By:
---------------------------
Name:
Title:
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