- --------------------------------------------------------------------------------
NORTHWESTERN CORPORATION
TO
THE BANK OF NEW YORK
AND
MARYBETH LEWICKI
As Trustees under Mortgage and
Deed of Trust, dated as of
October 1, 1945, with NorthWestern Corporation
-----------------
TWENTY-THIRD SUPPLEMENTAL INDENTURE
Providing, among other things, for
the succession of MaryBeth Lewicki to Douglas J. MacInnes
as Co-Trustee under such Mortgage and Deed of Trust
and
First Mortgage Bonds, Credit Agreement (2002) Series, due 2006
-----------------
Dated as of February 1, 2003
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TWENTY-THIRD SUPPLEMENTAL INDENTURE
--------------
THIS TWENTY-THIRD SUPPLEMENTAL INDENTURE, dated as of February
1, 2003, between NORTHWESTERN CORPORATION, a corporation duly incorporated and
existing under the laws of the State of Delaware (hereinafter called the
"Company"), having its principal office at 125 S. Dakota Avenue, Suite 1100,
Sioux Falls, South Dakota 57104, and THE BANK OF NEW YORK (hereinafter called
the "Corporate Trustee"), a corporation of the State of New York, whose
principal corporate trust office is located at 101 Barclay Street, New York, New
York 10286 (successor to MORGAN GUARANTY TRUST COMPANY OF NEW YORK (formerly
Guaranty Trust Company of New York)), and MARYBETH LEWICKI, whose post office
address is c/o The Bank of New York, 101 Barclay Street, New York, New York
10286, who hereby is appointed successor Co-Trustee to Douglas J. MacInnes
(successor to Arthur E. Burke, Karl R. Henrich, H.H. Gould, R. Amundsen, P.J.
Crowley and W.T. Cunningham) (said MaryBeth Lewicki being hereinafter sometimes
called the "Co-Trustee", and the Corporate Trustee and the Co-Trustee being
hereinafter together sometimes called the "Trustees"), as Trustees under the
Mortgage and Deed of Trust, dated as of October 1, 1945 (hereinafter called the
"Mortgage" and, together with any indentures supplemental thereto, the
"Indenture"), which Mortgage was executed and delivered by The Montana Power
Company, a corporation of the State of New Jersey (hereinafter called the
"Company-New Jersey"), as indirect predecessor under the Mortgage to the Company
(the Company being successor under the Mortgage to NorthWestern Energy, L.L.C.
(hereinafter called "NorthWestern Energy"), formerly known as The Montana Power,
L.L.C., a limited liability company of the State of Montana, and NorthWestern
Energy being the successor under the Mortgage to The Montana Power Company, a
corporation of the State of Montana (hereinafter called the "Company-Montana")),
to Guaranty Trust Company of New York and Arthur E. Burke, as Trustees, to
secure the payment of bonds issued or to be issued under and in accordance with
the provisions of the Mortgage, reference to which Mortgage is hereby made, this
instrument (hereinafter called the "Twenty-third Supplemental Indenture") being
supplemental thereto;
WHEREAS, by the Mortgage, the Company-New Jersey covenanted
that it would execute and deliver such supplemental indenture or indentures and
such further instruments and do such further acts as might be necessary or
proper to carry out more effectually the purposes of the Indenture and to make
subject to the lien of the Indenture any property thereafter acquired, made or
constructed and intended to be subject to the lien thereof; and
WHEREAS, the Company-New Jersey executed and delivered to the
Trustees its First Supplemental Indenture, dated as of May 1, 1954 (hereinafter
called the "First Supplemental Indenture"), and its Second Supplemental
Indenture, dated as of April 1, 1959 (hereinafter called the "Second
Supplemental Indenture"); and
WHEREAS, the Company-New Jersey was merged into the
Company-Montana on November 30, 1961, and to evidence the succession of the
Company-Montana to the Company-New Jersey for purposes of the bonds and the
Indenture and the assumption by the Company-Montana of the covenants and
conditions of the Company-New Jersey in the bonds and in the Indenture contained
and to enable the Company-Montana to have and exercise the powers and rights of
the Company-New Jersey under the Indenture in accordance with the terms thereof,
the Company-Montana executed and delivered to the Trustees its Third
Supplemental Indenture, dated as of November 30, 1961 (hereinafter called the
"Third Supplemental Indenture"); and
WHEREAS, the Company-Montana executed and delivered to the
Trustees its Fourth Supplemental Indenture, dated as of April 1, 1970
(hereinafter called the "Fourth Supplemental Indenture"); its Fifth Supplemental
Indenture, dated as of April 1, 1971 (hereinafter called the "Fifth Supplemental
Indenture"); its Sixth Supplemental Indenture, dated as of March 1, 1974
(hereinafter called the "Sixth Supplemental Indenture"); its Seventh
Supplemental Indenture, dated as of December 1, 1974 (hereinafter called the
"Seventh Supplemental Indenture"); its Eighth Supplemental Indenture, dated as
of July 1, 1975 (hereinafter called the "Eighth Supplemental Indenture"); its
Ninth Supplemental Indenture, dated as of December 1, 1975 (hereinafter called
the "Ninth Supplemental Indenture"); its Tenth Supplemental Indenture, dated as
of January 1, 1979 (hereinafter called the "Tenth Supplemental Indenture"); its
Eleventh Supplemental Indenture, dated as of October 1, 1983 (hereinafter called
the "Eleventh Supplemental Indenture"); its Twelfth Supplemental Indenture,
dated as of January 1, 1984 (hereinafter called the "Twelfth Supplemental
Indenture"); its Thirteenth Supplemental Indenture, dated as of December 1, 1991
(hereinafter called the "Thirteenth Supplemental Indenture"); its Fourteenth
Supplemental Indenture, dated as of January 1, 1993 (hereinafter called the
"Fourteenth Supplemental Indenture"); its Fifteenth Supplemental Indenture,
dated as of March 1, 1993 (hereinafter called the "Fifteenth Supplemental
Indenture"); its Sixteenth Supplemental Indenture, dated as of May 1, 1993
(hereinafter called the "Sixteenth Supplemental Indenture"); its Seventeenth
Supplemental Indenture, dated as of December 1, 1993 (hereinafter called the
"Seventeenth Supplemental Indenture"); its Eighteenth Supplemental Indenture,
dated as of August 5, 1994 (hereinafter called the "Eighteenth Supplemental
Indenture"); its Nineteenth Supplemental Indenture, dated as of December 16,
1999 (hereinafter called the "Nineteenth Supplemental Indenture"); and its
Twentieth Supplemental Indenture, dated as of November 1, 2001 (hereinafter
called the "Twentieth Supplemental Indenture"); and
WHEREAS, the Company-Montana was merged into NorthWestern
Energy (under its then name, The Montana Power, L.L.C.) on February 13, 2002,
and to evidence the succession of NorthWestern Energy (under its then name, The
Montana Power, L.L.C.) to the Company-Montana for purposes of the bonds and the
Indenture and the assumption by NorthWestern Energy (under its then name, The
Montana Power, L.L.C.) of the covenants and conditions of the Company-Montana in
the bonds and in the Indenture contained and to enable NorthWestern Energy
(under its then name, The Montana Power, L.L.C.) to have and exercise the powers
and rights of the Company-Montana under the Indenture in accordance
2
with the terms thereof, NorthWestern Energy (under its then name, The Montana
Power, L.L.C.) executed and delivered to the Trustees its Twenty-First
Supplemental Indenture, dated as of February 13, 2002 (hereinafter called the
"Twenty-first Supplemental Indenture"); and
WHEREAS, NorthWestern Energy changed its name from The Montana
Power, L.L.C. to NorthWestern Energy, L.L.C. on March 19, 2002; and
WHEREAS, NorthWestern Energy transferred, subject to the Lien
of the Indenture, substantially all of the Mortgaged and Pledged Property as an
entirety to the Company on November 20, 2002 (the "Transfer Date"), and to
evidence the succession of the Company to NorthWestern Energy for purposes of
the bonds and the Indenture and the assumption by the Company of the covenants
and conditions of NorthWestern Energy in the bonds and in the Indenture
contained and to enable the Company to have and exercise the powers and rights
of NorthWestern Energy under the Indenture in accordance with the terms thereof,
the Company executed and delivered to the Trustees its Twenty-second
Supplemental Indenture, dated as of November 15, 2002 (hereinafter called the
"Twenty-second Supplemental Indenture"); and
WHEREAS, the Mortgage and the First, Second, Third, Fourth,
Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteenth,
Fourteenth, Fifteenth, Sixteenth, Seventeenth, Eighteenth, Nineteenth,
Twentieth, Twenty-first and Twenty-second Supplemental Indentures were recorded
in the official records of various counties and states as required by the
Indenture; and
WHEREAS, an instrument dated March 15, 1955 was executed by
the Company-New Jersey appointing Karl R. Henrich as Co-Trustee in succession to
said Arthur E. Burke, resigned, under the Mortgage and by Karl R. Henrich
accepting the appointment as Co-Trustee under the Mortgage in succession to said
Arthur E. Burke, which instrument was recorded in various counties in the states
of Montana, Idaho and Wyoming; and
WHEREAS, an instrument dated June 29, 1962 was executed by the
Company-Montana appointing H.H. Gould as Co-Trustee in succession to said Karl
R. Henrich, resigned, under the Mortgage and by H.H. Gould accepting the
appointment as Co-Trustee under the Mortgage in succession to said Karl R.
Henrich, which instrument was recorded in various counties in the states of
Montana, Idaho and Wyoming; and
WHEREAS, an instrument dated June 22, 1973 was executed by the
Company-Montana appointing R. Amundsen as Co-Trustee in succession to said H.H.
Gould, resigned, under the Mortgage and by R. Amundsen accepting the appointment
as Co-Trustee under the Mortgage in succession to said H.H. Gould, which
instrument was recorded in various counties in the states of Montana, Idaho and
Wyoming; and
WHEREAS, an instrument dated July 1, 1986 was executed by the
Company-Montana appointing P.J. Crowley as Co-Trustee in succession to said R.
Amundsen, resigned, under the Mortgage and by P.J Crowley accepting the
appointment as Co-Trustee
3
under the Mortgage in succession to said R. Amundsen, which instrument was
recorded in various counties in the states of Montana, Idaho and Wyoming; and
WHEREAS, by the Eighteenth Supplemental Indenture, the
Company-Montana appointed (i) W.T. Cunningham as Co-Trustee in succession to
said P.J. Crowley, resigned, under the Mortgage and W.T. Cunningham accepted the
appointment as Co-Trustee under the Mortgage in succession to said P.J. Crowley,
and (ii) The Bank of New York as Corporate Trustee in succession to Morgan
Guaranty Trust Company of New York, resigned, under the Mortgage and The Bank of
New York accepted the appointment as Corporate Trustee under the Mortgage in
succession to said Morgan Guaranty Trust Company of New York, which supplemental
indenture was recorded in various counties in the states of Montana, Idaho and
Wyoming; and
WHEREAS, an instrument dated March 29, 1999 was executed by
the Company-Montana appointing Douglas J. MacInnes as Co-Trustee in succession
to said W.T. Cunningham, resigned, under the Mortgage and by Douglas J. MacInnes
accepting the appointment as Co-Trustee under the Mortgage in succession to said
W.T. Cunningham, which instrument was recorded in various counties in the states
of Montana, Idaho and Wyoming; and
WHEREAS, as permitted by Section 101 and Section 102 of the
Mortgage (as heretofore supplemented), and there being no Default and no
occurrence of an event which, after notice, the passage of time, or both, would
constitute a Default, the Company desires to remove Douglas J. MacInnes as
Co-Trustee under the Mortgage and to appoint MaryBeth Lewicki as successor
Co-Trustee under the Mortgage, subject to the conditions of Article XVII of the
Mortgage, effective as of the close of business on February 7, 2003, and said
MaryBeth Lewicki desires to accept such appointment, effective as of the close
of business on February 7, 2003, in each case, pursuant to this Twenty-third
Supplemental Indenture;
WHEREAS, the Company-New Jersey or the Company-Montana has
heretofore issued, in accordance with the provisions of the Mortgage, the
following series of First Mortgage Bonds:
Principal
Amount Principal Amount
Series Issued Outstanding
------ ------ -----------
2-7/8% Series due 1975 ................................... $40,000,000 NONE
3-1/8% Series due 1984 ................................... 6,000,000 NONE
4-1/2% Series due 1989 ................................... 15,000,000 NONE
8-1/4% Series due 1974 ................................... 30,000,000 NONE
7-1/2% Series due 2001 (Fifth)............................ 25,000,000 NONE
8-5/8% Series due 2004.................................... 60,000,000 NONE
8-3/4% Series due 1981.................................... 30,000,000 NONE
9.60% Series due 2005..................................... 35,000,000 NONE
9.70% Series due 2005..................................... 65,000,000 NONE
4
Principal
Amount Principal Amount
Series Issued Outstanding
------ ------ -----------
9-7/8% Series due 2009.................................... 50,000,000 NONE
11-3/4% Series due 1993................................... 75,000,000 NONE
10/10-1/8% Series due 2004/2014........................... 80,000,000 NONE
8-1/8% Series due 2014.................................... 41,200,000 NONE
7.70% Series due 1999 (Fourteenth)........................ 55,000,000 NONE
8-1/4% Series due 2007 (Fifteenth)........................ 55,000,000 $365,000
8.95% Series 2022 (Sixteenth)............................. 50,000,000 1,466,000
Secured Medium-Term Notes (Seventeenth)................... 68,000,000 13,000,000
7% Series due 2005 (Eighteenth)........................... 50,000,000 5,386,000
6-1/8% Series due 2023 (Nineteenth)....................... 90,205,000 90,205,000
5.90% Series due 2023 (Twentieth)......................... 80,000,000 80,000,000
0% Series due 1999 (Twenty-first)......................... 210,321,007 NONE
7.30% Series due 2006 (Twenty-second)..................... 150,000,000 150,000,000
which bonds are also hereinafter sometimes called "Bonds of the First through
Twenty-second Series", respectively; and
WHEREAS, Section 8 of the Mortgage provides that the form of
each series of bonds (other than the First Series) issued thereunder and of the
coupons to be attached to coupon bonds of such series shall be established by
Resolution of the Board of Directors of the Company and that the form of such
series, as established by said Board of Directors, shall specify the descriptive
title of the bonds and various other terms thereof, and may also contain such
provisions not inconsistent with the provisions of the Indenture as the Board of
Directors may, in its discretion, cause to be inserted therein expressing or
referring to the terms and conditions upon which such bonds are to be issued
and/or secured under the Indenture; and
WHEREAS, Section 120 of the Mortgage provides, among other
things, that any power, privilege or right expressly or impliedly reserved to or
in any way conferred upon the Company by any provision of the Indenture, whether
such power, privilege or right is in any way restricted or is unrestricted, may
be in whole or in part waived or surrendered or subjected to any restriction if
at the time unrestricted or to additional restriction if already restricted, and
the Company may enter into any further covenants, limitations or restrictions
for the benefit of any one or more series of bonds issued thereunder, or the
Company may cure any ambiguity contained therein or in any supplemental
indenture or may (in lieu of establishment by Resolution as provided in Section
8 of the Mortgage) establish the terms and provisions of any series of bonds
other than the First Series, by an instrument in writing executed and
acknowledged by the Company in such manner as would be necessary to entitle a
conveyance of real estate to record in all of the states in which any property
at the time subject to the lien of the Indenture shall be situated; and
WHEREAS, the Company now desires to create a new series of
bonds and (pursuant to the provisions of Section 120 of the Mortgage) to add to
its covenants and agreements contained in the Mortgage certain other covenants
and agreements to be observed by it and to alter and amend in certain respects
the covenants and provisions contained in the Indenture; and
5
WHEREAS, the execution and delivery by the Company of this
Twenty-third Supplemental Indenture, and the terms of the Bonds of the
Twenty-third Series, hereinafter referred to, have been duly authorized by the
Board of Directors of the Company by appropriate Resolutions of said Board of
Directors.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Company, pursuant to Section 101 of the Mortgage (as
heretofore supplemented), and by order of its Board of Directors, hereby removes
Douglas J. MacInnes as Co-Trustee under the Mortgage (and will furnish to said
Douglas J. MacInnes a manually signed original of this Supplemental Indenture as
an instrument of such removal) effective as of the close of business on February
7, 2003;
That, pursuant to Section 102 of the Mortgage (as heretofore
supplemented), and by order of its Board of Directors, the Company hereby
appoints MaryBeth Lewicki as successor Co-Trustee under the Mortgage, subject to
the conditions of Article XVII thereof, effective as of the close of business on
February 7, 2003;
That the undersigned MaryBeth Lewicki, a citizen of the United
States of America, hereby accepts her appointment by the Company as successor
Co-Trustee under the Mortgage (and, pursuant to Section 104 of the Mortgage,
will furnish to said Douglas J. MacInnes and the Company a manually signed
original of this Supplemental Indenture as an instrument of such acceptance)
effective as of the close of business on February 7, 2003;
That the Company will proceed with the publication of the
notice of the aforesaid removal and the notice of the aforesaid appointment, as
required, respectively, by Section 101 and Section 102 of the Mortgage (as
heretofore supplemented), in substantially the forms provided, respectively, in
Exhibit A-1 and Exhibit A-2 attached hereto;
That the Company, in consideration of the premises and of
$1.00 to it duly paid by the Trustees at or before the ensealing and delivery of
these presents, the receipt whereof is hereby acknowledged, and in further
evidence of assurance of the estate, title and rights of the Trustees and in
order further to secure the payment of both the principal of and interest and
premium, if any, on the bonds from time to time issued under the Indenture,
according to their tenor and effect and the performance of all the provisions of
the Indenture (including any modification made as in the Mortgage provided) and
of said bonds, and to confirm the lien of the Mortgage, as heretofore
supplemented, on certain after-acquired property, hereby grants, bargains,
sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and
confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of
the Mortgage, as heretofore supplemented) unto Douglas J. MacInnes, who is being
removed as Co-Trustee effective as of the close of business on February 7, 2003,
and to MaryBeth Lewicki, who is being appointed as Co-Trustee and accepting such
appointment as Co-Trustee effective as of the close of business on February 7,
2003, and (to the extent of its legal capacity to hold the same for the purposes
hereof) to The Bank of New York, the Corporate Trustee, as Trustees under the
Indenture, and to their successor or successors in said trust, and to said
Trustees and their successors and assigns forever, all property, real,
6
personal and mixed, of the kind or nature specifically mentioned in the
Mortgage, as heretofore supplemented, or of any other kind or nature (whether or
not located in the State of Montana), acquired by the Company after the date of
the execution and delivery of the Mortgage, as heretofore supplemented (except
any herein or in the Mortgage, as heretofore supplemented, expressly excepted),
now owned or, subject to the provisions of subsection (I) of Section 87 of the
Mortgage, as heretofore supplemented, hereafter acquired by the Company (by
purchase, consolidation, merger, donation, construction, erection or in any
other way) and wheresoever situated, including (without in anywise limiting or
impairing by the enumeration of the same the scope and intent of the foregoing,
or of any general description contained in the Indenture) all lands, power
sites, flowage rights, water rights, water locations, water appropriations,
ditches, flumes, reservoirs, reservoir sites, canals, raceways, dams, dam sites,
aqueducts and all other rights or means for appropriating, conveying, storing
and supplying water; all rights of way and roads; all plants for the generation
of electricity by steam, water and/or other power; all powerhouses, gas plants,
street lighting systems, standards and other equipment incidental thereto,
telephone, radio and television systems, air-conditioning systems and equipment
incidental thereto, water works, water systems, steam heat and hot water plants,
substations, lines, service and supply systems, bridges, culverts, tracks, ice
or refrigeration plants and equipment, offices, buildings and other structures
and the equipment thereof, all machinery, engines, boilers, dynamos, electric,
gas and other machines, regulators, meters, transformers, generators, motors,
electrical, gas and mechanical appliances, conduits, cables, water, steam heat,
gas or other pipes, gas mains and pipes, service pipes, fittings, valves and
connections, pole and transmission lines, wires, cables, tools, implements,
apparatus, furniture and chattels; all franchises, consents or permits, all
lines for the transmission and distribution of electric current, gas, steam heat
or water for any purpose including towers, poles, wires, cables, pipes,
conduits, ducts and all apparatus for use in connection therewith; all real
estate, lands, easements, servitudes, licenses, permits, franchises, privileges,
rights of way and other rights in or relating to real estate or the occupancy of
the same and (except as herein or in the Mortgage, as heretofore supplemented,
expressly excepted) all the right, title and interest of the Company in and to
all other property of any kind or nature appertaining to and/or used and/or
occupied and/or enjoyed in connection with any property hereinbefore or in the
Mortgage, as heretofore supplemented, described.
TOGETHER with all and singular the tenements, hereditaments,
prescriptions, servitudes and appurtenances belonging or in anywise appertaining
to the aforesaid property or any part thereof, with the reversion and
reversions, remainder and remainders and (subject to the provisions of Section
57 of the Mortgage) the tolls, rents, revenues, issues, earnings, income,
product and profits thereof, and all the estate, right, title and interest and
claim whatsoever, at law as well as in equity, which the Company now has or may
hereafter acquire in and to the aforesaid property and franchises and every part
and parcel thereof.
IT IS HEREBY AGREED by the Company that, subject to the
provisions of subsection (I) of Section 87 of the Mortgage, as heretofore
supplemented, all the property, rights and franchises acquired by the Company
(by purchase, consolidation, merger,
7
donation, construction, erection or in any other way) after the date hereof,
except any herein or in the Mortgage, as heretofore supplemented, expressly
excepted, shall be and are as fully granted and conveyed hereby and as fully
embraced within the lien hereof and the lien of the Mortgage, as heretofore
supplemented, as if such property, rights and franchises were now owned by the
Company and were specifically described herein and conveyed hereby.
PROVIDED that the following are not and are not intended to be
now or hereafter granted, bargained, sold, released, conveyed, assigned,
transferred, mortgaged, hypothecated, affected, pledged, set over or confirmed
hereunder and are hereby expressly excepted from the lien and operation of the
Mortgage, as supplemented, viz: (1) cash, shares of stock, bonds, notes and
other obligations and other securities not specifically pledged, paid,
deposited, delivered or held under the Mortgage, as supplemented, or covenanted
so to be; (2) merchandise, equipment, apparatus, materials or supplies held for
the purpose of sale or other disposition in the usual course of business; fuel,
oil and similar materials and supplies consumable in the operation of any of the
properties of the Company; all aircraft, tractors, rolling stock, trolley
coaches, buses, motor coaches, automobiles, motor trucks, and other vehicles and
materials and supplies held for the purpose of repairing or replacing (in whole
or part) any of the same; (3) bills, notes and accounts receivable, judgments,
demands and choses in action, and all contracts, leases and operating agreements
not specifically pledged under the Mortgage, as supplemented, or covenanted so
to be; the Company's contractual rights or other interest in or with respect to
tires not owned by the Company; (4) the last day of the term of any lease or
leasehold which may be or become subject to the lien of the Mortgage, as
supplemented; (5) electric energy, gas, steam, water, ice, and other materials
or products generated, manufactured, produced, purchased or acquired by the
Company for sale, distribution or use in the ordinary course of its business;
all timber, minerals, mineral rights and royalties and all Gas and Oil
Production Property, as defined in Section 4 of the Mortgage, as supplemented;
(6) the Company's franchise to be a corporation; and (7) any property heretofore
released pursuant to any provisions of the Indenture and not heretofore disposed
of by the Company-New Jersey, the Company-Montana, NorthWestern Energy or the
Company; provided, however, that the property and rights expressly excepted from
the lien and operation of the Mortgage, as supplemented, in the above
subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so
excepted in the event and as of the date that either or both of the Trustees or
a receiver or trustee shall enter upon and take possession of the Mortgaged and
Pledged Property in the manner provided in Article XIII of the Mortgage by
reason of the occurrence of a Default as defined in Section 65 thereof.
TO HAVE AND TO HOLD all such properties, real, personal and
mixed, granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, pledged, set over or confirmed by the Company as aforesaid, or
intended so to be, unto the Co-Trustee and (to the extent of its legal capacity
to hold the same for the purposes hereto) unto the Corporate Trustee, as
Trustees, and their successors and assigns forever.
IN TRUST NEVERTHELESS, for the same purposes and upon the same
terms, trusts and conditions and subject to and with the same provisos and
covenants as are
8
set forth in the Mortgage, as supplemented, this Twenty-third Supplemental
Indenture being supplemental thereto.
AND IT IS HEREBY COVENANTED by the Company that all the terms,
conditions, provisos, covenants and provisions contained in the Mortgage, as
supplemented, shall affect and apply to the property hereinbefore described and
conveyed and to the estate, rights, obligations and duties of the Company and
the Trustees and the beneficiaries of the trust with respect to said property,
and to the Trustees and their successors as Trustees of said property in the
same manner and with the same effect as if the said property had been owned by
the Company-New Jersey at the time of the execution of the Mortgage, and had
been specifically and at length described in and conveyed to the Trustees, by
the Mortgage as a part of the property therein stated to be conveyed.
SUBJECT NEVERTHELESS, to the limitation permitted by
subsection (I) of Section 87 of the Mortgage, as supplemented, namely, that
notwithstanding the foregoing, the Mortgage, as supplemented, shall not become
or be or be required to become or be a lien upon any of the properties or
franchises owned by the Company on the Transfer Date or thereafter acquired by
the Company (by purchase, consolidation, merger, donation, construction,
erection or in any other way) except (a) those acquired by it from NorthWestern
Energy, and improvements, extensions and additions thereto and renewals and
replacements thereof, (b) the property made and used by the Company as the basis
under any of the provisions of the Indenture for the authentication and delivery
of additional bonds or the withdrawal of cash or the release of property or a
credit under Section 39 or Section 40 of the Indenture, and (c) such franchises,
repairs and additional property as may be acquired, made or constructed by the
Company (1) to maintain, renew and preserve the franchises covered by the
Indenture, or (2) to maintain the property mortgaged and intended to be
mortgaged under the Indenture as an operating system or systems in good repair,
working order and condition, or (3) in rebuilding or renewal of property,
subject to the Lien under the Indenture, damaged or destroyed, or (4) in
replacement of or substitution for machinery, apparatus, equipment, frames,
towers, poles, wire, pipe, tools, implements and furniture, subject to the Lien
thereunder, which shall have become old, inadequate, obsolete, worn out, unfit,
unadapted, unserviceable, undesirable or unnecessary for use in the operation of
the property mortgaged and intended to be mortgaged thereunder.
The Company further covenants and agrees to and with the
Trustees and their successors in said trust under the Indenture, as follows:
ARTICLE I
Twenty-third Series of Bonds
Section 1.1 There shall be a series of bonds designated
"Credit Agreement (2002) Series, due 2006" (such series herein sometimes
referred to as the "Twenty-third Series" and the bonds of such series herein
sometimes referred to as the "Bonds of the Twenty-third Series") each of which
shall also bear the descriptive title "First Mortgage Bond", and the form
thereof, which as established by Resolution of the Board of Directors of the
Company,
9
shall be substantially as provided in Exhibit B attached hereto and, thereby,
shall contain suitable provisions with respect to the matters hereinafter in
this Section specified.
Bonds of the Twenty-third Series shall be issued to Credit
Suisse First Boston, acting through its Cayman Islands Branch, as collateral
agent (together with its successors in such capacity, the "Collateral Agent")
under the Bond Collateral Agreement, dated as of February 10, 2003 (as amended
or otherwise modified, or as waived, or as replaced in each case, from time to
time in accordance with its terms, the "Collateral Agreement"), between the
Company and the Collateral Agent, to secure the obligations of the Company to
pay when due the Applicable Share (as hereinafter defined) of the principal of
and interest on the loans (the "Loans") made and outstanding under the Credit
Agreement, dated as of December 17, 2002 (as amended or otherwise modified, or
as waived, or as replaced, in each case, from time to time in accordance with
its terms, the "Credit Agreement"), among the Company, as borrower, the several
lenders from time to time parties thereto (the "Lenders") and Credit Suisse
First Boston, acting through its Cayman Islands Branch, as administrative agent
(together with its successors in such capacity, the "Administrative Agent").
As used herein, "Applicable Share" means, as of any day, a
fraction (expressed as a percentage rounded to the eighth decimal place), (i)
the numerator of which is the aggregate principal amount of the Bonds of the
Twenty-third Series that are Outstanding on such day, and (ii) the denominator
of which is the sum of (a) the aggregate principal amount of the Bonds of the
Twenty-third Series that are Outstanding on such day, plus (b) the aggregate
principal amount of the New Mortgage Bonds, Credit Agreement (2002) Series, due
2006, of the Company (the "South Dakota Credit Agreement Bonds") that are
outstanding on such day under the Company's Mortgage Indenture and Deed of
Trust, dated as of August 1, 1993, relating (among other things) to property
owned by the Company in the States of South Dakota, Nebraska, Iowa and North
Dakota (as amended and supplemented, the "South Dakota Mortgage"). Initially,
the Applicable Share will be 71.79487179% (being the expression as a percentage
(rounded to the eighth decimal place) of a fraction, the numerator of which is
$280,000,000 (the aggregate principal amount of the Bonds of the Twenty-third
Series that are to be issued and become Outstanding) and the denominator of
which is $390,000,000 (the sum of $280,000,000, the aggregate principal amount
of the Bonds of the Twenty-third Series that are to be issued and become
Outstanding, plus $110,000,000, the aggregate principal amount of the South
Dakota Credit Agreement Bonds that are to be issued and become outstanding under
the South Dakota Mortgage simultaneously with the issuance of the Bonds of the
Twenty-third Series). Pursuant to the Collateral Agreement, the Collateral Agent
will furnish to the Corporate Trustee (with a copy to the Company) as soon as
practicable after any change in the Applicable Share, a certificate, signed by a
person purporting to be its duly authorized officer, notifying the Corporate
Trustee of such change in the Applicable Share (an "Applicable Share
Certificate"). Each Applicable Share Certificate shall set forth (i) the changed
Applicable Share, (ii) the date such change occurred, (iii) the aggregate
principal amount of the Bonds of the Twenty-third Series then Outstanding, and
(iv) the aggregate principal amount of the South Dakota Credit Agreement Bonds
then outstanding under the South Dakota Mortgage. The Corporate Trustee may
conclusively presume that the Applicable Share is
10
71.79487179% unless and until the Corporate Trustee receives an Applicable Share
Certificate. Following receipt by the Corporate Trustee of an Applicable Share
Certificate, the Corporate Trustee may conclusively presume that the Applicable
Share is as set forth in such Applicable Share Certificate unless and until the
Corporate Trustee receives a subsequent Applicable Share Certificate (and the
Corporate Trustee shall be fully protected in relying thereon).
Bonds of the Twenty-third Series shall mature on December 1,
2006 (the "Maturity Date"), with an installment of the principal of the Bonds of
the Twenty-third Series in an amount equal to $700,000 (said amount representing
one quarter of one percent (0.25%) of the original aggregate principal amount of
the Bonds of the Twenty-third Series) being payable on the last Business Day (as
hereinafter defined) of each March, June, September and December occurring prior
to the Maturity Date, commencing March 31, 2003, and the balance of the
principal of the Bonds of the Twenty-third Series being payable on the Maturity
Date (in each case, unless an equal installment or balance of principal of the
Loans is not due and payable on such Business Day or on the Maturity Date, as
applicable, in accordance with the Credit Agreement by reason of prior
prepayment of the Loans (in which event, there shall be due and payable on the
Bonds of the Twenty-third Series on such Business Day or on the Maturity Date,
as applicable, an amount of principal of said Bonds equal to the Applicable
Share of the amount of principal of the Loans that is payable on such Business
Day or on the Maturity Date, as applicable, in accordance with the Credit
Agreement)); they shall be issued as fully registered bonds in denominations of
One Thousand Dollars or in any integral multiple of One Dollar in Excess of One
Thousand Dollars; the unpaid principal amount of the Bonds of the Twenty-third
Series shall bear interest at one or more variable interest rates per annum
which rate or rates for each day shall be equal to the rate or rates per annum
borne by the Loans in accordance with the Credit Agreement for such day
(calculated in the manner provided in the Credit Agreement for the calculation
of interest on the Loans), payable on each day on which interest is payable on
the Loans in accordance with the Credit Agreement (and in an amount equal to the
Applicable Share of the amount of interest that is payable on the Loans on such
day in accordance with the Credit Agreement) to the Collateral Agent, as the
registered owner, without regard to, or necessity for, any record date; the
principal of and interest on each said Bond to be payable at the office or
agency of the Company in the Borough of Manhattan, The City of New York, in such
coin or currency of the United States of America as at the time of payment is
legal tender for public and private debts. Bonds of the Twenty-third Series
shall be dated as in Section 10 of the Mortgage provided. As used herein,
"Business Day" means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close.
For the avoidance of any doubt, it is expressly stated that
scheduled amortization payments with respect to the Bonds of the Twenty-third
Series (as specified for the Bonds of the Twenty-third Series prior to the
Maturity Date pursuant to the preceding paragraph of this Section 1.1) shall not
constitute a redemption in part of the Bonds of the Twenty-third Series for
purposes of Section 53 of the Mortgage (as supplemented) (and, therefore,
surrender of the Bonds of the Twenty-third Series shall not be a condition to
the
11
receipt by the registered owners of the Bonds of the Twenty-third Series of such
scheduled amortization payments).
At the option of the registered owner, any Bonds of the
Twenty-third Series, upon surrender thereof for cancellation at the office or
agency of the Company in the Borough of Manhattan, The City of New York, shall
be exchangeable for a like aggregate principal amount of bonds of the same
series of other authorized denominations.
Bonds of the Twenty-third Series shall not be transferable
except to any successor Collateral Agent under the Collateral Agreement;
provided, however, that, subject to compliance with the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
(i) on or after the day on which the Loans are accelerated in accordance with
the Credit Agreement (the "Acceleration Day"), all (but not less than all) of
the Bonds of the Twenty-third Series shall be transferable by the Collateral
Agent (together with all (but not less than all) of the South Dakota Credit
Agreement Bonds) to or upon the order of the Lenders in full satisfaction and
discharge of the Loans and the Obligations (as defined in the Collateral
Agreement) pursuant to Section 4.1 of the Collateral Agreement, and (ii)
following such transfer by the Collateral Agent, Bonds of the Twenty-third
Series shall be transferable (without restriction (except as hereinafter in the
following two paragraphs described)) by the registered owners thereof.
As a condition precedent to any transfer of the Bonds of the
Twenty-third Series by the Collateral Agent, the Collateral Agent shall submit
to the Company, the Corporate Trustee and, if applicable, any bond registrar or
transfer agent for the Bonds of the Twenty-third Series (in addition to all
other documents and instruments required to be submitted pursuant to the
Mortgage) a certificate of the Collateral Agent, signed by a person purporting
to be its duly authorized officer, certifying that the transferee in such
transfer is a successor Collateral Agent under the Collateral Agreement or that
the transferees in such transfer are the Lenders or persons or entities
specified by the Lenders to which on or after the Acceleration Day all (but not
less than all) of the Bonds of the Twenty-third Series and all (but not less
than all) of the South Dakota Credit Agreement Bonds are being transferred in
full satisfaction and discharge of the Loans and the Obligations (as defined in
the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement
(and the Corporate Trustee may conclusively presume the statements in any such
certificate of the Collateral Agent to be correct and shall be fully protected
in relying thereon). As a condition precedent to any transfer of any Bond of the
Twenty-third Series to a transferee other than a successor Collateral Agent, the
transferor in such transfer shall deliver to the Company, the Corporate Trustee
and, if applicable, any bond registrar or transfer agent for the Bonds of the
Twenty-third Series (in addition to all other documents and instruments required
to be submitted pursuant to the Mortgage), (i) an opinion of counsel reasonably
satisfactory to the Company, the Corporate Trustee and, if applicable, any bond
registrar or transfer agent for the Bonds of the Twenty-third Series, or (ii) a
certificate of the transferor in such transfer, signed by a person purporting to
be its duly authorized officer, reasonably satisfactory to the Company, the
Corporate Trustee and, if applicable, the bond registrar or transfer agent for
the Bonds of the Twenty-third Series, in either case, to the effect that such
transfer is either (A) covered by an effective registration statement of the
Company under the Securities Act
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(setting forth the registration number and the date of effectiveness of such
registration statement), or (B) exempt from registration under the Securities
Act (setting forth the applicable exemption from registration being relied upon
and the reason such exemption is applicable to such transfer).
Any transfer of Bonds of the Twenty-third Series (i) shall be
subject to the provisions of Section 12 of the Mortgage, except that the
provisions of the last two sentences of such Section 12 shall not be applicable
to any transfer of Bonds of the Twenty-third Series which occurs on or prior to
the Remedy Exercise Day (as hereinafter defined) (and the Company hereby waives
the provisions of such sentences with respect to any such transfer), and (ii)
shall be made at the office or agency of the Company in the Borough of
Manhattan, The City of New York.
The Company hereby waives any right to make any charge for any
exchange or transfer of Bonds of the Twenty-third Series by the Collateral Agent
or any person or entity that is a direct transferee of the Collateral Agent (but
not by any other transferee of Bonds of the Twenty-third Series), whether to
reimburse itself for any tax or taxes or other governmental charge or otherwise
(it being understood that the Company shall pay any tax or taxes or governmental
or other charge which may be payable by reason of any exchange or transfer of
Bonds of the Twenty-third Series by the Collateral Agent or any person or entity
that is a direct transferee of the Collateral Agent). However, the Company
reserves the right to require payment of a sum sufficient to cover any tax or
taxes or governmental or other charge that may be imposed in connection with any
transfer or exchange of Bonds of the Twenty-third Series by any registered owner
other than the Collateral Agent or any person or entity that is a direct
transferee of the Collateral Agent, other than any exchange pursuant to Section
15, 54 or 115 of the Indenture not involving any transfer.
The Company has appointed The Bank of New York as its agent to
receive Bonds of the Twenty-third Series presented or surrendered for payment,
to receive Bonds of the Twenty-third Series surrendered for registration of
transfer or exchange and to receive notices and demands to or upon the Company
in respect of the Bonds of the Twenty-third Series and the Indenture; and the
corporate trust office of The Bank of New York in the Borough of Manhattan, The
City of New York shall be the office or agency of the Company in the Borough of
Manhattan, The City of New York at which such presentations, surrenders, notices
and demands may be made or served.
Upon the delivery of this Twenty-third Supplemental Indenture,
Bonds of the Twenty-third Series in the aggregate principal amount of
$280,000,000 are to be issued forthwith and will be Outstanding in addition to
the bonds hereinbefore stated to be Outstanding.
Bonds of the Twenty-third Series shall be subject to the
following redemption and other terms and conditions:
(I) Bonds of the Twenty-third Series shall be subject to
redemption as follows (but shall not otherwise be or become subject to
redemption, whether at the option of
13
the holders thereof or the Company or pursuant to any other requirements or
provisions of the Indenture): (A) on each day on which the Loans are subject to
prepayment in accordance with the Credit Agreement, Bonds of the Twenty-third
Series shall be subject to redemption in an aggregate principal amount equal to
the Applicable Share of the aggregate principal amount of the Loans that are so
subject to prepayment on such day; and (B) on the Acceleration Day, the entire
aggregate principal amount of the Bonds of the Twenty-third Series shall be
subject to redemption (the "Acceleration Redemption"); in each case, without any
necessity for notice or call by the Company or by the Corporate Trustee (such
notice and call being waived by the registered owners of the Bonds of the
Twenty-third Series by the acceptance of the Bonds of the Twenty-third Series
and in connection with each Redemption Demand hereinafter described). Redemption
of Bonds of the Twenty-third Series shall be at a redemption price equal to the
principal amount of such Bonds of the Twenty-third Series (without premium),
together with interest accrued on said principal to and including the date of
redemption (collectively, a "Redemption Amount"). In the event of any failure by
the Company to pay when due the Redemption Amount with respect to any redemption
of Bonds of the Twenty-third Series, interest shall accrue on such unpaid
Redemption Amount at the rates (and in amounts equal to the Applicable Share of
the amounts) of interest that accrue on the corresponding unpaid principal of
and interest on the Loans in accordance with the Credit Agreement.
The Corporate Trustee may conclusively presume that no
redemption of Bonds of the Twenty-third Series is required pursuant to this
subdivision (I) unless and until it shall have received a written notice from
the Administrative Agent, signed by a person purporting to be its duly
authorized officer, stating that the Loans are subject to prepayment or have
been accelerated, in either case, in accordance with the Credit Agreement (a
"Redemption Demand"). Each Redemption Demand also shall state the date on which
the Loans are subject to prepayment or acceleration in accordance with the
Credit Agreement, the principal amount of the Loans subject to such prepayment
or acceleration on such date, the principal amount of Bonds of the Twenty-third
Series to be redeemed on such date in accordance with this Twenty-third
Supplemental Indenture by reason of such prepayment or acceleration, and the
Redemption Amount payable with respect to such Bonds of the Twenty-third Series
(determined in accordance with this Twenty-third Supplemental Indenture) and
setting forth the amounts of the respective portions thereof representing
principal of and interest on such Bonds of the Twenty-third Series. Each
Redemption Demand shall be accompanied by a written waiver by the Collateral
Agent, as registered owner of all Bonds of the Twenty-third Series then
Outstanding, of notice of redemption and call for redemption by the Company or
the Corporate Trustee of the Bonds of the Twenty-third Series subject to
redemption as described in such Redemption Demand. The Corporate Trustee may
conclusively presume the statements contained in each Redemption Demand to be
correct (and the Corporate Trustee shall be fully protected in relying thereon).
(II) For the avoidance of any doubt (in the case of the
following clauses (i) and (ii)) and notwithstanding anything herein or in any
Bond of the Twenty-third Series to the contrary other than the provisions of
subdivision (IV) below (in the case of the following clause (iii)): (i) prior to
the Remedy Exercise Day (as hereinafter defined), each payment of
14
principal of or interest on the Bonds of the Twenty-third Series that becomes
due and payable on any day in accordance with this Twenty-third Supplemental
Indenture (whether by reason of stated due date, acceleration, redemption or
otherwise) shall correspond to, and be equal to the Applicable Share of, a
payment of principal of or interest on the Loans that becomes due and payable on
such day in accordance with the Credit Agreement; (ii) on the Acceleration Day,
the Redemption Amount with respect to the Acceleration Redemption shall be due
and payable; and (iii) on and after the Remedy Exercise Day (as hereinafter
defined), (a) the Redemption Amount with respect to the Acceleration Redemption
shall bear interest (to the extent permitted by law in the case of interest on
the portion of the Redemption Amount representing interest on the applicable
Bonds) at a variable rate per annum which rate for each day shall be equal to
the Prime-Based Rate (as hereinafter defined and as calculated by the Corporate
Trustee) for such day plus 6.75%, payable to the registered owners of the Bonds
of the Twenty-third Series in the manner provided in the Mortgage for the
payment of defaulted interest (including, without limitation, and if applicable,
Section 76 of the Mortgage (as supplemented), and (b) payments of principal of
and interest on the Bonds of the Twenty-third Series shall cease to correspond
to payments of principal of and interest on the Loans (and shall not be
satisfied and discharged by the satisfaction and discharge of the Loans).
As used herein, "Remedy Exercise Day" means the day (on or
after the Acceleration Day) on which all (but not less than all) of the Bonds of
the Twenty-third Series and all (but not less than all) of the South Dakota
Credit Agreement Bonds are transferred by the Collateral Agent to or upon the
order of the Lenders in full satisfaction and discharge of the Loans and the
Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of
the Collateral Agreement (as such transfer is evidenced by the registration in
the names of the transferees in such transfer of certificates evidencing all
(but not less than all) of the Bonds of the Twenty-third Series and all (but not
less than all) of the South Dakota Credit Agreement Bonds). The Corporate
Trustee may conclusively presume that the Remedy Exercise Day has not occurred
unless and until it shall have received a written notice from the Collateral
Agent, signed by a person purporting to be its duly authorized officer, stating
that the Remedy Exercise Day has occurred (the "Remedy Exercise Day Notice").
The Remedy Exercise Day Notice (i) shall set forth the date of the Remedy
Exercise Day, (ii) in the case of any such transfer with respect to which the
Corporate Trustee is not the transfer agent, have attached thereto, as evidence
of the transfer of the Bonds of the Twenty-third Series and the South Dakota
Credit Agreement Bonds that gave rise to the occurrence of the Remedy Exercise
Day, copies of certificates registered in the names of the transferees in such
transfer of all (but not less than all) of the Bonds of the Twenty-third Series
and all (but not less than all) of the South Dakota Credit Agreement Bonds, and
(iii) if the Remedy Exercise Day Notice is received by the Corporate Trustee on
a day other than the Remedy Exercise Day, the Prime Rate (as hereinafter
defined) for each day on and after the Remedy Exercise Day and on and prior to
the Business Day on which the Corporate Trustee received the Remedy Exercise Day
Notice. The Corporate Trustee may conclusively presume the statements in the
Remedy Exercise Day Notice to be correct (and the Corporate Trustee shall be
fully protected in relying thereon).
15
As used herein, "Prime-Based Rate" means, with respect to a
particular day (on or after the Remedy Exercise Day), the higher rate per annum
of: (i) the "Prime Rate" (as hereinafter defined) for such day; and (ii) 4.0%.
As used herein, "Prime Rate" means, with respect to a particular day, the
"Prime-1 Rate" for such day as such rate shall appear on the Business Day next
succeeding such day on the display on Moneyline Telerate, Inc. or any successor
service on page 128 or any page that may replace page 128 on such service;
provided that (a) if such day is not a Business Day, the Prime Rate for such day
shall be such rate for the next preceding Business Day as so appearing on the
next succeeding Business Day, and (b) if no such rate so appears on such next
succeeding Business Day, the Prime Rate for such day shall be the "prime rate"
for such day (or, if such day is not a Business Day, for the next preceding
Business Day) as such rate appears on the next succeeding Business Day in the
Wall Street Journal under the caption "Money Rates" (or if the Wall Street
Journal ceases to be published or of general circulation, such other financial
journal or newspaper of general circulation as is selected by the Corporate
Trustee); provided further that, if no rate so appears on such next succeeding
Business Day in the Wall Street Journal or such other financial journal or
newspaper of general circulation, the Prime Rate for such day shall be the Prime
Rate in effect with respect to the day on which the Prime Rate was last
determinable in accordance with the foregoing provisions of this definition; and
provided further that the Prime Rate for each day on and after the Remedy
Exercise Day and on and prior to the Business Day on which the Corporate Trustee
received the Remedy Exercise Day Notice shall be (i) the rate stated in the
Remedy Exercise Day Notice as the Prime Rate for such day, or (ii) if no such
rate for such day is stated in the Remedy Exercise Day Notice, the Prime Rate
for the Business Day next succeeding the Business Day on which the Corporate
Trustee received the Remedy Exercise Day Notice (as determined in accordance
with the foregoing provisions of this definition).
(III) Prior to the Remedy Exercise Day, the obligation of the
Company to make each payment of principal of or interest on the Bonds of the
Twenty-third Series that becomes due and payable in accordance with this
Twenty-third Supplemental Indenture (i) shall be fully satisfied and discharged
if the corresponding payment of the principal of or interest on the Loans shall
have been fully paid under and in accordance with the Credit Agreement, and (ii)
shall be partially satisfied and discharged if the corresponding payment of the
principal of or interest on the Loans shall have been partially paid under and
in accordance with the Credit Agreement (such partial satisfaction and discharge
with respect to the Bonds of the Twenty-third Series to be in an amount equal to
the Applicable Share of the amount of such partial payment with respect to the
Loans). Prior to the Remedy Exercise Day, the Corporate Trustee may conclusively
presume that the obligation of the Company to make payments with respect to the
principal of and interest on the Bonds of the Twenty-third Series shall have
been fully satisfied and discharged unless and until the Corporate Trustee shall
have received a written notice from the Administrative Agent, signed by a person
purporting to be its duly authorized officer, stating (i) that the Company has
failed to make timely payment in full or in part of an amount of principal of
and/or interest on the Loans which became due and payable in accordance with the
Credit Agreement, (ii) the amount and date of such payment of principal of
and/or interest on the Loans which the Company has failed to make in accordance
with the Credit Agreement, and (iii) the amount of principal of
16
and/or interest on the Bonds of the Twenty-third Series which, in accordance
with this Twenty-third Supplemental Indenture, has not been satisfied and
discharged by reason of such failure of the Company. The Corporate Trustee may
conclusively presume the statements contained in any such notice from the
Administrative Agent to be correct unless and until the Corporate Trustee shall
receive a subsequent and/or modified notice from the Administrative Agent
pursuant to and in accordance with this subdivision III (and the Corporate
Trustee shall be fully protected in relying thereon). Without limitation of the
foregoing, and for the avoidance of any doubt, it is expressly stated that,
prior to the Remedy Exercise Day, the Corporate Trustee shall not be responsible
for (i) the calculation of interest on the Bonds of the Twenty-third Series, or
(ii) the determination of any amount (including, without limitation, any
principal of or interest on the Loans) that is payable or paid under the Credit
Agreement.
(IV) Nothing herein or in any of the Bonds of the Twenty-third
Series (including, without limitation, any reference to the principal payable
with respect to the Bonds of the Twenty-third Series being determined on the
basis of the Applicable Share of the principal payable with respect to the
Loans) shall, or shall be deemed or construed to, (i) increase the aggregate
principal amount of the Bonds of the Twenty-third Series that are Outstanding
from time to time, (ii) cause or permit an amount of principal of the Bonds of
the Twenty-third Series to be or to become due and payable which, when added to
all other principal of such Bonds theretofore paid, exceeds $280,000,000, or
(iii) cause or permit to be or to become due and payable interest on the Bonds
of the Twenty-third Series which is payable on any principal of the Bonds of the
Twenty-third Series that is in excess of the principal of the Bonds of the
Twenty-third Series as restricted pursuant to the preceding clauses (i) and
(ii).
ARTICLE II
Additional Covenant for the Benefit of the
Bonds of the Twenty-third Series
Section 2.1 The Company covenants that so long as any of the
Bonds of the Twenty-third Series shall remain Outstanding, (i) the Company shall
not submit a request to the Corporate Trustee or otherwise apply to the
Corporate Trustee for (a) the authentication and delivery of bonds pursuant to
Article V, VI or VII of the Mortgage (as supplemented), (b) the application of
insurance proceeds pursuant to Section 37 of the Mortgage (as supplemented), (c)
the release of property (including the withdrawal of cash) pursuant to Article
XI of the Mortgage (as supplemented), or (d) the execution and delivery of an
indenture supplemental to such Mortgage (as supplemented) (any such request or
application being referred to as an "Application"), in any case, unless the
Company shall have given to the Administrative Agent, at least the Required
Number of Days (as hereinafter defined) prior to the submission to the Corporate
Trustee of such Application, notice of its intention to apply to the Corporate
Trustee for the taking of such action (an "Administrative Agent Notice"), and
(ii) the Company shall have furnished to the Corporate Trustee, in addition to
the other materials required by the provisions of the Mortgage (as supplemented)
to be furnished to the Corporate Trustee as part of such Application, a copy of
the Administrative
17
Agent Notice with respect to such Application and a certificate of the President
or a Vice President of the Company to the effect that at least the Required
Number of Days has elapsed subsequent to the giving by the Company to the
Administrative Agent of the Administrative Agent Notice with respect to such
Application and prior to the submission to the Corporate Trustee of such
Application (an "Administrative Agent Notice Certificate"). Receipt by the
Corporate Trustee of a copy of the Administrative Agent Notice and the
Administrative Agent Notice Certificate with respect to an Application shall be
conditions to the taking of any action applied for in such Application. The
Corporate Trustee shall have no duty to inquire into, may conclusively presume
the correctness of, and shall be fully protected in relying upon, any
Administrative Agent Notice and any Administrative Agent Notice Certificate. As
used herein, "Required Number of Days" means, with respect to an Application,
three (3) Business Days (as defined in Article I, Section 1.1 of this
Twenty-third Supplemental Indenture) or such shorter period of time to which the
Administrative Agent shall have agreed in writing. For the avoidance of doubt,
it is expressly stated that (i) an Administrative Agent Notice may cover one or
more different Applications and one or more different actions to be taken
pursuant to the same or different provisions of the Mortgage (as supplemented),
and (ii) notwithstanding the number of Applications or actions covered by an
Administrative Agent Notice, such Administrative Agent Notice need be given by
the Company to the Administrative Agent only once (at least the Required Number
of Days prior to the submission to the Corporate Trustee of the first
Application covered by such Administrative Agent Notice).
ARTICLE III
Amendments to Mortgage
Section 3.1 . So long as any of the Bonds of the Twenty-third
Series remain Outstanding, Section 7 of the Mortgage is amended by adding at the
end thereof the following additional paragraphs:
If any bonds Outstanding at the date of a Net Earning
Certificate (except any for the refunding of which the bonds
applied for are to be issued) or any bonds then applied for in
pending applications (including the application in connection
with which such Net Earning Certificate is made) bear or are
to bear interest at a variable rate or variable rates such
that the interest requirements with respect to such bonds for
any twelve (12) month period prior to the stated maturity date
of such bonds are not determinable at the date of such Net
Earning Certificate (any such bonds being referred to as
"Variable Rate Bonds"), then (in lieu of setting forth the
Annual Interest Requirements (as otherwise prescribed by this
Section 7), such Net Earning Certificate shall (A) set forth
(i) the sum of the amounts required by clauses (i) through
(iv) of paragraph (B) of this Section 7 (in the case of such
clauses (i) and (ii), excluding the interest requirements in
respect of the Variable Rate Bonds) (the sum of such amounts
being referred to herein and to be referred to in such Net
Earning Certificate as the "Fixed Rate Interest Amount"), and
(ii) the amount (referred to herein and to be referred to in
such
18
Net Earning Certificate as the "Maximum Permitted Variable
Rate Interest Amount") by which (x) one-half of the Adjusted
Net Earnings of the Company set forth in such Net Earning
Certificate, exceeds (y) the Fixed Rate Interest Amount set
forth in such Net Earning Certificate, and (ii) if such Net
Earning Certificate is accompanied by a certificate of an
independent (as hereinafter defined) investment banking firm,
signed by a managing director or officer thereof, to the
effect that, based upon historical fluctuations in the indices
upon which the variable rate or variable rates borne by the
Variable Rate Bonds are based, and taking into account the
margins to be added to or subtracted from such indices and/or
any other adjustments to be made in determining such variable
rate or variable rates and prevailing and projected conditions
in the markets influencing such indices, such independent (as
hereinafter defined) investment banking firm believes (or is
of the view), as of the date of such certificate, that the
aggregate amount of interest to be payable on all of the
Variable Rate Bonds during any period of twelve (12) months
prior to the stated maturity date last to occur of any of the
Variable Rate Bonds will not exceed the Maximum Permitted
Variable Rate Interest Amount (as calculated by the Company in
such Net Earning Certificate without any responsibility on the
part of such independent (as hereinafter defined) investment
banking firm for the calculation thereof), such Net Earning
Certificate shall be deemed for all purposes of the Mortgage
(including, without limitation, Sections 26, 28 and 29 of the
Mortgage) to show Adjusted Net Earnings of the Company to be
as required by Section 27 of the Mortgage. As used in this
Section 7, "independent" means, with respect to an investment
banking firm that provides a certificate pursuant to this
Section 7, that: (i) such investment banking firm is competent
to provide such certificate (and such investment banking firm
shall be conclusively presumed to be competent to provide such
certificate if such investment banking firm is an investment
banking firm of nationally recognized standing and engages in
interest rate swap transactions in the ordinary course of its
business); (ii) such investment banking firm does not have any
direct or indirect investment in the Company or in any bonds
that, as of the date of such certificate, are Outstanding or
the subject of a pending application for authentication and
delivery under the Mortgage (including, without limitation,
any bonds that are subject of the Net Earning Certificate to
which such certificate relates) or in any affiliate of the
Company (other than de minimus amounts of loans or securities
of the Company or affiliates of the Company held in its or its
affiliates' accounts and any investment in, or ownership of,
additional securities or loans of the Company or affiliates of
the Company resulting from its market making activities in the
ordinary course of its business); (iii) such investment
banking firm is not, and none of its officers or directors is,
an affiliate of the Company; and (iv) such investment banking
firm is not acting as an underwriter with respect to any bonds
that are the subject of the Net Earning Certificate to which
such certificate relates or as an arranger or
19
provider of the loans, extensions of credit or other
securities (if any) for which such bonds are collateral
security.
If the Company is a successor corporation (within the
meaning of Section 86 of this Indenture), the "Adjusted Net
Earnings of the Company" as set forth in each Net Earning
Certificate shall be calculated as described in the last two
sentences of Section 86 of this Indenture.
Section 3.2 So long as any of the Bonds of the Twenty-third
Series remain Outstanding, Section 27 of the Mortgage is amended by adding at
the end thereof the following additional sentence:
As described in the penultimate paragraph of Section 7 hereof,
and subject to the conditions therein specified, a Net Earning
Certificate shall be deemed to show Adjusted Net Earnings of
the Company to be as required by this Section 27 (without any
necessity for such Net Earning Certificate to specify Annual
Interest Requirements).
Section 3.3 So long as any of the Bonds of the Twenty-third
Series are Outstanding, Section 86 of the Mortgage is amended by adding at the
end thereof the following additional sentences:
For the avoidance of any doubt, it is expressly stated that in
the event that a successor corporation (having succeeded to
and having been substituted for the Company in accordance with
this Section 86) shall exercise any right under this Indenture
(whether as to the issuance of additional bonds (including,
without limitation, the Bonds of the Twenty-third Series), the
withdrawal of cash, the release of property, the taking of
credit under Section 39 or Section 40 hereof, or otherwise)
and a Net Earning Certificate shall be required by the terms
of this Indenture in connection therewith, the "Adjusted Net
Earnings of the Company" shall be, and shall be stated in such
Net Earning Certificate to be, the lesser of (A) the amount
(for the applicable period selected in accordance with
paragraph (A) of Section 7 of this Indenture) determined in
accordance with paragraph (A) of Section 7 of this Indenture
(and the other provisions of such Section 7 that are relevant
to such paragraph) on the basis of (i) the items set forth in
clauses (1), (2), (4) and (6) of paragraph (A) of such Section
7 being such portions of such items of such successor
corporation as are reasonably allocated by such successor
corporation to or from the Mortgaged and Pledged Property as a
plant or plants and an operating system or operating systems
(and if, on the date of a Net Earning Certificate, such
successor corporation shall be a party to any other general or
first mortgage indenture and deed of trust relating to
property other than the Mortgaged and Pledged Property and the
lien of such other mortgage indenture and deed of trust shall
not have been discharged, such reasonable allocation shall be
in a manner consistent with the manner of allocation utilized
and/or to be utilized by such successor corporation in
20
making calculations of the "Adjusted Net Earnings of the
Company" (or other comparable term) under and as defined in
such other mortgage indenture and deed of trust), (ii) the
item set forth in clause (8) of paragraph (A) of such Section
7 being calculated without regard to income (net) derived from
any electric and/or gas utility business of the successor
corporation in which the Mortgaged and Pledged Property is not
utilized (but otherwise in accordance with such Section 7),
and (iii) the item set forth in clause (10) of paragraph (A)
of such Section 7 being calculated without regard to
sub-clause (b) of such clause and without regard to the
proviso to such clause (but otherwise in accordance with such
clause), and (B) the amount (for the applicable period
selected in accordance with paragraph (A) of Section 7 of this
Indenture) determined in accordance with paragraph (A) of
Section 7 of this Indenture (and the other provisions of such
Section 7 that are relevant to such paragraph) (without any
allocation or distinction as to the derivation of the items
set forth in any of the clauses of paragraph (A) of such
Section 7, other than allocation or distinction between (i)
the electric and/or gas utility business or businesses in
which such successor corporation is engaged (whether or not
the Mortgaged and Pledged Property is utilized in connection
therewith), and (ii) the other business or businesses in which
such successor corporation is engaged (with such other
business or businesses being given effect under the items set
forth in clauses (8) and (10) of paragraph (A) of such Section
7)). Each such Net Earning Certificate shall contain a
statement of the signers of such Net Earning Certificate that,
in the opinion of such signers, the allocations made in the
calculations of "Adjusted Net Earnings of the Company" as set
forth in such Net Earning Certificate are in accordance with
the requirements of the preceding sentence of this Section 86.
ARTICLE IV
Miscellaneous
Section 4.1 Except as otherwise expressly provided herein, the
terms defined in the Mortgage, as heretofore supplemented, shall, for all
purposes of this Twenty-third Supplemental Indenture, have the meaning specified
in the Mortgage, as heretofore supplemented.
Section 4.2 The Trustees hereby accept the trust herein
declared, provided, created or supplemented and agree to perform the same upon
the terms and conditions herein and in the Mortgage, as heretofore supplemented,
set forth and upon the following terms and conditions.
The Trustees shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this
Twenty-third Supplemental Indenture or for or in respect of
the recitals contained herein, all of which recitals are made
by the Company solely. In general, each and every term and
condition contained in Article XVII of the Mortgage, as
heretofore
21
supplemented, shall apply to and form part of this
Twenty-third Supplemental Indenture with the same force and
effect as if the same were herein set forth in full with such
omissions, variations and insertions, if any, as may be
appropriate to make the same conform to the provisions of this
Twenty-third Supplemental Indenture.
Section 4.3 Whenever in this Twenty-third Supplemental
Indenture any of the parties hereto is named or referred to, this shall, subject
to the provisions of Articles XVI and XVII of the Mortgage, as heretofore
supplemented, be deemed to include the successors and assigns of such party, and
all the covenants and agreements in this Twenty-third Supplemental Indenture
contained by or on behalf of the Company, or by or on behalf of the Trustees
shall, subject as aforesaid, bind and inure to the respective benefits of the
respective successors and assigns of such parties, whether so expressed or not.
Section 4.4 Nothing in this Twenty-third Supplemental
Indenture, expressed or implied, is intended, or shall be construed, to confer
upon, or to give to, any person, firm or corporation, other than the parties
hereto and the holders of the bonds and coupons Outstanding under the Indenture,
any right, remedy or claim under or by reason of this Twenty-third Supplemental
Indenture or any covenant, condition, stipulation, promise or agreement hereof,
and all the covenants, conditions, stipulations, promises and agreements in this
Twenty-third Supplemental Indenture contained by or on behalf of the Company
shall be for the sole and exclusive benefit of the parties hereto, and of the
holders of the bonds and coupons now, or to be, Outstanding under the Indenture.
Section 4.5 This Twenty-third Supplemental Indenture shall be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
[Signature Pages Follow]
22
IN WITNESS WHEREOF, NORTHWESTERN CORPORATION has caused its
name to be hereunto affixed, and this instrument to be signed and sealed by its
President or one of its Vice Presidents, and its seal to be attested by its
Secretary or one of its Assistant Secretaries for and in its behalf, and THE
BANK OF NEW YORK, in token of its acceptance of the trust hereby created, has
caused its corporate name to be hereunto affixed, and this instrument to be
signed and sealed by one of its Vice Presidents or one of its Assistant Vice
Presidents, and its corporate seal to be attested by one of its Assistant Vice
Presidents, Assistant Secretaries or Assistant Treasurers, and MARYBETH LEWICKI,
for all like purposes, has hereunto set her hand and affixed her seal, as of the
day and year first above written.
NORTHWESTERN CORPORATION
By: /s/ Eric R. Jacobsen
---------------------------------
Name: Eric R. Jacobsen
Title: Senior Vice President, General Counsel,
Chief Legal Officer and Assistant
Corporate Secretary
[SEAL]
Attest:
/s/ Alan D. Dietrich
- -----------------------------
Name: Alan D. Dietrich
Title: Corporate Secretary
Executed, sealed and delivered by
NORTHWESTERN CORPORATION
in the presence of:
/s/ Karen L. Smook
- -----------------------------
/s/ Corinne Bohrer
- -----------------------------
STATE OF SOUTH DAKOTA)
: ss.
COUNTY OF MINNEHAHA )
This instrument was acknowledged before me on this 10th day of
February, 2003, by Eric R. Jacobsen, Senior Vice President, General
Counsel, Chief Legal Officer and Assistant Corporate Secretary, of
NORTHWESTERN CORPORATION, a Delaware corporation.
/s/ Karen L. Smook
--------------------------------------------
Print Name: Karen L. Smook
Notary Public for the State of South Dakota
Residing at Brandon, South Dakota
My Commission expires 7-12-2005
[SEAL]
THE BANK OF NEW YORK,
as Corporate Trustee
By: /s/ Barbara A. Bevelaqua
----------------------------
Name: Barbara A. Bevelaqua
Title: Vice President
[SEAL]
Attest:
/s/ Stacey B. Poindexter
- ------------------------------------
Name: Stacey B. Poindexter
Title: Assistant Treasurer
/s/ MaryBeth Lewicki
---------------------------------
MARYBETH LEWICKI, as Co-Trustee
Executed, sealed and delivered by
THE BANK OF NEW YORK and
MARYBETH LEWICKI in the presence of:
/s/ Jeremy Finkelstein
- -----------------------------
/s/ Regina F. Johnson
- -----------------------------
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
This instrument was acknowledged before me on this 10th day of
February, 2003, by Barbara A. Bevelaqua, Vice President of THE BANK OF
NEW YORK, a New York corporation.
/s/ William J. Cassells
------------------------
WILLIAM J. CASSELLS
Notary Public, State of New York
No. 01CA5027729
Qualified in Bronx County
Commission Expires May 16, 2006
[SEAL]
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
This instrument was acknowledged before me on this 10th day of
February, 2003, by MARYBETH LEWICKI.
/s/ William J. Cassells
------------------------
WILLIAM J. CASSELLS
Notary Public, State of New York
No. 01CA5027729
Qualified in Bronx County
Commission Expires May 16, 2006
[SEAL]
Exhibit A-1 to
Twenty-third Supplemental Indenture
[FORM OF NOTICE OF REMOVAL OF CO-TRUSTEE]
NOTICE IS HEREBY GIVEN that the undersigned NORTHWESTERN
CORPORATION has removed DOUGLAS J. MACINNES as successor Co-Trustee under the
Mortgage and Deed of Trust, dated as of October 1, 1945, as amended, of
NorthWestern Corporation (as successor thereunder to NorthWestern Energy,
L.L.C., in turn successor thereunder to The Montana Power Company) to The Bank
of New York (as successor thereunder to Guaranty Trust Company of New York) and
Douglas J. MacInnes (as indirect successor thereunder to Arthur E. Burke), as
Trustees, such removal having taken effect at the close of business on February
7, 2003.
Dated: February , 2003
NORTHWESTERN CORPORATION
A-1-1
Exhibit A-2 to
Twenty-third Supplemental Indenture
[FORM OF NOTICE OF APPOINTMENT OF SUCCESSOR CO-TRUSTEE]
NOTICE IS HEREBY GIVEN that the undersigned NORTHWESTERN
CORPORATION, having removed Douglas J. MACInnes as successor Co-Trustee under
the Mortgage and Deed of Trust, dated as of October 1, 1945, as amended, of
NorthWestern Corporation (as successor thereunder to NorthWestern Energy,
L.L.C., in turn successor thereunder to The Montana Power Company) to The Bank
of New York (successor thereunder to Guaranty Trust Company of New York) and
Douglas J. MacInnes (as indirect successor thereunder to Arthur E. Burke), as
Trustees, has appointed MARYBETH LEWICKI as successor Co-Trustee under such
Mortgage and Deed of Trust, and MaryBeth Lewicki has accepted such appointment,
effective as of the close of business on February 7, 2003.
Dated: February , 2003
NORTHWESTERN CORPORATION
A-2-1
Exhibit B to
Twenty-third Supplemental Indenture
Form of Bond
[FORM OF FIRST MORTGAGE BOND, CREDIT AGREEMENT (2002) SERIES,
DUE 2006]
TRANSFER OF THIS BOND IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER
CONTAINED IN THE MORTGAGE TO WHICH REFERENCE IS MADE IN
THIS BOND. THE TRANSFER RESTRICTIONS ARE DESCRIBED ON THE
REVERSE OF THIS BOND.
NORTHWESTERN CORPORATION
First Mortgage Bond,
Credit Agreement (2002) Series, due 2006
No. R- $ ________________
NORTHWESTERN CORPORATION, a corporation organized and existing
under the laws of the State of Delaware (the "Company"), for value received,
hereby promises to pay to CREDIT SUISSE FIRST BOSTON, AS COLLATERAL AGENT UNDER
THE BOND COLLATERAL AGREEMENT to which reference is hereinafter made, or
(subject to the transfer restrictions hereinafter described) registered assigns,
at the office or agency of the Company in the Borough of Manhattan, The City of
New York, the sum of _________ dollars, in installments prior to, and the
balance on, December 1, 2006 (the "Maturity Date"), in each case, in such amount
as is hereinafter described for such installment or such balance, as applicable,
and in such coin or currency of the United States of America as at the time of
payment is legal tender for public and private debts, and to pay to the
registered owner interest thereon as hereinafter described in like coin or
currency and at such office or agency.
The bonds of the series of which this bond is one have been
issued to Credit Suisse First Boston, acting through its Cayman Islands Branch,
as collateral agent (together with its successors in such capacity, the
"Collateral Agent") under the Bond Collateral Agreement, dated as of February
10, 2003 (as amended or otherwise modified, or as waived, or as replaced, in
each case, from time to time in accordance with its terms, the "Collateral
Agreement"), between the Company and the Collateral Agent, to secure the
obligations of the Company to pay when due the Applicable Share (as hereinafter
defined) of the principal of and interest on the loans (the "Loans") made and
outstanding under the Credit Agreement, dated as of December 17, 2002 (as
amended or otherwise modified, or as waived, or as replaced, in each case, from
time to time in accordance with its terms, the "Credit Agreement"), among the
Company, as borrower, the several lenders from time to time parties thereto (the
"Lenders") and Credit Suisse First Boston, acting through its Cayman Islands
Branch, as administrative agent (together with its successors in such capacity,
the "Administrative Agent").
B-1
The provisions of this bond are continued on the reverse
hereof and such continued provisions shall for all purposes have the same effect
as though set fully forth at this place.
This instrument shall not become obligatory until The Bank of
New York (successor to Morgan Guaranty Trust Company of New York), the Corporate
Trustee under the Mortgage (referred to on the reverse hereof), or its
successors thereunder, shall have signed the form of authentication certificate
endorsed hereon.
IN WITNESS WHEREOF, NORTHWESTERN CORPORATION has caused this
instrument to be signed in its corporate name by its Chairman of the Board or
its President or one of its Vice Presidents by his or her signature or a
facsimile thereof, and its corporate seal to be impressed or imprinted hereon
and attested by its Secretary or one of its Assistant Secretaries by his or her
signature or a facsimile thereof.
Dated:
NORTHWESTERN CORPORATION
By:
----------------------------------------------
[Title]
Attest:
- -------------------------
[Title]
(Seal)
CORPORATE TRUSTEE'S
AUTHENTICATION CERTIFICATE
This bond is one of the bonds, of the series herein
designated, described or provided for in the within-mentioned Mortgage.
THE BANK OF NEW YORK,
as Corporate Trustee
By:
----------------------------------------------
Authorized Signatory
B-2
[FORM OF REVERSE OF BOND]
General
- -------
This bond is one of an issue of bonds of the Company issuable
in series and is one of a series known as its First Mortgage Bonds, Credit
Agreement (2002) Series, due 2006 (sometimes herein referred to as the "Bonds of
the Twenty-third Series"), all bonds of all series issued and to be issued under
and equally secured (except in so far as any sinking or other fund, established
in accordance with the provisions of the Mortgage hereinafter mentioned, may
afford additional security for the bonds of any particular series) by a Mortgage
and Deed of Trust (herein, together with any indenture supplemental thereto,
including the Twenty-third Supplemental Indenture dated as of February 1, 2003
(the "Twenty-third Supplemental Indenture"), called the "Mortgage"), dated as of
October 1, 1945, executed by The Montana Power Company (NorthWestern
Corporation, successor thereunder) to Guaranty Trust Company of New York (The
Bank of New York, successor thereunder) and Arthur E. Burke (MaryBeth Lewicki,
successor thereunder), as Trustees. Reference is made to the Mortgage for a
description of the property mortgaged and pledged, the nature and extent of the
security, the rights of the holders of the bonds and of the Trustees in respect
thereof, the duties and immunities of the Trustees, the terms and conditions
upon which the bonds are and are to be secured, the circumstances under which
additional bonds may be issued and the definition of any capitalized term used
herein but not defined herein. With the consent of the Company and to the extent
permitted by and as provided in the Mortgage, the rights and obligations of the
Company and/or the rights of the holders of the bonds and/or coupons and/or the
terms and provisions of the Mortgage may be modified or altered by affirmative
vote of the holders of at least 66-2/3% in principal amount of the bonds then
Outstanding under the Mortgage and, if the rights of the holders of one or more,
but less than all, series of bonds then Outstanding are to be affected, then
also by affirmative vote of the holders of at least 66-2/3% in principal amount
of the bonds then Outstanding of each series of bonds so to be affected
(excluding in any case bonds disqualified from voting by reason of the Company's
interest therein as provided in the Mortgage); provided that, without the
consent of the holder hereof, no such modification or alteration shall, among
other things, impair or affect the right of the holder to receive payment of the
principal of and interest on this bond, on or after the respective due dates
expressed herein, or permit the creation of any lien equal or prior to the lien
of the Mortgage or deprive the holder of the benefit of a lien on the mortgaged
and pledged property.
The principal hereof may be declared or may become due prior
to the maturity date hereinbefore named on the conditions, in the manner and at
the time set forth in the Mortgage, upon the occurrence of a default as in the
Mortgage provided.
No recourse shall be had for the payment of the principal of
or interest on this bond against any incorporator or any past, present or future
subscriber to the capital stock, stockholder, officer or director of the Company
or of any predecessor or successor corporation, as such, either directly or
through the Company or any predecessor or successor
B-3
corporation, under any rule of law, statute or constitution or by the
enforcement of any assessment or otherwise, all such liability of incorporators,
subscribers, stockholders, officers and directors being released by the holder
or owner hereof by the acceptance of this bond and being likewise waived and
released by the terms of the Mortgage.
Transfer Provisions and Restrictions
- ------------------------------------
Bonds of the Twenty-third Series shall not be transferable
except to any successor Collateral Agent under the Collateral Agreement;
provided, however, that, subject to compliance with the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
(i) on or after the day on which the Loans are accelerated in accordance with
the Credit Agreement (the "Acceleration Day"), all (but not less than all) of
the Bonds of the Twenty-third Series shall be transferable by the Collateral
Agent (together with all (but not less than all) of the South Dakota Credit
Agreement Bonds (as hereinafter defined)) to or upon the order of the Lenders in
full satisfaction and discharge of the Loans and the Obligations (as defined in
the Collateral Agreement) pursuant to Section 4.1 of the Collateral Agreement,
and (ii) following such transfer by the Collateral Agent, Bonds of the
Twenty-third Series shall be transferable (without restriction (except as
hereinafter in the following two paragraphs described)) by the registered owners
thereof.
As a condition precedent to any transfer of the Bonds of the
Twenty-third Series by the Collateral Agent, the Collateral Agent shall submit
to the Company, the Corporate Trustee and, if applicable, any bond registrar or
transfer agent for the Bonds of the Twenty-third Series (in addition to all
other documents and instruments required to be submitted pursuant to the
Mortgage) a certificate of the Collateral Agent, signed by a person purporting
to be its duly authorized officer, certifying that the transferee in such
transfer is a successor Collateral Agent under the Collateral Agreement or that
the transferees in such transfer are the Lenders or persons or entities
specified by the Lenders to which on or after the Acceleration Day all (but not
less than all) of the Bonds of the Twenty-third Series and all (but not less
than all) of the South Dakota Credit Agreement Bonds (as hereinafter defined)
are being transferred in full satisfaction and discharge of the Loans and the
Obligations (as defined in the Collateral Agreement) pursuant to Section 4.1 of
the Collateral Agreement (and the Corporate Trustee may conclusively presume the
statements in any such certificate of the Collateral Agent to be correct and
shall be fully protected in relying thereon). As a condition precedent to any
transfer of any Bond of the Twenty-third Series to a transferee other than a
successor Collateral Agent, the transferor in such transfer shall deliver to the
Company, the Corporate Trustee and, if applicable, any bond registrar or
transfer agent for the Bonds of the Twenty-third Series (in addition to all
other documents and instruments required to be submitted pursuant to the
Mortgage), (i) an opinion of counsel reasonably satisfactory to the Company, the
Corporate Trustee and, if applicable, any bond registrar or transfer agent for
the Bonds of the Twenty-third Series, or (ii) a certificate of the transferor in
such transfer, signed by a person purporting to be its duly authorized officer,
reasonably satisfactory to the Company, the Corporate Trustee and, if
applicable, the bond registrar or transfer agent for the Bonds of the
Twenty-third Series, in either case, to the
B-4
effect that such transfer is either (A) covered by an effective registration
statement of the Company under the Securities Act (setting forth the
registration number and the date of effectiveness of such registration
statement), or (B) exempt from registration under the Securities Act (setting
forth the applicable exemption from registration being relied upon and the
reason such exemption is applicable to such transfer).
Any such transfer is to be made as prescribed in the Mortgage
by the registered owner hereof in person, or by his duly authorized attorney, at
the office or agency of the Company in the Borough of Manhattan, The City of New
York, upon surrender and cancellation of the applicable Bond of the Twenty-third
Series, and, thereupon, a new fully registered temporary or definitive bond of
the same series for a like principal amount will be issued to the transferee in
exchange therefor as provided in the Mortgage. The Company and the Trustees may
deem and treat the person in whose name any Bond of the Twenty-third Series is
registered as the absolute owner thereof for the purpose of receiving payment
and for all other purposes and neither the Company nor the Trustees shall be
affected by any notice to the contrary.
In the manner prescribed in the Mortgage, Bonds of the
Twenty-third Series upon surrender thereof, for cancellation, at the office or
agency of the Company in the Borough of Manhattan, The City of New York, are
exchangeable for a like aggregate principal amount of registered bonds of the
same series of other authorized denominations.
As provided in the Mortgage, the Company shall not be required
to make transfers or exchanges of bonds of any series for a period of ten days
next preceding any interest payment date for bonds of said series, or next
preceding any designation of bonds of said series to be redeemed; provided,
however, that pursuant to a waiver by the Company in the Twenty-Third
Supplemental Indenture, these restrictions shall not be applicable to any
transfer of the Bonds of the Twenty-third Series on or prior to the Remedy
Exercise Day (as hereinafter defined).
Principal
- ---------
Principal of the Bonds of the Twenty-third Series, of which this bond
is one, is scheduled to be paid as follows: (A) on the last Business Day (as
hereinafter defined) of each March, June, September and December occurring prior
to the Maturity Date (commencing March 31, 2003), an installment of principal of
the Bonds of the Twenty-third Series in an amount equal to $700,000 (said amount
representing one quarter of one percent (0.25%) of the original aggregate
principal amount of the Bonds of the Twenty-third Series) is due and payable;
and (B) on the Maturity Date, the balance of the principal of the Bonds of the
Twenty-third Series is due and payable; in each case, unless an equal
installment or balance of the principal of the Loans is not due and payable on
such Business Day or the Maturity Date, as applicable, in accordance with the
Credit Agreement by reason of prior prepayment of the Loans (in which event,
there shall be due and payable on the Bonds of the Twenty-third Series on such
Business Day or on the Maturity Date, as applicable, an amount of principal of
said Bonds equal to the Applicable Share of the amount of principal of the
B-5
Loans that is payable on such Business Day or on the Maturity Date, as
applicable, in accordance with the Credit Agreement). As used herein, "Business
Day" means a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close.
Interest
- --------
The unpaid principal amount of the Bonds of the Twenty-third Series, of
which this Bond is one, bears interest at one or more variable interest rates
per annum which rate or rates for each day shall be equal to the rate or rates
per annum borne by the Loans in accordance with the Credit Agreement for such
day (calculated in the manner provided in the Credit Agreement for the
calculation of interest on the Loans), payable on each day on which interest is
payable on the Loans in accordance with the Credit Agreement (and in an amount
equal to the Applicable Share of the amount of interest that is payable on the
Loans on such day in accordance with the Credit Agreement) to the Collateral
Agent, as the registered owner, without regard to, or necessity for, any record
date.
Applicable Share
- ----------------
As used herein, "Applicable Share" means, as of any day, a fraction
(expressed as a percentage rounded to the eighth decimal place), (i) the
numerator of which is the aggregate principal amount of the Bonds of the
Twenty-third Series that are Outstanding on such day, and (ii) the denominator
of which is the sum of (a) the aggregate principal amount of the Bonds of the
Twenty-third Series that are Outstanding on such day, plus (b) the aggregate
principal amount of the New Mortgage Bonds, Credit Agreement (2002) Series, due
2006, of the Company (the "South Dakota Credit Agreement Bonds") that are
outstanding on such day under the Company's South Dakota Mortgage (as defined in
the Twenty-third Supplemental Indenture).
Redemption
- ----------
Bonds of the Twenty-third Series, of which this bond is one, are
subject to redemption as follows (but shall not otherwise be or become subject
to redemption, whether at the option of the holders thereof or the Company or
pursuant to any other requirements or provisions of the Indenture): (A) on each
day on which the Loans are subject to prepayment in accordance with the Credit
Agreement, Bonds of the Twenty-third Series shall be subject to redemption in an
aggregate principal amount equal to the Applicable Share of the aggregate
principal amount of the Loans that are so subject to prepayment on such day; and
(B) on the Acceleration Day, the entire aggregate principal amount of the Bonds
of the Twenty-third Series shall be subject to redemption (the "Acceleration
Redemption"); in each case, without any necessity for notice or call by the
Company or the Corporate Trustee (such notice and call being waived by the
registered owners of the Bonds of the Twenty-third Series by the acceptance of
the Bonds of the Twenty-third Series and in connection with each Redemption
Demand (as hereinafter defined)). Redemption of Bonds of the Twenty-third
Series, of which this bond is one, shall be at a redemption price equal to the
principal amount
B-6
of such Bonds of the Twenty-third Series (without premium), together with
interest accrued on said principal to and including the date of redemption
(collectively, a "Redemption Amount"). In the event of any failure by the
Company to pay when due the Redemption Amount with respect to any redemption of
Bonds of the Twenty-third Series, interest shall accrue on such unpaid
Redemption Amount at the rate or rates (and in amounts equal to the Applicable
Share of the amounts) of interest that accrue on the corresponding unpaid
principal of and interest on the Loans in accordance with the Credit Agreement.
The Corporate Trustee may conclusively presume that no redemption of
Bonds of the Twenty-third Series is required unless and until it shall have
received a written notice from the Administrative Agent, signed by a person
purporting to be its duly authorized officer, stating that the Loans are subject
to prepayment or have been accelerated, in either case, in accordance with the
Credit Agreement (a "Redemption Demand"). Each Redemption Demand also shall
state the date on which the Loans are subject to prepayment or acceleration in
accordance with the Credit Agreement, the principal amount of the Loans subject
to such prepayment or acceleration on such date, the principal amount of the
Bonds of the Twenty-third Series to be redeemed on such date in accordance with
the Twenty-third Supplemental Indenture by reason of such prepayment or
acceleration, and the Redemption Amount payable with respect to such Bonds of
the Twenty-third Series (determined in accordance with the Twenty-third
Supplemental Indenture and setting forth the amounts of the respective portions
thereof representing principal of and interest on such Bonds of the Twenty-third
Series). Each Redemption Demand shall be accompanied by a written waiver by the
Collateral Agent, as registered owner of all of the Bonds of the Twenty-third
Series then Outstanding, of notice of redemption and call for redemption by the
Company or the Corporate Trustee of the Bonds of the Twenty-third Series subject
to redemption as described in such Redemption Demand. The Corporate Trustee may
conclusively presume the statements contained in each Redemption Demand to be
correct.
Additional Terms
- ----------------
Bonds of the Twenty-third Series shall be subject to the following
other terms and conditions:
(I) For the avoidance of any doubt (in the case of the following
clauses (ii) and (iii)) and notwithstanding anything herein or in the
Twenty-third Supplemental Indenture to the contrary other than the provisions of
subdivision (III) below (in the case of the following clause (iii)): (i) prior
to the Remedy Exercise Day (as hereinafter defined), each payment of principal
of or interest on the Bonds of the Twenty-third Series that becomes due and
payable on any day (whether by reason of stated due date, acceleration,
redemption or otherwise) shall correspond to, and be equal to the Applicable
Share of, a payment of principal of or interest on the Loans that becomes due
and payable on such day in accordance with the Credit Agreement; (ii) on the
Acceleration Day, the Redemption Amount with respect to the Acceleration
Redemption shall be due and payable; and (iii) on and after the Remedy Exercise
Day (as hereinafter defined), (a) the Redemption Amount with respect to the
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Acceleration Redemption shall bear interest (to the extent permitted by law in
the case of interest on the portion of the Redemption Amount representing
interest on the applicable Bonds) at a variable rate per annum which rate for
each day shall be equal to the Prime-Based Rate (as defined in the Twenty-third
Supplemental Indenture and as calculated by the Corporate Trustee) for such day
plus 6.75%, payable in the manner provided in the Mortgage for the payment of
defaulted interest (including, without limitation, if applicable, Section 76 of
the Mortgage), and (b) payments of principal of and interest on the Bonds of the
Twenty-third Series shall cease to correspond to payments of principal of and
interest on the Loans (and shall not be satisfied and discharged by the
satisfaction and discharge of the Loans). As used herein, "Remedy Exercise Day"
means the day (on or after the Acceleration Day) on which all (but not less than
all) of the Bonds of the Twenty-third Series and all (but not less than all) of
the South Dakota Credit Agreement Bonds are transferred by the Collateral Agent
to or upon the order of the Lenders in full satisfaction and discharge of the
Loans and the Obligations (as defined in the Collateral Agreement) pursuant to
Section 4.1 of the Collateral Agreement (as such transfer is evidenced by the
registration in the names of the transferees in such transfer of certificates
evidencing all (but not less than all) of the Bonds of the Twenty-third Series
and all (but not less than all) of the South Dakota Credit Agreement Bonds).
The Corporate Trustee may conclusively presume that the Remedy Exercise
Day has not occurred unless and until it shall have received a written notice
from the Collateral Agent, signed by a person purporting to be its duly
authorized officer, stating that the Remedy Exercise Day has occurred (the
"Remedy Exercise Day Notice"). The Remedy Exercise Day Notice (i) shall set
forth the date of the Remedy Exercise Day, (ii) in the case of any such transfer
with respect to which the Corporate Trustee is not the transfer agent, have
attached thereto, as evidence of the transfer of the Bonds of the Twenty-third
Series and the South Dakota Credit Agreement Bonds that gave rise to the
occurrence of the Remedy Exercise Day, copies of certificates registered in the
names of the transferees in such transfer of all (but not less than all) of the
Bonds of the Twenty-third Series and all (but not less than all) of the South
Dakota Credit Agreement Bonds, and (iii) if the Remedy Exercise Day Notice is
received by the Corporate Trustee on a day other than the Remedy Exercise Day,
the Prime Rate (as defined in the Supplemental Indenture) for each day on and
after the Remedy Exercise Day and on and prior to the Business Day on which the
Corporate Trustee received the Remedy Exercise Day Notice. The Corporate Trustee
may conclusively presume the statements in the Remedy Exercise Day Notice to be
correct (and the Corporate Trustee shall be fully protected in relying thereon).
(II) Prior to the Remedy Exercise Day, the obligation of the Company to
make each payment of principal of or interest on the Bonds of the Twenty-third
Series that becomes due and payable in accordance with the Twenty-third
Supplemental Indenture (i) shall be fully satisfied and discharged if the
corresponding payment of the principal of or interest on the Loans shall have
been fully paid under and in accordance with the Credit Agreement, and (ii)
shall be partially satisfied and discharged if the corresponding payment of the
principal of or interest on the Loans shall have been partially paid under and
in accordance with the Credit Agreement (such partial satisfaction and discharge
with respect to
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the Bonds of the Twenty-third Series to be in an amount equal to the Applicable
Share of the amount of such partial payment with respect to the Loans).
(III) Nothing in any of the Bonds of the Twenty-third Series
(including, without limitation, any reference to the principal payable with
respect to the Bonds of the Twenty-third Series being determined on the basis of
the Applicable Share of the principal payable with respect to the Loans) shall,
or shall be deemed or construed to, (i) increase the aggregate principal amount
of the Bonds of the Twenty-third Series that are Outstanding from time to time,
(ii) cause or permit an amount of principal of the Bonds of the Twenty-third
Series to be or to become due and payable which, when added to all other
principal of such Bonds theretofore paid, exceeds $280,000,000, or (iii) cause
or permit to be or to become due and payable interest on the Bonds of the
Twenty-third Series which is payable on any principal of the Bonds of the
Twenty-third Series that is in excess of the principal of the Bonds of the
Twenty-third Series as restricted pursuant to the preceding clauses (i) and
(ii).
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