Exhibit 4(d)
GUARANTEE AGREEMENT
Between
The Montana Power Company
(as Guarantor)
and
The Bank of New York
(as Guarantee Trustee)
dated as of
_____________ ___, 199_
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . 4
SECTION 2.01 Conflict With Trust Indenture Act . . . . . . . . . 4
SECTION 2.02 Lists of Holders of Preferred Securities . . . . . . 4
SECTION 2.03 Reports by the Guarantee Trustee and the
Guarantor . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.04 Preferential Collection of Claims Against the
Guarantor . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.05 Compliance Certificates and Opinions . . . . . . . . 5
SECTION 2.06 Events of Default; Waiver . . . . . . . . . . . . . 6
SECTION 2.07 Notice of Event of Default . . . . . . . . . . . . . 6
SECTION 2.08 Conflicting Interests . . . . . . . . . . . . . . . 6
ARTICLE III POWERS, DUTIES, RESPONSIBILITIES AND RIGHTS OF
THE GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . 6
SECTION 3.01 Certain Powers, Duties and Responsibilities
of the Guarantee Trustee . . . . . . . . . . . . . 6
SECTION 3.02 Certain Rights of the Guarantee Trustee . . . . . . 7
ARTICLE IV GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.01 Guarantee Trustee; Eligibility . . . . . . . . . . . 9
SECTION 4.02 Compensation and Reimbursement . . . . . . . . . . . 10
SECTION 4.03 Appointment, Removal and Resignation of the
Guarantee Trustee . . . . . . . . . . . . . . . . . 10
ARTICLE V GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.01 Guarantee . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.02 Waiver of Notice and Demand . . . . . . . . . . . . 11
SECTION 5.03 Obligations Not Affected . . . . . . . . . . . . . . 12
SECTION 5.04 Rights of Holders . . . . . . . . . . . . . . . . . 13
SECTION 5.05 Guarantee of Payment . . . . . . . . . . . . . . . . 13
SECTION 5.06 Subrogation . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.07 Independent Obligations . . . . . . . . . . . . . . 13
ARTICLE VI SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.01 Subordination . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7.01 Termination . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 14
SECTION 8.01 Successors and Assigns . . . . . . . . . . . . . . . 14
SECTION 8.02 Amendments . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.03 Notices . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.04 Benefit . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.05 Interpretation . . . . . . . . . . . . . . . . . . . 16
SECTION 8.06 Governing Law . . . . . . . . . . . . . . . . . . . 17
CROSS-REFERENCE TABLE
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Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
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310(a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.01
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . 4.01, 2.08
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01, 3.02
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.07
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . 5.04, 2.06
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
_____________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
__________ __, 199_, is executed and delivered by The Montana Power
Company, a Montana corporation (the "Guarantor"), and The Bank of New York,
as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Montana Power Capital I, a Delaware statutory business trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of _________ __, 199__ among the Trustees of
the Issuer named therein and The Montana Power Company, as Depositor, the
Issuer is issuing as of the date hereof $___________ aggregate liquidation
amount of its ___% Cumulative Quarterly Income Preferred Securities (the
"Preferred Securities") representing preferred undivided beneficial
ownership interests in the Issuer and having the terms set forth in the
Trust Agreement;
WHEREAS, the Preferred Securities are to be issued for sale by
the Issuer and the proceeds are to be invested in $____ principal amount
of Debentures (as defined in the Trust Agreement); and
WHEREAS, in order to enhance the value of the Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree,
to the extent set forth herein, to pay to the Holders (as defined herein)
the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase of Debentures,
which purchase the Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Guarantee Agreement for the benefit of
the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS.
As used in this Guarantee Agreement, the terms set forth below
shall, unless the context otherwise requires, have the following meanings.
Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust
Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the
foregoing.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or, if at any time after the date of execution and
delivery of this Guarantee Agreement such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act,
then the body, if any, performing such duties at such time.
"Common Securities" means the securities representing common
undivided beneficial ownership interests in the assets of the Issuer.
"Dollar" or "$" means a dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.
"Event of Default" means a failure by the Guarantor to perform
any of its payment or other obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by or on behalf of the Issuer:
(i) any accrued and unpaid Distributions that are required to be paid on
such Preferred Securities but only if and to the extent that the Property
Trustee has available in the Payment Account funds sufficient to make such
payment, (ii) the Redemption Price with respect to the Preferred Securities
called for redemption by the Issuer but only if and to the extent that the
Property Trustee has available in the Payment Account funds sufficient to
make such payment, (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (unless Debentures are distributed
to the Holders), the lesser of (a) the aggregate of the Liquidation Amount
and all accrued and unpaid Distributions on the Preferred Securities to the
date of payment, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each
such Successor Guarantee Trustee.
"Guarantor Request" means a written request or order signed in
the name of the Guarantor by an Authorized Officer and delivered to the
Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities then outstanding;
provided, however, that in determining whether the holders of the requisite
percentage of Preferred Securities have given any request, notice, consent
or waiver hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor.
"Indenture" means the Indenture dated as of ________ __, 199_,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee pursuant to which the Debentures are issued.
"Majority in liquidation amount of the Preferred Securities"
means a vote by Holders, voting separately as a class, of more than 50% of
the aggregate liquidation amount of all Preferred Securities.
"Officer's Certificate" means a certificate signed by the
Chairman of the Board, the President, any Vice President, the Treasurer,
any Assistant Treasurer, or any other officer or agent of the Guarantor
duly authorized by the Board of Directors of the Guarantor to act in
respect of matters relating to this Guarantee Agreement, delivered to the
Guarantee Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Guarantor, or other counsel acceptable to the Guarantee
Trustee.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary,
any assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge
of and familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section
4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Guarantee Agreement limits, qualifies or
conflicts with another provision hereof which is required or deemed to be
included in this Guarantee Agreement by, or is otherwise governed by, any
of the provisions of the Trust Indenture Act, such other provision shall
control; and if any provision hereof otherwise conflicts with the Trust
Indenture Act, the Trust Indenture Act shall control.
SECTION 2.02 LISTS OF HOLDERS OF PREFERRED SECURITIES.
Semiannually, not later than June 1 and December 1 in each year,
commencing June 1, 1997, and at such other times as the Guarantee Trustee
may request in writing, the Guarantor shall furnish or cause to be
furnished to the Guarantee Trustee information as to the names and
addresses of the Holders, and the Guarantee Trustee shall preserve such
information and similar information received by it in any other capacity
and afford to the Holders access to information so preserved by it, all to
such extent, if any, and in such manner as shall be required by the Trust
Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE AND THE GUARANTOR.
Not later than July 31 in each year, commencing July 31, 1997,
the Guarantee Trustee shall transmit to the Holders and the Commission a
report, dated as of the next preceding May 31, with respect to any events
and other matters described in Section 313(a) of the Trust Indenture Act,
in such manner and to the extent required by the Trust Indenture Act. The
Guarantee Trustee shall transmit to the Holders and the Commission, and the
Guarantor shall file with the Guarantee Trustee (within 30 days after
filing with the Commission in the case of reports which pursuant to the
Trust Indenture Act must be filed with the Commission and furnished to the
Guarantee Trustee) and transmit to the Holders, such other information,
reports and other documents, if any, at such times and in such manner, as
shall be required by the Trust Indenture Act.
SECTION 2.04 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
GUARANTOR.
If the Guarantee Trustee shall be or become a creditor of the
Guarantor or any other obligor upon the Preferred Securities (other than by
reason of a relationship described in Section 311(b) of the Trust Indenture
Act), the Guarantee Trustee shall be subject to any and all applicable
provisions of the Trust Indenture Act regarding the collection of claims
against the Guarantor or such other obligor. For purposes of Section
311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, ▇▇▇▇ of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Guarantor for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares
or merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the
security is received by the Guarantee Trustee simultaneously with the
creation of the creditor relationship with the Guarantor arising from
the making, drawing, negotiating or incurring of the draft, ▇▇▇▇ of
exchange, acceptance or obligation.
SECTION 2.05 COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Guarantee
Agreement, upon any application or request by the Guarantor to the
Guarantee Trustee to take any action under any provision of this Guarantee
Agreement, the Guarantor shall, if requested by the Guarantee Trustee,
furnish to the Guarantee Trustee an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Guarantee Agreement
relating to the proposed action (including any covenants compliance with
which constitutes a condition precedent) have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Guarantee
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that each Person signing such certificate
or opinion has read such covenant or condition and the
definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such Person,
such Person has made such examination or investigation as is
necessary to enable such Person to express an informed opinion as
to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of the Preferred
Securities may, by vote, on behalf of all of the Holders, waive any past
Event of Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Guarantee
Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.07 NOTICE OF EVENT OF DEFAULT.
The Guarantee Trustee shall give notice of any Event of Default
hereunder to the Holders of Preferred Securities in the manner and to the
extent required to do so by the Trust Indenture Act, unless such Event of
Default shall have been cured or waived.
SECTION 2.08 CONFLICTING INTERESTS.
If the Guarantee Trustee shall have or acquire any conflicting
interest within the meaning of the Trust Indenture Act, it shall either
eliminate such conflicting interest or resign to the extent, in the manner
and with the effect, and subject to the conditions, provided in the Trust
Indenture Act and this Guarantee Agreement. The Trust Agreement and the
Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES, RESPONSIBILITIES AND
RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01 CERTAIN POWERS, DUTIES AND RESPONSIBILITIES OF THE
GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee
shall not transfer this Guarantee Agreement or any rights hereunder to
any Person except a Holder exercising his or her rights pursuant to
Section 5.04 or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee,
and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders by such appropriate judicial
proceedings as it shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or
agreement in this Guaranty Agreement or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
(c) The Guarantee Trustee shall have and be subject to all the
duties and responsibilities specified with respect to an indenture
trustee in the Trust Indenture Act and no implied covenants or
obligations shall be read into this Guarantee Agreement against the
Guarantee Trustee.
(d) No provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) Notwithstanding anything contained in this Guarantee
Agreement to the contrary, the duties and responsibilities of the
Guarantee Trustee under this Guarantee Agreement shall be subject to
the protections, exculpations and limitations on liability afforded to
the Guarantee Trustee under this Guarantee Agreement and the Trust
Indenture Act, including those deemed by the Trust Indenture Act to be
included herein.
(f) Whether or not therein expressly so provided, every
provision of this Guarantee Agreement relating to the conduct or
affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section.
SECTION 3.02 CERTAIN RIGHTS OF THE GUARANTEE TRUSTEE.
Subject to the provisions of Section 3.01 and to the applicable
provisions of the Trust Indenture Act:
(a) the Guarantee Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Guarantor shall be
sufficiently evidenced by a Guarantor Request, or as otherwise
expressly provided herein, and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate;
(d) the Guarantee Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder pursuant to this
Guarantee Agreement, unless such Holder shall have offered to the
Guarantee Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Guarantee Trustee
shall determine to make such further inquiry or investigation, it
shall (subject to applicable legal requirements) be entitled to
examine, during normal business hours, the books, records and premises
of the Guarantor, personally or by agent or attorney;
(g) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;
(h) the Guarantee Trustee shall not be charged with knowledge of
any Event of Default unless either (1) a Responsible Officer of the
Trustee shall have actual knowledge of the Event of Default or (2)
written notice of such Event of Default shall have been given to the
Guarantee Trustee by the Guarantor, any other obligor on the Preferred
Securities or by any Holder of the Preferred Securities; and
(i) no provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred
or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
There shall at all times be a Guarantee Trustee hereunder which
shall be
(a) a corporation organized and doing business under the laws
of the United States, any State or Territory thereof or the
District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by
Federal or State authority, or
(b) if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign
government, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
$50,000,000 or the Dollar equivalent of the applicable foreign
currency and subject to supervision or examination by authority of
such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable
to United States institutional trustees,
and, in either case, qualified and eligible under this Article and the
Trust Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of such supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 4.02 COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Guarantee Trustee shall
from time to time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Guarantee Trustee in
accordance with the provisions of this Guarantee (including the reasonable
compensation and expenses of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any
predecessor Guarantee Trustee for, and to hold it harmless from and
against, any and all loss, damage, claim, liability or expense, including
taxes (other than taxes based upon the income of the Guarantee Trustee)
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance of the trust created by, or the
administration of, this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the
Guarantor under this Section, the Guarantee Trustee shall have a lien prior
to the Preferred Securities upon all the property and funds held or
collected by the Guarantee Trustee as such, except funds held in trust for
the payment of principal of, and premium (if any) or interest on,
particular obligations of the Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the termination of
this Guarantee Agreement.
SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF THE
GUARANTEE TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of Default shall
have occurred and be continuing, the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.03 within 60 days
after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court
may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and each
removal of the Guarantee Trustee and each appointment of a successor
Guarantee Trustee to all Holders in the manner provided in Section 8.03
hereof. Each notice shall include the name of the successor Guarantee
Trustee and the address of its Corporate Trust Office.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.02 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.03 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period
on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04 RIGHTS OF HOLDERS.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) if an Event of Default has occurred and is
continuing, the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement
or exercising any trust or power conferred upon the Guarantee Trustee under
this Guarantee Agreement; and (iv) any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement without first instituting a legal proceeding against
the Issuer or any other person or entity.
SECTION 5.05 GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not
of collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication).
SECTION 5.06 SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by
the Guarantor under this Guarantee Agreement; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire
by way of subrogation or any indemnity, reimbursement or other agreement,
in all cases as a result of payment under this Guarantee Agreement, if, at
the time of any such payment, any amounts of Guarantee Payments are due and
unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to
the Holders.
SECTION 5.07 INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Guarantee Agreement notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01 SUBORDINATION.
This Guarantee Agreement will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment
to all Senior Indebtedness (as defined in the Indenture) of the Guarantor
to the same extent as the Debentures. Nothing in this Section 6.01 shall
apply to claims of, or payments to, the Guarantee Trustee under or pursuant
to Section 4.02 hereof.
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION.
This Guarantee Agreement shall terminate and be of no further
force and effect upon: (i) full payment of the Redemption Price of all
Preferred Securities, and all accrued and unpaid Distributions to the date
of redemption, (ii) the distribution of Debentures to Holders in exchange
for all of the Preferred Securities or (iii) full payment of the amounts
payable in accordance with the Trust Agreement upon liquidation of the
Issuer. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at
any time any Holder must restore payment of any sums paid with respect to
Preferred Securities or under this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that is
permitted under Article Eleven of the Indenture, the Guarantor shall not
assign its obligations hereunder.
SECTION 8.02 AMENDMENTS.
This Guarantee Agreement may be amended only by an instrument in
writing entered into by the Guarantor and the Guarantee Trustee. Except
with respect to any changes which do not adversely affect the rights of
Holders (in which case no consent of Holders will be required), this
Guarantee Agreement may only be amended with the prior approval of the
Holders of not less than 66 2/3% in aggregate liquidation amount of all the
outstanding Preferred Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of Holders shall apply to the giving of
such approval. Nothing herein contained shall be deemed to require that
the Guarantee Trustee enter into any amendment of this Guarantee Agreement.
SECTION 8.03 NOTICES.
Any notice, request or other communication required or permitted
to be given hereunder shall be in writing, duly signed by the party giving
such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders
of the Preferred Securities:
The Montana Power Company
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Treasurer
(b) if given to the Issuer, in care of the Administrative
Trustees, at the Issuer's (and the Administrative Trustee's) address
set forth below or such other address as the Administrative Trustees
on behalf of the Issuer may give notice of to the Holders:
Montana Power Capital I
c/o The Montana Power Company
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▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address set forth
below or such other address as the Guarantee Trustee may give notice
of to the Holders of the Preferred Securities:
The Bank of New York
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▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of
which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 8.04 BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders
and, subject to Section 3.01(a), is not separately transferable from the
Preferred Securities.
SECTION 8.05 INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(b) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(c) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(e) a reference to the singular includes the plural and vice
versa; and
(f) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
The Montana Power Company
By: ___________________________________
Name:
Title:
The Bank of New York,
as Guarantee Trustee
By: __________________________________
Name:
Title:
