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Registration Nos. 333-16353, 333-16353-01,
333-16353-02 and 333-16353-03
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
AMENDMENT NO. 1 TO
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
THE WASHINGTON WATER POWER COMPANY
(Exact name of registrant as specified in its charter)
WASHINGTON 91-0462470
(State or other jurisdiction of (I.R.S.
incorporation or organization) Employer
Identification
No.)
1411 East Mission Avenue
Spokane, Washington 99202
(509) 489-0500
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
WASHINGTON WATER POWER CAPITAL I
WASHINGTON WATER POWER CAPITAL II
WASHINGTON WATER POWER CAPITAL III
(Exact name of each registrant as specified in Trust Agreements)
Delaware EACH TO BE
(State or other jurisdiction of APPLIED FOR
incorporation or organization (I.R.S.
of each registrant) Employer
Identification
Nos.)
C/O THE WASHINGTON WATER POWER COMPANY
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99202
(509) 489-0500
(Address, including zip code, and telephone number, including area code,
of each registrant's principal executive offices)
-------------------------
J.E. ELIASSEN, Senior Vice President J. ANTHONY TERRELL
& Chief Financial Officer KEVIN STACEY
The Washington Water Power Company Reid & Priest LLP
1411 East Mission Avenue 40 West 57th Street
Spokane, Washington 99202 New York, New York 10019
(509) 489-0500 (212) 603-2000
(Name and address, including zip code, and telephone number,
including area code, of agents for service)
-------------------------
It is respectfully requested that the Commission
send copies of all notices, orders and communications to:
John E. Baumgardner, Jr.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
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-------------------------
CALCULATION OF REGISTRATION FEE
==========================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OFFERING AGGREGATE
OF EACH CLASS OF AMOUNT PRICE OFFERING AMOUNT OF
SECURITIES TO BE TO BE PER UNIT PRICE REGISTATION
REGISTERED REGISTERED(1) (1)(2)(3) (1)(2)(3) FEE(2)
-------------------------------------------------------------------------
WASHINGTON WATER
POWER CAPITAL I,
II AND III
SECURITIES . . .
-------------------------------------------------------------------------
THE WASHINGTON
WATER POWER
COMPANY GUARANTEES
WITH RESPECT TO
WASHINGTON WATER
POWER CAPITAL I,
II AND III
SECURITIES AND THE
WASHINGTON WATER
POWER COMPANY
OBLIGATIONS WITH
RESPECT TO SUCH
SECURITIES UNDER
AN INDENTURE AND
AN AMENDED AND
RESTATED
DECLARATION OF
TRUST(4) . . . .
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THE WASHINGTON
WATER POWER
COMPANY
SUBORDINATED
DEBT SECURITIES
=================--------------------------------------------------------
TOTAL . . . . . . $150,000,000 100% $150,000,000 $45,455.00(5)
=========================================================================
(1) Includes such indeterminate number of Securities of Washington
Water Power Capital I, Washington Water Power Capital II and
Washington Water Power Capital III (each, a "Trust") and such
indeterminate principal amount of Subordinated Debt Securities of
The Washington Water Power Company as may from time to time be
issued at indeterminate prices. Subordinated Debt Securities may
be issued and sold to any Trust, in which event such Subordinated
Debt Securities may later be distributed to the holders of
Securities upon a dissolution of such Trust and the distribution
of the assets thereof.
(2) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457. The aggregate public offering price of
the Securities of the Trusts and the Subordinated Debt Securities
of The Washington Water Power Company registered hereby will not
exceed $150,000,000.
(3) Exclusive of accrued interest and dividends, if any.
(4) Includes the rights of the holders of the Securities under the
Guarantees and certain back-up undertakings, comprised of the
obligations of The Washington Water Power Company to provide
certain indemnities in respect of, and pay and be responsible for
certain costs, expenses, debts and liabilities of, each Trust and
such obligations as set forth in the Expense Agreement relating
to each Trust and the Indenture, in each case as further
described in the Registration Statement. The Guarantees, when
taken together with The Washington Water Power Company's
obligations under the Subordinated Debt Securities, the
Indenture, the Amended and Restated Declaration of Trust of each
Trust and the Expense Agreement relating to each Trust, will
effectively provide a full and unconditional guarantee, on a
subordinated basis, by The Washington Water Power Company of
payments due on the Securities. No separate consideration will
be received for any Guarantees or such back-up obligations.
(5) Registration fee paid with filing of Registration Statement on
Form S-3 on November 19, 1996.
SUBJECT TO COMPLETION, DATED ________, 199_
PRELIMINARY PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED _____, 199_)
___________ SECURITIES
WASHINGTON WATER POWER CAPITAL I
_____% _________ SECURITIES, SERIES A
(LIQUIDATION AMOUNT $___ PER SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED BY
THE WASHINGTON WATER POWER COMPANY
_______________
The _____% _________ Securities, Series A (the "Securities") offered
hereby represent undivided beneficial interests in the assets of Washington
Water Power Capital I, a statutory business trust formed under the laws of
the State of Delaware ("Washington Water Power Capital" or the "Trust").
The Washington Water Power Company, a Washington corporation (the
"Company"), will own all the common securities (the "Common Securities"
and, together with the Securities, the "Trust Securities") representing
undivided beneficial interests in the assets of Washington Water Power
Capital. Washington Water Power Capital exists for the sole purpose of
issuing the Trust Securities and investing the proceeds thereof in an
equivalent amount of _____% Junior Subordinated Deferrable Interest
Debentures, Series A, due 20__ (the "Subordinated Debt Securities") of
the Company. The Subordinated Debt Securities and the Securities and the
related Securities Guarantees in respect of which this Prospectus
Supplement is being delivered shall be referred to herein as the "Offered
Securities." The Subordinated Debt Securities when issued will be unsecured
obligations of the Company and will be subordinate and junior in right of
payment to certain other indebtedness of the Company, as described herein.
Upon an event of default under the Declaration (as defined herein), the
holders of Securities will have a preference over the holders of the
Common Securities with respect to payments in respect of distributions
and payments upon redemption, liquidation and otherwise.
(continued on next page)
_______________
SEE "RISK FACTORS" BEGINNING ON PAGE S-5 OF THIS PROSPECTUS SUPPLEMENT
FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE SECURITIES,
INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF
DISTRIBUTIONS ON THE SECURITIES MAY BE DEFERRED AND THE RELATED UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
Application will be made to list the Securities on the New York Stock
Exchange (the "NYSE"). If approved, trading of the Securities on the NYSE
is expected to commence within a 30-day period after the initial delivery
of the Securities. See "Underwriting."
_______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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INITIAL PUBLIC
OFFERING UNDERWRITING PROCEEDS TO
PRICE(1) COMMISSION(2) TRUST(3)(4)
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Per Security . . . . . $ (3) $
-------------------------------------------------------------------------
Total . . . . . . . . . $ (3) $
=========================================================================
(1) Plus accrued distributions, if any, from _____________, 199_.
(2) Washington Water Power Capital and the Company have agreed to
indemnify the several Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Securities
will be invested in the Subordinated Debt Securities, the Company has
agreed to pay to the Underwriters as compensation (the "Underwriters'
Compensation") for their arranging the investment therein of such
proceeds $.____ per Security (or $_________ in the aggregate);
provided, however, that such compensation for sales of 10,000 or more
Securities to a single purchaser will be $.__ per Security. Therefore,
to the extent of such sales, the actual amount of Underwriters'
Compensation will be less than the aggregate amount specified in the
preceding sentence. See "Underwriting."
(4) Expenses of the offering which are payable by the Company are
estimated to be $_______.
The Securities offered hereby are offered severally by the Underwriters,
as specified herein, subject to receipt and acceptance by them and subject
to their right to reject any order in whole or in part. It is expected that
delivery of the Securities will be made only in book-entry form through the
facilities of The Depository Trust Company, on or about ______, 199_.
_______________
MERRILL LYNCH & CO.
The date of this Prospectus Supplement is ___________, 199_.
Information contained in this prospectus supplement and the accompanying
prospectus is subject to completion or amendment. A Registration Statement
relating to these securities has been filed with the Securities and
Exchange Commission. These securities may not be sold nor may offers to buy
be accepted prior to the time the Registration Statement becomes effective.
This prospectus supplement and the accompanying prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
(continued from previous page)
Holders of the Securities are entitled to receive cumulative cash
distributions at a rate of ____% per annum of the liquidation amount of
$___ per Security, accruing from the date of original issuance and payable
_________ in arrears on __________ of each year, commencing ________ __,
199_ ("distributions"). The payment of distributions out of moneys held by
Washington Water Power Capital and payments on liquidation of Washington
Water Power Capital or the redemption of Securities, as set forth below,
are guaranteed by the Company (the "Guarantee") to the extent described
herein and under "Description of the Securities Guarantees" in the
accompanying Prospectus. The Guarantee covers payments of distributions and
other payments on the Securities only if and to the extent that Washington
Water Power Capital has funds available therefor, which will not be the
case unless the Company has made a payment of interest or principal or
other payments on the Subordinated Debt Securities held by Washington Water
Power Capital as its sole asset. The Guarantee, when taken together with
the Company's obligations under the Subordinated Debt Securities, the
Indenture (as defined herein), the Declaration and the Expense Agreement
(as defined in the accompanying Prospectus), effectively provide a full and
unconditional guarantee, on a subordinated basis, of amounts due on the
Securities. See "Risk Factors -- Rights Under the Guarantee; Limitation as
to Funds Available to the Trust" herein. The obligations of the Company
under the Guarantee are subordinate and junior in right of payment to all
other liabilities of the Company. The obligations of the Company under the
Subordinated Debt Securities are subordinate and junior in right of payment
to all present and future Senior Indebtedness (as defined in the
accompanying Prospectus) of the Company, which aggregated approximately
$814 million at September 30, 1996, and rank pari passu with the
obligations to or rights of the Company's other general unsecured
creditors. The Subordinated Debt Securities purchased by the Trust may be
subsequently distributed pro rata to holders of the Securities and Common
Securities in connection with the dissolution of the Trust, upon the
occurrence of certain events.
The distribution rate and the distribution payment date and other payment
dates for the Securities will correspond to the interest rate and interest
payment date and other payment dates on the Subordinated Debt Securities,
which will be the sole assets of the Trust. As a result, if principal or
interest is not paid on the Subordinated Debt Securities, no amounts will
be paid on the Securities. If the Company does not make principal or
interest payments on the Subordinated Debt Securities, the Trust will not
have sufficient funds to make distributions on the Securities, in which
event the Guarantee will not apply to such distributions until the Trust
has sufficient funds available therefor.
So long as the Company shall not be in default in the payment of interest
on the Subordinated Debt Securities, the Company has the right to defer
payments of interest on the Subordinated Debt Securities by extending the
interest payment period on the Subordinated Debt Securities at any time for
up to __ consecutive Scheduled Interest Periods (as defined in the
accompanying Prospectus) (each, an "Extension Period"). If interest
payments are so deferred, distributions will also be deferred. During such
Extension Period, distributions will continue to accrue with interest
thereon, to the extent permitted by applicable law, at a rate of ______%
per annum compounded _________, and during any Extension Period, holders of
Securities will be required to include income in the form of original issue
discount ("OID") in their gross income for United States federal income tax
purposes in advance of receipt of the cash distributions with respect to
such deferred interest payments. There could be multiple Extension Periods
of varying lengths throughout the term of the Subordinated Debt Securities.
See "Risk Factors -- Option to Extend Interest Payment Period;"
"Description of the Subordinated Debt Securities -- Option to Extend
Interest Payment Period" and "Certain United States Federal Income Tax
Considerations -- Original Issue Discount" herein.
The Subordinated Debt Securities are redeemable by the Company, in whole
or in part, from time to time, on or after ________ __, 20__, or, in whole
but not in part, at any time in certain circumstances upon the occurrence
of a Tax Event (as defined herein). If the Company redeems Subordinated
Debt Securities, the Trust must redeem on a pro rata basis Trust Securities
having an aggregate liquidation amount equal to the aggregate principal
amount of the Subordinated Debt Securities so redeemed at $___ per Security
plus accrued and unpaid distributions thereon (the "Redemption Price") to
the date fixed for redemption. See "Description of the Securities --
Redemption" herein. The Securities will be redeemed upon maturity of the
Subordinated Debt Securities. In addition, upon the occurrence of a Tax
S-2
Event arising from a change in law or a change in legal interpretation
regarding tax matters, unless the Subordinated Debt Securities are redeemed
at the option of the Company, the Trust shall be dissolved, with the result
that the Subordinated Debt Securities will be distributed to the holders of
the Securities, on a pro rata basis, in lieu of any cash distribution. See
"Description of the Securities -- Tax Event Redemption or Distribution"
herein. If the Subordinated Debt Securities are distributed to the holders
of the Securities, the Company will use all reasonable efforts to have the
Subordinated Debt Securities listed on the NYSE or on such other exchange
as the Securities are then listed. See "Description of the Securities --
Tax Event Redemption or Distribution" and "Description of the Subordinated
Debt Securities" herein.
In the event of the involuntary or voluntary dissolution, winding-up or
termination of the Trust, the holders of the Securities will be entitled to
receive for each Security a liquidation amount of $___ plus accrued and
unpaid distributions thereon (including interest thereon) to the date of
payment, unless, in connection with such dissolution, the Subordinated Debt
Securities are distributed to the holders of the Securities. See
"Description of the Securities -- Liquidation Distribution Upon
Dissolution" herein.
The Securities will be represented by one or more global certificates
registered in the name of The Depository Trust Company ("DTC") or its
nominee. Beneficial interests in the Securities will be shown on, and
transfers thereof will be effected only through, records maintained by
participants in DTC. Except as described herein, Securities in
certificated form will not be issued in exchange for the global
certificates. See "Description of the Securities -- Book-Entry Only
Issuance - The Depository Trust Company" herein.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW
YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH
STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-3
THE WASHINGTON WATER POWER COMPANY
SELECTED HISTORICAL FINANCIAL INFORMATION
The following table, which is presented solely to furnish limited
introductory information regarding the Company, sets forth selected
historical financial information with respect to the Company and its
consolidated subsidiaries for the periods indicated. This information is
qualified in its entirety by reference to the detailed information and
financial statements and notes thereto included in the documents which are
incorporated herein by reference and should be read together therewith. See
"Incorporation of Certain Documents by Reference" in the accompanying
Prospectus. The selected historical financial information for each of the
five years in the period ended December 31, 1995, has been derived from the
audited consolidated financial statements of the Company.
DOLLARS IN MILLIONS EXCEPT PER
SHARE AMOUNTS
--------------------------------
TWELVE MONTHS ENDED SEPTEMBER 30,
---------------------------------
1996 1995
---- ----
FINANCIAL DATA
Total Revenues . . . . . . . . . . . . $ 903.9 705.2
Income Before Income Taxes . . . . . . 160.3 128.7
Net Income . . . . . . . . . . . . . . 101.8 81.2
Earnings per Share of Common Stock . . 1.67 1.32
Net Utility Plant . . . . . . . . . . . 1,380.0 1,342.2
Total Assets . . . . . . . . . . . . . 2,114.5 2,000.8
Long-Term Debt . . . . . . . . . . . . 727.1 688.5
Total Common Equity . . . . . . . . . . 719.9 699.0
Net Cash Provided By Operating
Activities . . . . . . . . . . . . . 182.3 137.7
Capital Expenditures and Investments . 124.9 111.6
Ratio of Earnings to Fixed Charges* . . 3.41 3.10
DOLLAS IN MILLIONS EXCEPT PER SHARE AMOUNTS
-------------------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
FINANCIAL DATA
Total Revenues . . . . $ 755.0 670.8 640.6 557.8 566.8
Income Before Income
Taxes . . . . . . . . 139.5 121.9 125.3 113.6 108.7
Net Income . . . . . . 87.1 77.2 82.8 74.7 72.2
Earnings per Share of
Common Stock . . . . 1.41 1.28 1.44 1.37 1.34
Net Utility Plant . . . 1,357.4 1,329.0 1,254.0 1,191.2 1,144.6
Total Assets . . . . . 2,098.9 1,994.3 1,837.8 1,534.0 1,521.5
Long-Term Debt . . . . 738.3 721.1 647.2 596.9 633.4
Total Common Equity . . 717.1 677.5 634.4 587.0 532.1
Net Cash Provided By
Operating Activities. 132.2 144.8 151.8 137.9 135.3
Capital Expenditures
and Investments . . . 87.9 182.9 139.7 109.7 161.1
Ratio of Earnings to
Fixed Charges* . . . 3.22 3.24 3.45 3.08 2.96
*For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income before income taxes, extraordinary items and
cumulative effect of changes in accounting principle, plus fixed charges
(excluding capitalized interest and the portion of the preferred dividend
requirements of a subsidiary not previously deducted from pretax income,
but including amortization of amounts previously capitalized), less equity
in undistributed earnings of companies owned less than 50 percent. Fixed
charges consist of interest (including capitalized interest) on all
indebtedness, amortization of debt discount and expense, that portion of
rental expense which the Company believes to be representative of interest
and the amounts accrued to cover the preferred stock dividend requirements
of a subsidiary. A statement setting forth the computation of the unaudited
ratios of earnings to fixed charges is filed as an exhibit to the
Registration Statement of which this Prospectus Supplement is a part.
Business . . . . . . . . . . Primarily an electric and natural gas
utility.
Service Area . . . . . . . . Electric and natural gas service in a
26,000 square mile area in eastern
Washington and northern Idaho with a
population of approximately 765,000.
Natural gas service is also provided in
a 4,000 square mile area in northeast
and southwest Oregon and in the South
Lake Tahoe region of California with a
population of approximately 460,000.
Customers at Year-End** . . . Electric 290,000, Gas 224,000
Income from Operations**. . . Electricity 80%, Natural Gas 13%,
Non-Utility 7%
Total Electric Energy Sources** Hydro: Company-Owned 34%, Long-Term
Purchases 10%
Thermal: 21%
Other Purchases and Exchanges: 35%
**Twelve Months Ended December 31, 1995
S-4
RISK FACTORS
Prospective purchasers of Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following
matters.
OBLIGATIONS UNDER THE GUARANTEE AND SUBORDINATED DEBT SECURITIES ARE
UNSECURED AND SUBORDINATE TO SENIOR INDEBTEDNESS
The Company's obligations under the Guarantee are subordinate and junior
in right of payment to all liabilities of the Company. The obligations of
the Company under the Subordinated Debt Securities are subordinate and
junior in right of payment to all present and future Senior Indebtedness of
the Company and rank pari passu with obligations to or rights of the
Company's other general unsecured creditors. As of September 30, 1996,
Senior Indebtedness aggregated approximately $814 million. There are no
terms in the Securities, the Subordinated Debt Securities or the Guarantee
that limit the Company's ability to incur additional indebtedness,
including indebtedness that ranks senior to the Subordinated Debt
Securities and the Guarantee. See "Description of the Securities Guarantees
-- Status of the Securities Guarantees" and "Description of the
Subordinated Debt Securities" in the accompanying Prospectus and
"Description of the Subordinated Debt Securities -- Subordination" herein.
RIGHTS UNDER THE GUARANTEE; LIMITATION AS TO FUNDS AVAILABLE TO THE TRUST
The Guarantee will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Wilmington Trust
Company will act as indenture trustee under the Guarantee for the purposes
of compliance with the provisions of the Trust Indenture Act (the
"Guarantee Trustee"). The Guarantee Trustee will hold the Guarantee for the
benefit of the holders of the Securities.
The Guarantee guarantees to the holders of the Securities the payment of
(i) any accrued and unpaid distributions that are required to be paid on
the Securities, to the extent the Trust has funds available therefor, (ii)
the Redemption Price with respect to Securities called for redemption by
the Trust, to the extent the Trust has funds available therefor, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of
the Trust (other than in connection with the distribution of Subordinated
Debt Securities to the holders of the Securities or a redemption of all the
Securities), the lesser of (a) the aggregate of the liquidation amount and
all accrued and unpaid distributions on the Securities to the date of the
payment and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Securities in liquidation of the Trust. The
holders of a majority in liquidation amount of the Securities have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee or to direct the exercise of
any trust or power conferred upon the Guarantee Trustee under the
Guarantee. Notwithstanding the foregoing, any holder of Securities may
institute a legal proceeding directly against the Company to enforce such
holder's rights to receive payment under the Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee Trustee or
any other person or entity. If the Company were to default on its
obligation to pay amounts payable on the Subordinated Debt Securities or
otherwise, the Trust would lack available funds for the payment of
distributions or amounts payable on redemption of the Securities or
otherwise, and, in such event, holders of the Securities would not be able
to rely upon the Guarantee for payment of such amounts. In such event, the
Institutional Trustee (as defined herein), as registered holder of the
Subordinated Debt Securities, would be entitled to exercise its rights
against the Company pursuant to the terms of the Subordinated Debt
Securities, and a holder of Securities would be entitled to institute
directly a proceeding for enforcement of payment to such holder of the
principal of or interest on the Subordinated Debt Securities having a
principal amount equal to the aggregate liquidation amount of the
Securities of such holder (a "Direct Action") on or after the respective
due date specified in the Subordinated Debt Securities. See "Description of
the Securities Guarantees" and "Description of the Subordinated Debt
Securities" in the accompanying Prospectus. The Declaration provides that
each holder of Securities, by acceptance thereof, agrees to the provisions
of the Guarantee, including the subordination provisions thereof, and the
Indenture.
S-5
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Indenture Event of Default (as defined herein) has occurred
and is continuing, the Company has the right under the Indenture to defer
payments of interest on the Subordinated Debt Securities by extending the
interest payment period at any time, and from time to time, on the
Subordinated Debt Securities. As a consequence of such an extension,
_________ distributions on the Securities would be deferred (but would
continue to accrue, despite such deferral, with interest thereon compounded
_________) by the Trust during any such Extension Period. Such right to
extend the interest payment period for the Subordinated Debt Securities is
limited to a period not exceeding __ consecutive Scheduled Interest Periods
from the last Interest Payment Date (as defined herein) to which interest
was paid in full, and such period may not extend beyond the maturity of the
Subordinated Debt Securities. In the event that the Company exercises this
right to defer interest payments, the Company shall not (a) declare or pay
any dividend on, or make any distribution or liquidation payment with
respect to, or redeem or purchase any of its capital stock, (b) make any
payment of principal, premium, if any, or interest, if any, on or repay,
repurchase or redeem any debt securities (including other Subordinated Debt
Securities) issued by the Company that rank pari passu with or junior in
right of payment to the Subordinated Debt Securities or (c) make any
guarantee payments with respect to the foregoing, other than pursuant to
the Securities Guarantees (as defined in the accompanying Prospectus));
provided, however, that nothing herein shall be deemed to prohibit (i)
dividends or distributions payable in shares of the Company's capital
stock, (ii) reclassification of the Company's capital stock or exchange or
conversion of shares of one class or series of the Company's capital stock
into shares of another class or series of the Company's capital stock,
(iii) purchases or other acquisitions of fractional interests in shares of
the Company's capital stock and (iv) purchases or other acquisitions of
shares of the Company's capital stock in connection with the satisfaction
by the Company of its obligations under any direct purchase, dividend
reinvestment, customer purchase or employee benefit plans or under any
contract or security requiring the Company to purchase shares of its
capital stock. Prior to the termination of any such Extension Period, the
Company may further extend the interest payment period; provided, however,
that such Extension Period, together with all such previous and further
extensions thereof, may not exceed __ consecutive Scheduled Interest
Periods or extend beyond the maturity of the Subordinated Debt Securities.
Upon the termination of any Extension Period and the payment of all amounts
then due, the Company may commence a new Extension Period, subject to the
above requirements. See "Description of the Securities -- Distributions"
and "Description of the Subordinated Debt Securities -- Option to Extend
Interest Payment Period" herein.
Should the Company exercise its right to defer payments of interest by
extending the interest payment period, each holder of Securities would be
required to accrue income as OID in respect of such deferred interest. As a
result, each such holder of Securities would recognize income for United
States federal income tax purposes in advance of the receipt of cash and
would not receive the cash from Washington Water Power Capital if such
holder disposes of its Securities prior to the record date for the date on
which distributions of such amounts are made. The Company has no current
intention of exercising its right to defer payments of interest by
extending the interest payment period on the Subordinated Debt Securities.
However, should the Company determine to exercise such right in the future,
the market price of the Securities is likely to be affected. A holder that
disposes of its Securities during an Extension Period, therefore, might not
receive the same return on its investment as a holder that continues to
hold its Securities. In addition, as a result of the existence of the
Company's right to defer interest payments, the market price of the
Securities (which represent an undivided beneficial interest in the
Subordinated Debt Securities) may be more volatile than other securities
the holders of which do not have such rights. See "Certain United States
Federal Income Tax Considerations -- Original Issue Discount" herein.
ADVERSE EFFECT OF POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"),
the revenue portion of President Clinton's budget proposal, was released.
The Bill would, among other things, generally treat as equity an
instrument, issued by a corporation, that has a maximum term of more than
20 years and that is not shown as indebtedness on the separate balance
sheet of the issuer or, where the instrument is issued to a related party
(other than a corporation), where the holder or some other related party
issues a related instrument that is not shown as indebtedness on the
issuer's consolidated balance sheet. The above-described provision was
proposed to be effective generally for instruments issued on or after
December 7, 1995. If such provision were to apply to the Subordinated Debt
Securities, the Company would be unable to deduct interest on the
Subordinated Debt Securities. However, on March 29, 1996, the Chairmen of
the Senate Finance and House Ways and Means Committees issued a joint
statement to the effect that it was their intention that the effective date
of the President's legislative proposals, if adopted, would be no earlier
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than the date of appropriate Congressional action. There can be no
assurance, however, that current or future legislative proposals or final
legislation will not affect the ability of the Company to deduct interest
on the Subordinated Debt Securities. If legislation were enacted limiting,
in whole or in part, the deductibility by the Company of interest on the
Subordinated Debt Securities for United States federal income tax purposes,
such enactment could give rise to a Tax Event. A Tax Event would permit the
Company either to distribute the Subordinated Debt Securities to holders of
the Securities or to cause a redemption of the Securities, as described
more fully under "Description of the Securities -- Tax Event Redemption or
Distribution" herein.
TAX EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Tax Event, the Company shall have the right
either (i) to dissolve the Trust, with the result that the Subordinated
Debt Securities would be distributed to the holders of the Trust Securities
in connection with the liquidation of the Trust; or (ii) to redeem the
Subordinated Debt Securities, in whole but not in part, in lieu of a
distribution of the Subordinated Debt Securities by the Trust, in which
event the Trust will redeem the Trust Securities in whole. See
"Description of the Securities -- Tax Event Redemption or Distribution"
herein.
Under current United States federal income tax law, if the Trust is
treated as a "grantor trust" at the time of distribution, a distribution of
Subordinated Debt Securities upon the dissolution of Washington Water Power
Capital would not be a taxable event to holders of the Securities. Upon
occurrence of a Tax Event, however, a distribution of cash to holders of
the Securities upon dissolution of Washington Water Power Capital would be
a taxable event to such holders. See "Certain United States Federal Income
Tax Considerations -- Receipt of Subordinated Debt Securities or Cash Upon
Liquidation of the Trust" herein.
There can be no assurance as to the market prices for the Securities or
the Subordinated Debt Securities that may be distributed in exchange for
Securities if a dissolution or liquidation of the Trust were to occur.
Accordingly, the Securities that an investor may purchase, whether pursuant
to the offer made hereby or in the secondary market, or the Subordinated
Debt Securities that a holder of Securities may receive on dissolution and
liquidation of the Trust, may trade at a discount to the price that the
investor paid to purchase the Securities offered hereby. Because holders of
Securities may receive Subordinated Debt Securities upon the occurrence of
a Tax Event, prospective purchasers of Securities are also making an
investment decision with regard to the Subordinated Debt Securities and
should carefully review all the information regarding the Subordinated Debt
Securities contained herein and in the accompanying Prospectus. See
"Description of the Securities -- Tax Event Redemption or Distribution" and
"Description of the Subordinated Debt Securities -- General" herein.
LIMITED VOTING RIGHTS
Holders of Securities will have limited voting rights and will not be
entitled to vote to appoint, remove or replace, or to increase or decrease
the number of, the Washington Water Power Trustees (as defined herein),
which voting rights are vested exclusively in the holder of the Common
Securities. See "Description of Securities -- Voting Rights" herein.
TRADING PRICE OF SECURITIES MAY NOT REFLECT VALUE OF ACCRUED BUT UNPAID
INTEREST
The Securities may trade at a price that does not fully reflect the value
of accrued but unpaid interest with respect to the underlying Subordinated
Debt Securities. Should an Extension Period occur, a holder who disposes of
his Securities between record dates for payments of distributions thereon
would be required to include accrued but unpaid interest on the
Subordinated Debt Securities through the date of disposition in income as
ordinary income (i.e., OID), and to add such amount to his adjusted tax
basis in his pro rata share of the underlying Subordinated Debt Securities
deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which will include all accrued but unpaid
interest included in the holder's income as OID), a holder would recognize
a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal
income tax purposes. See "Certain United States Federal Income Taxation
Considerations -- Original Issue Discount" and "-- Sale, Exchange and
Redemption of the Securities" herein.
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THE WASHINGTON WATER POWER COMPANY
The Company, which was incorporated in the State of Washington in 1889,
primarily operates in the electric and natural gas utility business. As of
January 1, 1996, the Company provides electricity and natural gas in a
26,000 square mile area in eastern Washington and northern Idaho with a
population of approximately 765,000. The Company also provides natural gas
service in northeast and southwest Oregon and the South Lake Tahoe region
of California with a population of approximately 460,000. The Company has
its principal offices at 1411 East Mission Avenue, Spokane, Washington
99202. Its telephone number is 509-489-0500.
The Company's retail and wholesale businesses include the generation,
purchase, transmission, distribution and sale of electric energy plus the
purchase, transportation, distribution and sale of natural gas. In addition
to its utility businesses, the Company owns Pentzer Corporation, parent
company to the majority of the Company's non-utility businesses.
At December 31, 1995, the Company's employees included 1,390 people in
its utility operations and 1,240 people in its majority-owned non-utility
businesses. The Company's corporate headquarters are in Spokane,
Washington, which serves as the Inland Northwest's center for
manufacturing, transportation, health care, education, communication,
agricultural and service businesses.
WASHINGTON WATER POWER CAPITAL
Washington Water Power Capital is a statutory business trust formed under
Delaware law pursuant to (i) a declaration of trust, dated as of November
4, 1996, executed by the Company, as sponsor, and the trustees of
Washington Water Power Capital (the "Washington Water Power Trustees") and
(ii) the filing of a certificate of trust with the Secretary of State of
the State of Delaware on November 4, 1996. Such declaration will be amended
and restated in its entirety (as so amended and restated, the
"Declaration") substantially in the form filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and the
accompanying Prospectus form a part. The Declaration will be qualified as
an indenture under the Trust Indenture Act. Upon issuance of the
Securities, the purchasers thereof will own all of the Securities. See
"Description of the Securities -- Book-Entry Only Issuance - The Depository
Trust Company" herein. The Company will directly or indirectly acquire
Common Securities in an aggregate liquidation amount equal to 3 percent of
the total capital of Washington Water Power Capital. Washington Water Power
Capital exists for the exclusive purposes of (i) issuing the Trust
Securities representing undivided beneficial interests in the assets of the
Trust, (ii) investing the gross proceeds of the sale of the Trust
Securities in the Subordinated Debt Securities and (iii) engaging in only
those other activities necessary or incidental thereto. Accordingly, the
Subordinated Debt Securities will be the sole assets of the Trust, and
payments under the Subordinated Debt Securities will be the sole revenue of
the Trust. All of the Common Securities will be owned by the Company.
Pursuant to the Declaration, the number of Washington Water Power
Trustees will initially be three. Two of the Washington Water Power
Trustees (the "Regular Trustees") will be persons who are employees or
officers of, or who are affiliated with, the Company. The third trustee
will be a financial institution that maintains its principal place of
business in the State of Delaware and is unaffiliated with the Company,
which trustee will serve as institutional trustee under the Declaration
(the "Institutional Trustee") and as indenture trustee for the purposes of
compliance with the provisions of the Trust Indenture Act. Initially,
Wilmington Trust Company, a Delaware banking corporation, will be the
Institutional Trustee until removed or replaced by the holder of the Common
Securities. For purposes of compliance with the provisions of the Trust
Indenture Act, Wilmington Trust Company will act as Guarantee Trustee under
the Guarantee and as Debt Trustee (as defined herein) under the Indenture.
See "Description of the Securities Guarantees" in the accompanying
Prospectus and "Description of the Securities -- Voting Rights" herein.
The Institutional Trustee will hold title to the Subordinated Debt
Securities for the benefit of the holders of the Trust Securities, and the
Institutional Trustee will have the power to exercise all rights, powers
and privileges under the Indenture as the holder of the Subordinated Debt
Securities. In addition, the Institutional Trustee will maintain exclusive
control of a segregated non-interest bearing bank account (the "Property
Account") to hold all payments made in respect of the Subordinated Debt
Securities for the benefit of the holders of the Trust Securities. The
Institutional Trustee will make payments of distributions and payments on
liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Property Account. The Guarantee Trustee
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will hold the Guarantee for the benefit of the holders of the Securities.
The Company, as the direct or indirect holder of all the Common Securities,
will have the right to appoint, remove or replace any Washington Water
Power Trustee and to increase or decrease the number of the Washington
Water Power Trustees. The Company will pay all fees and expenses related to
Washington Water Power Capital and the offering of the Trust Securities.
See "Description of the Securities Guarantees -- Expense Agreements" in the
accompanying Prospectus.
The rights of the holders of the Securities, including economic rights,
rights to information and voting rights, are set forth in the Declaration,
the Delaware Business Trust Act (the "Trust Act") and the Trust Indenture
Act. See "Description of the Securities" herein.
ACCOUNTING TREATMENT
The financial statements of Washington Water Power Capital will be
consolidated into the Company's consolidated financial statements, with the
Securities shown in the Company's consolidated balance sheet as Company-
Obligated Mandatorily Redeemable Preferred Securities of Washington Water
Power Capital I. The footnotes to the Company's consolidated financial
statements will reflect that the sole asset of the Trust will be
$___________ principal amount of Subordinated Debt Securities of the
Company. See "Capitalization" herein.
CAPITALIZATION
The following table sets forth the actual capitalization of the Company
and its consolidated subsidiaries at June 30, 1996, and the "As Adjusted"
column reflects the application of the estimated net proceeds from the sale
of the Securities. See "Use of Proceeds" herein. The table should be read
in conjunction with the Company's consolidated financial statements and
notes thereto included in the documents incorporated by reference herein.
See "Incorporation of Certain Documents by Reference" in the accompanying
Prospectus.
At September 30, 1996
---------------------
Actual As Adjusted
------ -----------
(dollars in millions)
Common Stock -- 200,000,000 shares
authorized; shares outstanding:
55,960,360 . . . . . . . . . . . . $ 594.9 $
Note Receivable from Employee Stock
Ownership Plan . . . . . . . . . . (11.2)
Capital Stock Expense and Other
Paid-In Capital . . . . . . . . . . (10.1)
Unrealized Investment Gain -- Net . . 10.1
Retained Earnings . . . . . . . . . . 136.2
----- -----
Total Common Equity . . . . . . . . . 719.9
----- -----
Preferred Stock . . . . . . . . . . . 115.0
----- -----
Company-Obligated Mandatorily
Redeemable Preferred Securities of
Washington Water Power Capital I . --
Long-Term Debt . . . . . . . . . . . 727.1
----- -----
Total . . . . . . . . . . . . . . . $1,562.0 $
======== ========
(1) As described herein, the sole assets of the Trust will be the _____%
Junior Subordinated Deferrable Interest Debentures, Series A, due 20__
of the Company with a principal amount of approximately $___________,
and upon redemption of such debt, the Securities will be mandatorily
redeemable.
USE OF PROCEEDS
The Trust will use all proceeds received from the sale of the Securities
to purchase Subordinated Debt Securities from the Company. The Company
intends to use the net proceeds from the issuance and sale of the
Subordinated Debt Securities for any or all of the following purposes: (i)
to fund a portion of the Company's construction, facility improvement and
maintenance programs, (ii) to retire or exchange one or more outstanding
series of its preferred stock, bonds or notes, (iii) to reimburse the
Company's treasury for funds previously expended for these purposes and
(iv) for other general corporate purposes.
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DESCRIPTION OF THE SECURITIES
The Securities will be issued pursuant to the terms of the Declaration.
The Declaration will be qualified as an indenture under the Trust Indenture
Act. The Institutional Trustee, Wilmington Trust Company, will act as
indenture trustee for the Securities under the Declaration for purposes of
compliance with the provisions of the Trust Indenture Act. The terms of the
Securities will include those stated in the Declaration and those made part
of the Declaration by the Trust Indenture Act. The following summary of the
material terms and provisions of the Securities does not purport to be
complete and is subject to, and qualified in its entirety by reference to,
the description in the accompanying Prospectus, the Declaration (a copy of
which is filed as an exhibit to the Registration Statement of which this
Prospectus Supplement is a part), the Trust Act and the Trust Indenture
Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of the
Trust the Trust Securities, which represent undivided beneficial interests
in the assets of the Trust. All of the Common Securities will be owned,
directly or indirectly, by the Company. The Common Securities rank pari
passu, and payments will be made thereon on a pro rata basis, with the
Securities, except that upon the occurrence and during the continuance of a
Declaration Event of Default (as defined herein), the rights of the holders
of the Common Securities to receive payment of periodic distributions and
payments upon liquidation, redemption and otherwise will be subordinated to
the rights of the holders of the Securities. The Declaration does not
permit the issuance by the Trust of any securities other than the Trust
Securities or the incurrence of any indebtedness by the Trust.
Pursuant to the Declaration, the Institutional Trustee will own the
Subordinated Debt Securities purchased by the Trust for the benefit of the
holders of the Trust Securities. The payment of distributions out of money
held by the Trust and payments upon redemption of the Securities or
liquidation of the Trust, are guaranteed by the Company to the extent
described under "Description of the Securities Guarantees" in the
accompanying Prospectus. The Guarantee will be held by Wilmington Trust
Company, the Guarantee Trustee, for the benefit of the holders of the
Securities. The Guarantee does not cover payment of distributions when the
Trust does not have sufficient available funds to pay such distributions.
In such event, the remedy of a holder of Securities is to vote to direct
the Institutional Trustee to enforce the Institutional Trustee's rights
under the Subordinated Debt Securities except in the limited circumstances
in which the holder may take Direct Action. See "-- Voting Rights" and "--
Declaration Events of Default" herein.
DISTRIBUTIONS
Distributions on the Securities will be fixed at a rate of ____% per
annum of the stated liquidation amount of $___ per Security. Distributions
in arrears for more than one Scheduled Interest Period will bear interest
thereon at the rate of ____% per annum thereof compounded _________. The
term "distribution" as used herein includes any such interest payable
unless otherwise stated. The amount of distributions payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Securities will be cumulative, will accrue from
______, 199_ and will be payable _________ in arrears on ___________ of
each year, commencing ________ __, 199_, when, as and if available for
payment, by the Institutional Trustee, except as otherwise described below.
So long as no Indenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer payments of interest
on the Subordinated Debt Securities by extending the interest payment
period at any time, and from time to time on the Subordinated Debt
Securities. As a consequence of such an extension, _________ distributions
on the Securities would be deferred (but would continue to accrue, despite
such deferral, with interest thereon compounded _________) by the Trust
during any such Extension Period. Such right to extend the interest payment
period for the Subordinated Debt Securities is limited to a period not
exceeding __ consecutive Scheduled Interest Periods and such period may not
extend beyond the maturity of the Subordinated Debt Securities. In the
event that the Company exercises this right to defer interest payments, the
Company shall not (a) declare or pay any dividend on, or make any
distribution or liquidation payment with respect to, or redeem or purchase
any of its capital stock, (b) make any payment of principal, premium, if
any, or interest, if any, on or repay, repurchase or redeem any debt
securities (including other Subordinated Debt Securities) issued by the
Company that rank pari passu with or junior in right of payment to the
Subordinated Debt Securities or (c) make any guarantee payments with
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respect to the foregoing, other than pursuant to the Securities
Guarantees); provided, however, that nothing herein shall be deemed to
prohibit (i) dividends or distributions payable in shares of the Company's
capital stock, (ii) reclassification of the Company's capital stock or
exchange or conversion of shares of one class or series of the Company's
capital stock into shares of another class or series of the Company's
capital stock, (iii) purchases or other acquisitions of fractional
interests in shares of the Company's capital stock and (iv) purchases or
other acquisitions of shares of the Company's capital stock in connection
with the satisfaction by the Company of its obligations under any direct
purchase, dividend reinvestment, customer purchase or employee benefit
plans or under any contract or security requiring the Company to purchase
shares of its capital stock. Prior to the termination of any such Extension
Period, the Company may further extend the interest payment period;
provided, however, that such Extension Period, together with all such
previous and further extensions thereof, may not exceed __ consecutive
Scheduled Interest Periods or extend beyond the maturity of the
Subordinated Debt Securities. Upon the termination of any Extension Period
and the payment of all amounts then due, the Company may commence a new
Extension Period, subject to the above requirements. See "Description of
the Subordinated Debt Securities -- Option to Extend Interest Payment
Period" herein. If distributions are deferred, the deferred distributions
and accrued interest thereon shall be paid to holders of record of the
Securities as they appear on the books and records of the Trust on the
record date next following the termination of such deferral period.
Distributions on the Securities must be paid on the dates payable to the
extent that the Trust has in the Property Account funds available for the
payment of such distributions. The Trust's funds available for distribution
to the holders of the Securities will be limited to payments received from
the Company on the Subordinated Debt Securities. The payment of
distributions out of moneys held by the Trust is guaranteed by the Company
to the extent set forth under "Description of the Securities Guarantees" in
the accompanying Prospectus.
Distributions on the Securities will be payable to the holders thereof as
they appear on the books and records of the Trust on the relevant record
dates. Such distributions will be paid through the Institutional Trustee
who will hold amounts received in respect of the Subordinated Debt
Securities in the Property Account for the benefit of the holders of the
Trust Securities. The Regular Trustees shall have the right to select
relevant record dates, which shall be at least one Business Day (as defined
below) but less than 50 Business Days before the relevant payment dates. In
the event that any date on which distributions are to be made on the
Securities is not a Business Day, then payment of the distributions payable
on such date will be made on the next succeeding Business Day, except that,
if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such payment date. A "Business Day"
shall mean any day other than Saturday, Sunday or any other day on which
banking institutions in the City of Wilmington, Delaware and The City of
New York are authorized or required by any applicable law to remain closed.
REDEMPTION
The Subordinated Debt Securities will mature on ________ __, 20__ and may
be redeemed, in whole or in part, at any time on or after ________ __,
20__, or, in whole but not in part, at any time in certain circumstances
upon the occurrence of a Tax Event. Upon the repayment of the Subordinated
Debt Securities, whether at maturity or upon redemption, the proceeds from
such repayment shall simultaneously be applied to redeem Trust Securities
having an aggregate liquidation amount equal to the aggregate principal
amount of the Subordinated Debt Securities so repaid or redeemed at the
Redemption Price; provided, however, that holders of Trust Securities shall
be given not less than 30 nor more than 60 days' notice of such redemption.
Redemptions of the Securities shall be made and the Redemption Price shall
be payable on the redemption date only to the extent that the Trust has
funds on hand available for the payment of such Redemption Price. See
"Description of the Subordinated Debt Securities -- Redemption" in the
accompanying Prospectus. In the event that fewer than all of the
outstanding Securities are to be redeemed, the Securities will be redeemed
pro rata as described under "-- Redemption Procedures" below.
TAX EVENT REDEMPTION OR DISTRIBUTION
"Tax Event" means the receipt by the Company of an opinion of counsel to
the effect that, as a result of (a) any amendment to, clarification of or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein, (b) any judicial decision, official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or any amendment to,
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clarification of, or change in the official position or the interpretation
of such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative
body, court, governmental agency or regulatory authority, irrespective of
the manner in which such amendment, clarification or change is made known,
which amendment, clarification or change is effective or such pronouncement
or decision is announced, in each case, on or after the date of the
original issuance of the Subordinated Debt Securities (including the
enactment of any legislation and the publication of any judicial decision
or regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the
date of such amendment, clarification or change, subject to United States
federal income tax with respect to income accrued or received on the
Subordinated Debt Securities, (ii) the Trust is, or will be within 90 days
of the date of such amendment, clarification or change, subject to more
than a de minimis amount of taxes, duties or other governmental charges or
(iii) interest payable on the Subordinated Debt Securities is not, or
within 90 days of the date of such amendment, clarification or change will
not be, deductible, in whole or in part, by the Company for United States
federal income tax purposes.
If, at any time, a Tax Event shall occur and be continuing, the Company
may, at its option, within 90 days following the occurrence of such Tax
Event, (i) dissolve the Trust with the result that the Subordinated Debt
Securities with an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the distribution
rate of, and accrued and unpaid interest equal to accrued and unpaid
distributions on, and having the same record date for payment as the Trust
Securities, would be distributed to the holders of the Trust Securities in
liquidation of such holders' interests in the Trust on a pro rata basis, or
(ii) upon not less than 30 nor more than 60 days' notice, redeem the
Subordinated Debt Securities, in whole but not in part, for cash, and,
following such redemption, redeem the Trust Securities at the Redemption
Price; provided, however, that if at the time there is available to the
Company or the Trust the opportunity to eliminate, within such 90-day
period, the Tax Event, by taking some ministerial action such as filing a
form or making an election or pursuing some other similar reasonable
measure that has no adverse effect on the Trust, the Company or the holders
of the Trust Securities, the Company or the Trust will pursue such measure
in lieu of such dissolution and distribution or redemption.
If the Subordinated Debt Securities are distributed to the holders of the
Securities upon termination of the Trust in accordance with the
Declaration, the Company will use all reasonable efforts to cause the
Subordinated Debt Securities to be listed on the NYSE or on such other
securities exchange as the Securities are then listed.
After the date for any distribution of Subordinated Debt Securities upon
dissolution of the Trust, (i) the Securities will be deemed to no longer be
outstanding and (ii) any certificates representing Securities will be
deemed to represent Subordinated Debt Securities having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with
an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accrued and unpaid distributions on, and having
the same record date for payment as such Securities until such certificates
are presented to the Company or its agent for transfer or reissuance.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Securities
unless all accrued and unpaid distributions have been paid on all
Securities for all _________ distribution periods terminating on or prior
to the date of redemption.
If the Trust gives a notice of redemption in respect of Securities, then,
provided that the Company has paid to the Institutional Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Subordinated Debt Securities, upon presentation of the
Securities, the Institutional Trustee will pay the relevant Redemption
Price to the holder or holders of such Securities. See "-- Book-Entry Only
Issuance - The Depository Trust Company" for a more complete discussion of
payment mechanics applicable so long as the Securities are held in book-
entry form. If notice of redemption shall have been given and funds
deposited as required, then, immediately prior to the close of business on
the date of such deposit, distributions will cease to accrue and all rights
of holders of such Securities so called for redemption will cease, except
the right of the holders of such Securities to receive the Redemption Price
but without interest on such Redemption Price. In the event that any date
fixed for redemption of Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day, except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such redemption date. In the event that payment of the
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Redemption Price in respect of Securities is improperly withheld or refused
and not paid either by the Trust, or by the Company pursuant to the
Guarantee, distributions on such Securities will continue to accrue at the
then applicable rate from the original redemption date to the date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Securities are to be
redeemed, the Securities will be redeemed pro rata. The particular
Securities to be redeemed shall be selected on a pro rata basis not more
than 60 days prior to the redemption date by the Institutional Trustee from
the outstanding Securities not previously called for redemption, by such
method as the Institutional Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to
$___ or an integral multiple of $___ in excess thereof) of the liquidation
amount of Securities of a denomination larger than $___. The Institutional
Trustee shall notify the transfer agent and registrar in writing of the
Securities selected for redemption, and in the case of any Securities
selected for partial redemption, the liquidation amount thereof to be
redeemed. For all purposes of the Declaration, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only
in part, or to the portion of the aggregate liquidation amount of
Securities which has been or is to be redeemed.
Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
subsidiaries may at any time, and from time to time, purchase outstanding
Securities by tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the then
holders of the Securities will be entitled to receive out of the assets of
the Trust, after satisfaction of liabilities to creditors, distributions in
an amount equal to the aggregate of the stated liquidation amount of $___
per Security plus accrued and unpaid distributions thereon to the date of
payment (the "Liquidation Distribution"), unless, in connection with such
Liquidation, Subordinated Debt Securities in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, and having the same
record date for payment as the Securities, have been distributed on a pro
rata basis to the holders of the Securities in exchange for such
Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a pro rata basis.
Pursuant to the Declaration, the Trust shall terminate (i) on
___________, 20__, the expiration of the term of the Trust, (ii) upon the
bankruptcy of the Company, (iii) upon the filing of a certificate of
dissolution or its equivalent with respect to the Company, the filing of a
certificate of cancellation with respect to the Trust after obtaining the
consent of the holders of at least a majority in liquidation amount of the
Trust Securities affected thereby voting together as a single class to file
such certificate of cancellation, or the revocation of the charter of the
Company and the expiration of 90 days after the date of revocation without
a reinstatement thereof, (iv) upon the distribution of Subordinated Debt
Securities in connection with the occurrence of a Tax Event, (v) upon the
entry of a decree of a judicial dissolution of the Company or the Trust, or
(vi) upon the redemption of all the Trust Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the
Trust Securities (a "Declaration Event of Default"); provided, however,
that pursuant to the Declaration, the holder of the Common Securities will
be deemed to have waived any Declaration Event of Default with respect to
the Common Securities until all Declaration Events of Default with respect
to the Securities have been cured, waived or otherwise eliminated. Until
such Declaration Events of Default with respect to the Securities have been
so cured, waived or otherwise eliminated, the Institutional Trustee will be
deemed to be acting solely on behalf of the holders of the Securities and
only the holders of the Securities will have the right to direct the
Institutional Trustee with respect to certain matters under the
Declaration, and therefore the Indenture.
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If a Declaration Event of Default occurs and is continuing, the
Institutional Trustee will have the right to enforce its rights against the
Company as a holder of the Subordinated Debt Securities. In addition, the
holders of a majority in liquidation amount of the Securities will have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the Institutional Trustee or to direct the exercise
of any trust or power conferred upon the Institutional Trustee under the
Declaration, including the right to direct the Institutional Trustee to
exercise the remedies available to it as a holder of the Subordinated Debt
Securities. If the Institutional Trustee fails to enforce its rights under
the Subordinated Debt Securities after a holder of Securities has made a
written request, such holder of record of Securities may institute a legal
proceeding against the Company to enforce the Institutional Trustee's
rights under the Subordinated Debt Securities without first instituting any
legal proceeding against the Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, if a Declaration Event of Default
has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Subordinated
Debt Securities on the date such interest or principal is otherwise payable
(or in the case of redemption, the redemption date), then a holder of
Securities may directly institute a proceeding for enforcement of payment
to such holder directly of the principal of or interest on the Subordinated
Debt Securities having a principal amount equal to the aggregate
liquidation amount of the Securities of such holder on or after the
respective due date specified in the Subordinated Debt Securities. In
connection with such Direct Action, the Company will be subrogated to the
rights of such holder of Securities under the Declaration to the extent of
any payment made by the Company to such holder of Securities in such Direct
Action. The holders of Securities will not be able to exercise directly any
other remedy available to the holders of the Subordinated Debt Securities.
Upon the occurrence of a Declaration Event of Default, the Institutional
Trustee, as the sole holder of the Subordinated Debt Securities, will have
the right under the Indenture to declare the principal of and interest on
the Subordinated Debt Securities to be immediately due and payable. The
Company and the Trust are each required to file annually with the
Institutional Trustee an officer's certificate as to its compliance with
all conditions and covenants under the Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act
and under "Description of the Securities Guarantees -- Modification of the
Securities Guarantees; Assignment" in the accompanying Prospectus, and as
otherwise required by law and the Declaration, the holders of the
Securities will have no voting rights.
Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration including the right to direct
the Institutional Trustee, as holder of the Subordinated Debt Securities,
to (i) exercise the remedies available to it under the Indenture as a
holder of the Subordinated Debt Securities, (ii) waive any past Indenture
Event of Default that is waivable under the Original Indenture (as defined
herein), (iii) exercise any right to rescind or annul a declaration that
the principal of all the Subordinated Debt Securities shall be due and
payable or (iv) consent to any amendment, modification or termination of
the Indenture or the Subordinated Debt Securities where such consent shall
be required. If the Institutional Trustee fails to enforce its rights under
the Subordinated Debt Securities after a holder of record of Securities has
made a written request, such holder of record of Securities may institute a
legal proceeding directly against the Company to enforce the Institutional
Trustee's rights under the Subordinated Debt Securities, to the fullest
extent permitted by law, without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of
the Company to pay interest or principal on the Subordinated Debt
Securities on the date such interest or principal is otherwise payable (or
in the case of redemption on the redemption date), then a holder of
Securities may, to the fullest extent permitted by law, directly institute
a proceeding for enforcement of payment to such holder of the principal of
or interest on the Subordinated Debt Securities having a principal amount
equal to the aggregate liquidation amount of the Securities of such holder
on or after the respective due date specified in the Subordinated Debt
Securities. The Institutional Trustee shall notify all holders of the
Securities of any notice of default received from the Debt Trustee with
respect to the Subordinated Debt Securities. Such notice shall state that
such Indenture Event of Default also constitutes a Declaration Event of
Default. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Institutional Trustee shall not
take any of the actions described in clause (i), (ii) or (iii) above unless
the Institutional Trustee has obtained an opinion of tax counsel to the
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effect that, as a result of such action, the Trust will not be treated as
an association taxable as a corporation for United States federal income
tax purposes.
In the event the consent of the Institutional Trustee, as the holder of
the Subordinated Debt Securities, is required under the Indenture with
respect to any amendment, modification or termination of the Indenture, the
Institutional Trustee shall request the direction of the holders of the
Trust Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a majority in liquidation amount of the Trust
Securities voting together as a single class. The Institutional Trustee
shall not take any such action in accordance with the directions of the
holders of the Trust Securities unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be treated as an
association taxable as a corporation.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Securities may be given
at a separate meeting of holders of Securities convened for such purpose,
at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Securities. Each such notice will
include a statement setting forth the following information: (i) the date
of such meeting or the date by which such action is to be taken; (ii) a
description of any resolution proposed for adoption at such meeting on
which such holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of
proxies or consents. No vote or consent of the holders of Securities will
be required for the Trust to redeem and cancel Securities or distribute
Subordinated Debt Securities in accordance with the Declaration.
Notwithstanding that holders of Securities are entitled to vote or
consent under any of the circumstances described above, any of the
Securities that are owned at such time by the Company or any entity
directly or indirectly controlling or controlled by, or under direct or
indirect common control with, the Company, shall not be entitled to vote or
consent and shall, for purposes of such vote or consent, be treated as if
such Securities were not outstanding.
Holders of the Securities will have no rights to appoint or remove the
Washington Water Power Trustees, who may be appointed, removed or replaced
solely by the Company as the indirect or direct holder of all of the Common
Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee),
provided, however, that if any proposed amendment provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Trust
Securities in any material respect, whether by way of amendment to the
Declaration or otherwise or (ii) the dissolution, winding-up or termination
of the Trust other than pursuant to the terms of the Declaration, then the
holders of the Trust Securities voting together as a single class will be
entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of at least a
majority in liquidation amount of the Trust Securities affected thereby;
provided, however, that if any amendment or proposal referred to in clause
(i) above would so adversely affect only the Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a majority in liquidation amount of such class
of Securities.
Notwithstanding the foregoing, no amendment or modification may be made
to the Declaration if such amendment or modification would (i) cause the
Trust to be classified for purposes of United States federal income
taxation as an association taxable as a corporation, (ii) reduce or
otherwise adversely affect the powers of the Institutional Trustee or (iii)
cause the Trust to be deemed an "investment company" which is required to
be registered under the Investment Company Act of 1940, as amended (the
"1940 Act").
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MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except as
described below. The Trust may, with the consent of the Regular Trustees
and without the consent of the holders of the Trust Securities, the
Institutional Trustee or the Delaware Trustee, merge, consolidate or
amalgamate with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety, to a trust
organized as such under the laws of any State of the United States;
provided, however, that (i) if the Trust is not the survivor such successor
entity either (x) expressly assumes all of the obligations of the Trust
under the Trust Securities or (y) substitutes for the Securities other
securities having substantially the same terms as the Securities (the
"Successor Securities"), so long as the Successor Securities rank the same
as the Trust Securities rank with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Company expressly
appoints a trustee of such successor entity possessing the same powers and
duties as the Institutional Trustee as the holder of the Subordinated Debt
Securities, (iii) the Securities or any Successor Securities are listed, or
any Successor Securities will be listed upon notification of issuance, on
any national securities exchange or with another organization on which the
Securities are then listed or quoted, if any, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization,
(v) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Trust Securities (including any Successor
Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (vi) such successor
entity has a purpose identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Company has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that, (A) such merger, consolidation, amalgamation, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the
holders' interest in the new entity), and (B) following such merger,
consolidation, amalgamation or replacement, conveyance, transfer or lease,
neither the Trust nor such successor entity will be required to register as
an investment company under the 1940 Act and (viii) the Company or any
permitted successor guarantees the obligations of such successor entity
under the Successor Securities at least to the extent provided by the
Guarantee. Notwithstanding the foregoing, the Trust shall not, except with
the consent of holders of 100% in liquidation amount of the Trust
Securities, merge, consolidate or amalgamate with or into, or be replaced
by, or convey, transfer or lease its properties and assets substantially as
an entirety to, any other entity or permit any other entity to merge,
consolidate or amalgamate with or into, or replace it, if such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease
would cause the Trust or the Successor Entity to be treated as an
association taxable as a corporation for United States federal income tax
purposes.
BOOK-ENTRY ONLY ISSUANCE - THE DEPOSITORY TRUST COMPANY
DTC will act as securities depositary for the Securities. The Securities
will be issued only as fully-registered securities registered in the name
of Cede & Co. (DTC's nominee). One or more fully-registered global
Securities certificates, representing the total aggregate number of
Securities, will be issued and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the Securities Exchange Act of 1934, as amended. DTC holds securities that
its participants ("Participants") deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates.
"Direct Participants" in DTC include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. DTC
is owned by a number of its Direct Participants and by the NYSE, the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others, such as
securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a custodial relationship with a Direct
Participant either directly or indirectly ("Indirect Participants"). The
rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
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Purchases of Securities within the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each
Security ("Beneficial Owner") is in turn to be recorded on the Indirect
Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected
to receive written confirmation providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners entered into the
transaction. Transfers of ownership interests in the Securities are to be
accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in the Securities, except in the
event that use of the book-entry system for the Securities is discontinued.
To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the
Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Securities are credited, which may or
may not be the Beneficial Owners. The Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Securities are being redeemed, DTC's practice is to determine by lot the
amount of the interest of each Direct Participant to be redeemed.
Neither DTC nor Cede & Co. will itself consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Trust as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Securities are credited on the record date (identified
in a listing attached to the Omnibus Proxy).
Distributions on the Securities will be made to DTC. DTC's practice is to
credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on such payment
date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such Participants and
not of DTC, the Trust or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
distributions to DTC is the responsibility of the Trust, disbursement of
such payments to Direct Participants shall be the responsibility of DTC,
and disbursement of such payments to the Beneficial Owners is the
responsibility of Direct Participants and Indirect Participants.
DTC may discontinue providing its services as securities depositary with
respect to the Securities at any time by giving notice to the Trust. Under
such circumstances, in the event that a successor securities depositary is
not obtained, Security certificates are required to be printed and
delivered. Additionally, the Trust (with the consent of the Company) may
decide to discontinue use of the system of book-entry transfers through DTC
(or a successor depositary). In that event, certificates for the Securities
will be printed and delivered.
The above information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Trust and the Company
believe to be reliable, but the Trust and the Issuer take no responsibility
for the accuracy thereof.
Except as provided herein, a Beneficial Owner of an interest in a global
Securities certificate will not be entitled to receive physical delivery of
Securities. Accordingly, each Beneficial Owner must rely on the procedures
of DTC to exercise any rights under the Securities.
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REGISTRAR, TRANSFER AGENT AND PAYING AGENT
Payments in respect of the Securities shall be made by check mailed to
the address of the holder or holders entitled thereto as such address shall
appear on the books and records of the Trust on the record date. See "--
Book-Entry Only Issuance - The Depository Trust Company" for a more
complete discussion of payment mechanics applicable so long as the
Securities are held in book-entry form. The paying agent shall initially
be Wilmington Trust Company. The paying agent shall be permitted to resign
as paying agent upon 30 days' written notice to the Regular Trustees. In
the event that Wilmington Trust Company shall no longer be the paying
agent, the Regular Trustees shall appoint a successor to act as paying
agent (which shall be a bank or trust company).
Wilmington Trust Company will act as registrar and transfer agent for the
Securities.
Registration of transfers of Securities will be effected without charge
by or on behalf of the Trust, but upon payment (with the giving of such
indemnity as the Trust or the Company may reasonably require) in respect of
any documentary stamp tax or other similar governmental charges which may
be imposed in relation to it.
The Trust will not be required to register or cause to be registered the
transfer of Securities after such Securities have been called for
redemption.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a default with
respect to the Trust Securities and after the curing of any defaults that
may have occurred, undertakes to perform only such duties as are
specifically set forth in the Declaration and, after such default, shall
exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provisions, the
Institutional Trustee is under no obligation to exercise any of the powers
vested in it by the Declaration at the request of any holder of Securities,
unless offered reasonable indemnity by such holder against the costs,
expenses and liabilities which might be incurred thereby; provided,
however, that upon the occurrence of a Declaration Event of Default, no
such provisions shall be taken to relieve the Institutional Trustee of its
obligation to exercise its rights and powers under the Declaration. The
Institutional Trustee also serves as trustee under the Guarantee and the
Indenture.
GOVERNING LAW
The Declaration and the Securities will be governed by and construed in
accordance with the laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust in
such a way so that the Trust will not be required to register as an
"investment company" under the 1940 Act or treated as an association
taxable as a corporation for United States federal income tax purposes. The
Company is authorized and directed to conduct its affairs so that the
Subordinated Debt Securities will be treated as indebtedness of the Company
for United States federal income tax purposes. In this connection, the
Company and the Regular Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of the Trust or
the certificate of incorporation of the Company, that each of the Company
and the Regular Trustees determine in their discretion to be necessary or
desirable to achieve such end, as long as such action does not materially
adversely affect the interests of the holders of the Securities or vary the
terms thereof.
Holders of the Securities have no preemptive rights.
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Set forth below is a description of the specific terms of the
Subordinated Debt Securities in which the Trust will invest the proceeds
from the issuance and sale of the Trust Securities. This description
supplements the description of the general terms and provisions of the
Subordinated Debt Securities set forth in the accompanying Prospectus under
the caption "Description of the Subordinated Debt Securities." The
following description does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, the description in the
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accompanying Prospectus and the Indenture, dated as of ______ 1, 199_ (the
"Original Indenture"), between the Company and Wilmington Trust Company, as
Trustee (the "Debt Trustee"), (the Original Indenture, as amended and
supplemented from time to time, is hereinafter referred to as the
"Indenture"), the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus Supplement and the accompanying
Prospectus form a part. Certain capitalized terms used herein are defined
in the Indenture.
Under certain circumstances involving the dissolution of the Trust
following the occurrence of a Tax Event, Subordinated Debt Securities may
be distributed to the holders of the Trust Securities in liquidation of the
Trust. See "Description of the Securities -- Tax Event Redemption or
Distribution" herein.
If the Subordinated Debt Securities are distributed to the holders of the
Securities upon termination of the Trust in accordance with the
Declaration, the Company will use all reasonable efforts to have the
Subordinated Debt Securities listed on the NYSE or on such other national
securities exchange or similar organization on which the Securities are
then listed or quoted.
GENERAL
Concurrently with the issuance of the Securities, the Trust will invest
the proceeds thereof and the consideration paid by the Company for the
Common Securities in the Subordinated Debt Securities issued by the
Company. The Subordinated Debt Securities will bear interest at the rate of
__% per annum of the principal amount thereof, payable _________ in arrears
on ____________ of each year (each, an "Interest Payment Date"), commencing
________ __, 199_, to the persons in whose names the Subordinated Debt
Securities are registered, subject to certain exceptions, as of the close
of business on the Regular Record Date next preceding such Interest Payment
Date. Each Subordinated Debt Security will be held in the name of the
Institutional Trustee in trust for the benefit of the holders of the
Securities. The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. In the event that
any date on which interest is payable on the Subordinated Debt Securities
is not a Business Day, then payment of the interest payable on such date
will be made on the next succeeding Business Day, except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally
payable. Interest that is in arrears for more than one Scheduled Interest
Period will bear additional interest on the amount thereof, to the extent
permitted by law, at the rate of __% per annum thereof, compounded
_________. The term "interest" as used herein shall include _________
interest payments, interest on _________ interest payments in arrears and
Additional Interest (as defined below), as applicable.
The Company will covenant, that, if at any time while the Institutional
Trustee under the Declaration is the holder of the Subordinated Debt
Securities, Washington Water Power Trust or the Institutional Trustee shall
be required to pay any taxes, duties, assessments or governmental charges
of whatever nature (other than withholding taxes) imposed by the United
States, or any other taxing authority, then, in any such case, the Company
will pay as additional interest ("Additional Interest") on the Subordinated
Debt Securities such additional amounts as shall be required so that the
net amounts received and retained by Washington Water Power Trust and the
Institutional Trustee after paying such taxes, duties, assessments or other
governmental charges will be equal to the amounts Washington Water Power
Trust and the Institutional Trustee would have received had no such taxes,
duties, assessments or other governmental charges been imposed.
The Subordinated Debt Securities will be issued as a series of
Subordinated Debt Securities under the Indenture. The Subordinated Debt
Securities will mature on ________ __, 20__. The Subordinated Debt
Securities will be unsecured and will rank junior and be subordinate in
right of payment to all Senior Indebtedness of the Company. The Indenture
does not limit the incurrence or issuance of other secured or unsecured
debt of the Company, whether under the Indenture, any other indenture that
the Company may enter into in the future or otherwise. See "Description of
the Subordinated Debt Securities -- Subordination" in the accompanying
Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Indenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture at any time, and from time to
time, to extend the interest payment period on the Subordinated Debt
Securities to a period not exceeding __ consecutive Scheduled Interest
Periods from the last Interest Payment Date to which interest was paid in
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full, and such period may not extend beyond the maturity of the
Subordinated Debt Securities. In the event that the Company exercises this
right to defer interest payments, the Company shall not (a) declare or pay
any dividend on, or make any distribution or liquidation payment with
respect to, or redeem or purchase any of its capital stock, (b) make any
payment of principal, premium, if any, or interest, if any, on or repay,
repurchase or redeem any debt securities (including other Subordinated Debt
Securities) issued by the Company that rank pari passu with or junior in
right of payment to the Subordinated Debt Securities or (c) make any
guarantee payments with respect to the foregoing, other than pursuant to
the Securities Guarantees); provided, however, that nothing herein shall be
deemed to prohibit (i) dividends or distributions payable in shares of the
Company's capital stock, (ii) reclassification of the Company's capital
stock or exchange or conversion of shares of one class or series of the
Company's capital stock into shares of another class or series of the
Company's capital stock, (iii) purchases or other acquisitions of
fractional interests in shares of the Company's capital stock and (iv)
purchases or other acquisitions of shares of the Company's capital stock in
connection with the satisfaction by the Company of its obligations under
any direct purchase, dividend reinvestment, customer purchase or employee
benefit plans or under any contract or security requiring the Company to
purchase shares of its capital stock. Prior to the termination of any such
Extension Period, the Company may further extend the interest payment
period; provided, however, that such Extension Period, together with all
such previous and further extensions thereof, may not exceed __ consecutive
Scheduled Interest Periods or extend beyond the Stated Maturity of the
Subordinated Debt Securities. Upon the termination of an Extension Period
and the payment of all amounts then due, the Company may commence a new
Extension Period, subject to the above requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof. The
Company must give the Institutional Trustee, the Regular Trustees and the
Debt Trustee written notice of (i) any election by the Company to initiate
an Extension Period and the duration thereof, (ii) any election by the
Company to extend an Extension Period beyond the date on which that
Extension Period is then scheduled to terminate and the duration of such
extension and (iii) any election by the Company to make a full payment of
interest accrued on the Subordinated Debt Securities on any date during an
Extension Period and the amount of such payment. The Company shall give
such notice of any election described in clause (i) or (ii) in the next
preceding sentence not less than 10 days prior to the Regular Record Date
with respect to the next Interest Payment Date on which interest on the
Subordinated Debt Securities would otherwise be payable; and the Company
shall give such notice of any election described in clause (iii) in the
next preceding sentence in accordance with the provisions of the Indenture
relating to Unpaid Interest. A Regular Trustee shall give prompt written
notice of the Company's election to begin such Extension Period to the
holders of the Securities.
At the end of such Extension Period, the Company must pay all interest
then accrued and unpaid (together with interest thereon at the rate of __%
per annum to the extent permitted by applicable law). During an Extension
Period, interest will continue to accrue and holders of Subordinated Debt
Securities will be required to accrue interest income for United States
federal income tax purposes. See "Certain United States Federal Income Tax
Considerations -- Original Issue Discount" herein.
REGISTRATION AND TRANSFER
The Subordinated Debt Securities are to be initially registered in the
name of Wilmington Trust Company, as Institutional Trustee of Washington
Water Power Trust. The Subordinated Debt Securities shall not be
transferable, nor shall any purported transfer be registered, except (i) to
a nominee of such Institutional Trustee, to such Institutional Trustee by
such nominee, by such Institutional Trustee to another nominee, by any such
nominee to a successor nominee or by such Institutional Trustee or any
nominee thereof to a successor Institutional Trustee or a nominee thereof
or (ii) to the holders of Trust Securities in the event of the termination
of Washington Water Power Trust in accordance with the provisions of the
Declaration. No service charge shall be made for the registration of
transfer of exchange of Subordinated Debt Securities; provided, however,
that, after any distribution of the Subordinated Debt Securities
contemplated in clause (ii) above, the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection with the exchange or transfer.
REDEMPTION
The Subordinated Debt Securities are subject to redemption (i) at any
time on or after ________ __, 20__, in whole or in part, at the election of
the Company, at a redemption price equal to 100% of the principal amount
thereof plus accrued interest, if any (including Additional Interest, if
any), to the date fixed for redemption; provided, however, that the
Subordinated Debt Securities will not be so redeemable in part unless all
interest (including Additional Interest) accrued through the most recent
_________ period ended on or prior to the date fixed for redemption shall
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have been paid, or (ii) in whole but not in part, at the election of the
Company, on any date within 90 days of the occurrence, and during the
continuation, of a Tax Event at a redemption price equal to ___% of the
principal amount thereof plus accrued interest, if any (including
Additional Interest, if any) to the date fixed for redemption.
DISTRIBUTION OF SUBORDINATED DEBT SECURITIES
Upon the occurrence of a Tax Event, at any time, the Company has the
right to terminate the Trust, and, in such event, Subordinated Debt
Securities will be distributed to the holders of the Securities in
liquidation of the Trust after satisfaction of liabilities to creditors of
the Trust as provided by applicable law. If distributed to holders of
Securities in liquidation, the Subordinated Debt Securities will initially
be issued in the form of one or more global securities and DTC, or any
successor depositary for the Securities, will act as depositary for the
Subordinated Debt Securities. It is anticipated that the depositary
arrangements for the Subordinated Debt Securities would be substantially
identical to those in effect for the Securities. If the Subordinated Debt
Securities are distributed to the holders of the Securities upon
termination of the Trust in accordance with the Declaration, the Company
will use all reasonable efforts to cause the Subordinated Debt Securities
to be listed on the NYSE or on such other securities exchanges as the
Securities are then listed. There can be no assurance as to the market
price of any Subordinated Debt Securities that may be distributed to the
holders of Securities.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes the principal United States federal
income tax consequences relevant to the purchase, ownership and disposition
of the Securities as of the date hereof and represents the opinion of Reid
& Priest LLP, counsel to the Company, insofar as it relates to matters of
law or legal conclusions. Except where noted, it deals only with Securities
held as capital assets and does not deal with special situations, such as
those of dealers in securities or currencies, financial institutions, life
insurance companies, tax-exempt organizations, persons holding Securities
as part of a hedging or conversion transaction or a straddle, United States
Holders (as defined herein) whose "functional currency" is not the United
States dollar, or persons who are not United States Holders. In addition,
this discussion does not address the tax consequences to persons who
purchase Securities other than pursuant to their initial issuance and
distribution. Furthermore, the discussion below is based upon the
provisions of the Internal Revenue Code of 1986, as amended, and
regulations, rulings and judicial decisions thereunder as of the date
hereof, and such authorities may be repealed, revoked or modified at any
time, possibly retroactively, so as to result in United States federal
income tax consequences different from those discussed below. These
authorities are subject to various interpretations and it is therefore
possible that the United States federal income tax treatment of the
Securities may differ from the treatment described below.
PROSPECTIVE PURCHASERS OF SECURITIES, INCLUDING PERSONS WHO ARE NOT
UNITED STATES HOLDERS AND PERSONS WHO PURCHASE SECURITIES IN THE SECONDARY
MARKET, ARE ADVISED TO CONSULT WITH THEIR TAX ADVISORS AS TO THE UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS
WELL AS THE EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS.
UNITED STATES HOLDERS
As used herein, a "United States Holder" means a Security holder that is
a citizen or a resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the United States
or any political subdivision thereof, or an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source.
CLASSIFICATION OF THE TRUST
Reid & Priest LLP, counsel to the Company and the Trust, is of the
opinion that, under current law and assuming full compliance with the terms
of the Indenture and the instruments establishing the Trust (and certain
other documents), the Trust will be classified as a "grantor trust" for
United States federal income tax purposes and will not be classified as an
association taxable as a corporation. Each United States Holder will be
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treated as owning an undivided beneficial interest in the Subordinated Debt
Securities. Investors should be aware that the opinion of Reid & Priest LLP
is not binding on the Internal Revenue Services (the "IRS") or the courts.
CLASSIFICATION OF THE SUBORDINATED DEBT SECURITIES
Based on the advice of its counsel, the Company believes and intends to
take the position that the Subordinated Debt Securities will constitute
indebtedness for United States federal income tax purposes. No assurance
can be given that such position will not be challenged by the IRS, or that
any such challenge will not be successful. By purchasing and accepting
Securities, each holder thereof covenants to treat the Subordinated Debt
Securities as indebtedness and the Securities as evidence of an indirect
beneficial ownership in the Subordinated Debt Securities. The remainder of
this discussion, except as is expressly indicated to the contrary, assumes
that the Subordinated Debt Securities will be classified as indebtedness of
the Company for United States federal income tax purposes.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"),
the revenue portion of President Clinton's budget proposal, was released.
The Bill would, among other things, generally treat as equity an
instrument, issued by a corporation, that has a maximum term of more than
20 years and that is not shown as indebtedness on the separate balance
sheet of the issuer or, where the instrument is issued to a related party
(other than a corporation), where the holder or some other related party
issues a related instrument that is not shown as indebtedness on the
issuer's consolidated balance sheet. The above-described provision was
proposed to be effective generally for instruments issued on or after
December 7, 1995. If such provision were to apply to the Subordinated Debt
Securities, the Company would be unable to deduct interest on the
Subordinated Debt Securities. However, on March 29, 1996, the Chairmen of
the Senate Finance and House Ways and Means Committees issued a joint
statement to the effect that it was their intention that the effective date
of the President's legislative proposals, if adopted, will be no earlier
than the date of appropriate Congressional action. There can be no
assurance, however, that current or future legislative proposals or final
legislation will not affect the ability of the Company to deduct interest
on the Subordinated Debt Securities. If legislation were enacted limiting,
in whole or in part, the deductibility by the Company of interest on the
Subordinated Debt Securities for United States federal income tax purposes,
such enactment could give rise to a Tax Event. A Tax Event would permit the
Company to cause a redemption of the Securities as described more fully
under "Description of the Securities -- Tax Event Redemption or
Distribution" herein.
PAYMENTS OF INTEREST
Except as set forth below, stated interest on a Subordinated Debt
Security will generally be taxable to a United States Holder as ordinary
income at the time it is paid or accrued in accordance with the United
States Holder's method of accounting for tax purposes.
ORIGINAL ISSUE DISCOUNT
Under income tax regulations that recently became effective, the Company
believes that the Subordinated Debt Securities will not be treated as
issued with OID. It should be noted that these regulations have not yet
been addressed in any rulings or other interpretations by the IRS.
Accordingly, it is possible that the IRS could take a position contrary to
the interpretation described herein.
Under the Indenture, the Company has the right to defer the payment of
interest on the Subordinated Debt Securities at any time or from time to
time for a period not exceeding __ consecutive Scheduled Interest Periods
with respect to each Extension Period provided, however, that no Extension
Period may extend beyond the Stated Maturity (as defined in the Indenture)
of the Subordinated Debt Securities. Should the Company exercise this
right to defer payments of interest, the Subordinated Debt Securities would
at that time be treated as issued with OID and all the stated interest
payments on the Subordinated Debt Securities would thereafter be treated as
OID for so long as they remained outstanding. As a result, all United
States Holders would, in effect, be required to accrue interest income even
if such United States Holders are on a cash method of accounting.
Consequently, in the event that the payment of interest is deferred, a
United States Holder could be required to include OID in income on an
economic accrual basis, notwithstanding that the Company will not make any
interest payments during such period on the Subordinated Debt Securities.
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RECEIPT OF SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION
OF THE TRUST
Upon the occurrence of a Tax Event the Company has the right to cause
Subordinated Debt Securities to be distributed to holders of Securities in
exchange for the Securities and in liquidation of the Trust. Under current
law, for United States federal income tax purposes, if the Trust is treated
as a "grantor trust" at the time of distribution, such distribution would
be treated as a non-taxable event to each United States Holder, and each
United States Holder would receive an aggregate tax basis in the
Subordinated Debt Securities equal to such holder's aggregate tax basis in
its Securities. A United States Holder's holding period for the
Subordinated Debt Securities received in liquidation of the Trust would
include the period during which such holder held the Securities.
Under certain circumstances, as described herein under the caption
"Description of Securities," the Subordinated Debt Securities may be
redeemed for cash and the proceeds of such redemption distributed to
holders of Securities in redemption of the Securities. Under current law,
such a redemption would, for United States federal income tax purposes,
constitute a taxable disposition of the Securities, and a United States
Holder would recognize gain or loss as if such holder had sold such
redeemed Securities. See "-- Sale, Exchange and Redemption of the
Securities" below.
SALE, EXCHANGE AND REDEMPTION OF THE SECURITIES
Upon the sale, exchange or redemption of Securities, a United States
Holder will recognize gain or loss equal to the difference between the
amount realized upon the sale, exchange or redemption and such holder's
adjusted tax basis in the Securities. A United States Holder's adjusted tax
basis will, in general, be the issue price of the Securities, increased by
any interest income or OID previously included in income by the United
States Holder and reduced by any distributions on the Securities. Such gain
or loss generally will be capital gain or loss and will be long-term
capital gain or loss if at the time of sale, exchange or redemption, the
Securities have been held for more than one year. Under current law, net
capital gains of individuals are, under certain circumstances, taxed at
lower rates than items of ordinary income. The deductibility of capital
losses is subject to limitations.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Subject to the qualification discussed below, income on the Securities
will be reported to holders on Form 1099, which should be mailed to such
holders by January 31 following each calendar year.
So long as the Securities will be held in book-entry only form, the Trust
will be obligated to report annually to Cede & Co., as holder of record of
the Securities, the interest income or OID related to the Subordinated Debt
Securities that accrued during the year. The Trust currently intends to
report such information on Form 1099 prior to January 31 following each
calendar year. The Underwriters have indicated to the Trust that, to the
extent that they hold Securities as nominees for beneficial holders, they
currently expect to report the interest income or OID that accrued during
the calendar year on such Securities to such beneficial holders on Form
1099 by January 31 following each calendar year. Under current law, holders
of Securities who hold as nominees for beneficial holders will not have any
obligation to report information regarding the beneficial holders to the
Trust. The Trust, moreover, will not have any obligation to report to
beneficial holders who are not also record holders. Thus, beneficial
holders of Securities who hold their Securities through underwriters will
receive Forms 1099 reflecting the income on their Securities from such
underwriters rather than from the Trust.
Payments made in respect of, and proceeds from the sale of, Securities
(or Subordinated Debt Securities distributed to holders of Securities) may
be subject to "backup" withholding tax of 31% if the holder fails to comply
with certain identification requirements, if such holder has previously
failed to report in full dividend and interest income, or if the holder
does not otherwise establish its entitlement to an exemption.
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Any withheld amount will be allowed as a credit against the holder's
United States federal income tax liability; provided, however, that certain
required information is provided to the IRS.
These information reporting and "backup" withholding tax rules are
subject to temporary Treasury Regulations. Accordingly, the application of
such rules to the Securities could be changed.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting
agreement (the "Underwriting Agreement"), Washington Water Power Capital
has agreed to sell to each of the Underwriters named below, and each of the
Underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated
is acting as representative (the "Representative"), has severally agreed to
purchase the number of Securities set forth opposite its name below. In the
Underwriting Agreement, the several Underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase all the Securities
offered hereby if any of the Securities are purchased. In the event of
default by an Underwriter, the Underwriting Agreement provides that, in
certain circumstances, the purchase commitments of the non-defaulting
Underwriters may be increased or the Underwriting Agreement may be
terminated.
UNDERWRITERS NUMBER OF SECURITIES
------------ --------------------
Merrill Lynch, Pierce, Fenner &
Smith Incorporated . . . . .
___________
Total . . . . . . . . . .
==========
The Underwriters propose to offer the Securities, in part, directly to
the public at the initial public offering price set forth on the cover page
of this Prospectus Supplement, and, in part, to certain securities dealers
at such price less a concession of $____ per Security. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $____
per Security to certain brokers and dealers. After the Securities are
released for sale to the public, the offering price and other selling terms
may from time to time be varied by the Representative.
In view of the fact that the proceeds of the sale of the Securities will
ultimately be used to purchase the Subordinated Debt Securities of the
Company, the Underwriting Agreement provides that the Company will pay as
Underwriters' Compensation to the Underwriters arranging the investment
therein of such proceeds, an amount in immediately available funds of
$.____ per Security (or $_____________ in the aggregate) for the accounts
of the several Underwriters; provided, however, that such compensation for
sales of 10,000 or more Securities to any single purchaser will be $.____
per Security. Therefore, to the extent of such sales, the actual amount of
Underwriters' Compensation will be less than the aggregate amount specified
in the preceding sentence.
During a period of 30 days from the date of this Prospectus Supplement,
neither the Trust nor the Company will, without the prior written consent
of the Underwriters, directly or indirectly, sell, offer to sell, grant any
option for sale of or otherwise dispose of, any Securities, any security
convertible into or exchangeable into or exercisable for Securities or
Subordinated Debt Securities or any debt securities substantially similar
to the Subordinated Debt Securities or equity securities substantially
similar to the Securities (except for the Securities and the Subordinated
Debt Securities offered hereby).
Application will be made to list the Securities on the NYSE. If approved,
trading of the Securities on the NYSE is expected to commence within a 30-
day period after the initial delivery of the Securities. The Representative
has advised Washington Water Power Capital that they intend to make a
market in the Securities prior to the commencement of trading on the NYSE.
The Representative will have no obligation to make a market in the
Securities, however, and may cease market making activities, if commenced,
at any time.
S-24
Prior to this offering there has been no public market for the
Securities.
Washington Water Power Capital and the Company have agreed to indemnify
the Underwriters against, or contribute to payments that the Underwriters
may be required to make in respect of, certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
Certain of the Underwriters engage in transactions with, and, from time
to time, have performed services for, the Company and its subsidiaries in
the ordinary course of business.
S-25
PROSPECTUS
$150,000,000
THE WASHINGTON WATER POWER COMPANY
SUBORDINATED DEBT SECURITIES_______________
WASHINGTON WATER POWER CAPITAL I
WASHINGTON WATER POWER CAPITAL II
WASHINGTON WATER POWER CAPITAL III
SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED BY
THE WASHINGTON WATER POWER COMPANY
_______________
The Washington Water Power Company (the "Company") a Washington
corporation, may from time to time offer its subordinated debentures, notes
or other evidence of indebtedness (the "Subordinated Debt Securities") in
one or more series and in amounts, at prices and on terms to be determined
at the time of the offering. The Subordinated Debt Securities when issued
will be unsecured obligations of the Company. The Company's obligations
under the Subordinated Debt Securities will be subordinate and junior in
right of payment to certain other indebtedness, as may be described in an
accompanying Prospectus Supplement (a "Prospectus Supplement") and in an
aggregate amount to be set forth as of the most recent practicable date in
such Prospectus Supplement.
Washington Water Power Capital I, Washington Water Power Capital II and
Washington Water Power Capital III (each, a "Washington Water Power
Trust"), each a statutory business trust formed under the laws of the State
of Delaware, may offer, from time to time, securities representing
undivided beneficial interests in the assets of the respective Washington
Water Power Trust ("Securities"). The payment of periodic cash
distributions ("distributions") with respect to Securities of each of the
Washington Water Power Trusts out of moneys held by each of the Washington
Water Power Trusts, and payment on liquidation, redemption or otherwise
with respect to such Securities, will be guaranteed by the Company to the
extent described herein (each, a "Securities Guarantee"). See "Description
of the Securities Guarantees" herein. The Company's obligations under the
Securities Guarantees are subordinate and junior in right of payment to all
other liabilities of the Company. Subordinated Debt Securities may be
issued and sold from time to time in one or more series to a Washington
Water Power Trust or a trustee of such Washington Water Power Trust in
connection with the investment of the proceeds from the offering of
Securities and Common Securities (as defined herein, together the "Trust
Securities") of such Washington Water Power Trust. The Subordinated Debt
Securities purchased by a Washington Water Power Trust may subsequently be
distributed pro rata to holders of Securities and Common Securities in
connection with the dissolution of such Washington Water Power Trust upon
the occurrence of certain events as may be described in an accompanying
Prospectus Supplement. The Subordinated Debt Securities and the Securities
and the related Securities Guarantees are sometimes collectively referred
to hereafter as the "Offered Securities."
Specific terms of the Subordinated Debt Securities of any series or the
Securities of any Washington Water Power Trust, the terms of which will be
correlative to the terms of the Subordinated Debt Securities held by any
Washington Water Power Trust, in respect of which this prospectus (the
"Prospectus") is being delivered, will be set forth in a Prospectus
Supplement with respect to such securities which will describe, without
limitation and where applicable, the following: (i) in the case of
Subordinated Debt Securities, the specific designation, aggregate principal
amount, denomination, maturity, premium, if any, any exchange, conversion,
redemption or sinking fund provisions, if any, interest rate (which may be
fixed or variable), if any, the time and method of calculating interest
payments, if any, dates on which premium, if any, and interest, if any,
will be payable, the right of the Company, if any, to defer payment of
interest on the Subordinated Debt Securities and the maximum length of such
deferral period, the initial public offering price, subordination terms,
and any listing on a securities exchange and other specific terms of the
offering; and (ii) in the case of Securities, the designation, number of
securities, liquidation amount per security, initial public offering price,
any listing on a securities exchange, distribution rate (or method of
calculation thereof), dates on which distributions shall be payable and
dates from which distributions shall accrue, any voting rights, terms for
any conversion or exchange into other securities, any redemption, exchange
or sinking fund provisions, any other rights, preferences, privileges,
limitations or restrictions relating to the Securities and the terms upon
which the proceeds of the sale of the Securities shall be used to purchase
a specific series of Subordinated Debt Securities of the Company.
The Offered Securities may be offered in amounts, at prices and on terms
to be determined at the time of offering; provided, however, that the
aggregate initial public offering price of all Offered Securities shall not
exceed $150,000,000. The Prospectus Supplement relating to any series of
Offered Securities will contain information concerning certain United
States federal income tax considerations, if applicable to the Offered
Securities.
The Company and/or each of the Washington Water Power Trusts may sell the
Offered Securities directly, through agents designated from time to time,
or through underwriters or dealers. See "Plan of Distribution" below. If
any agents of the Company and/or any Washington Water Power Trust or any
underwriters or dealers are involved in the sale of the Offered Securities,
the names of such agents, underwriters or dealers and any applicable
commissions and discounts will be set forth in any related Prospectus
Supplement.
This Prospectus may not be used to consummate sales of securities unless
accompanied by a Prospectus Supplement.
_______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ________, 199_
2
AVAILABLE INFORMATION
This Prospectus constitutes a part of a combined Registration Statement
on Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") filed by the Company and the Washington Water
Power Trusts with the Securities and Exchange Commission (the "SEC" or the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Offered Securities. This Prospectus does not
contain all of the information set forth in such Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the SEC, although it does include a summary of the material
terms of the Indenture and the Declarations (as defined herein). Reference
is made to such Registration Statement and to the exhibits relating thereto
for further information with respect to the Company, the Washington Water
Power Trusts and the Offered Securities. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the SEC or incorporated by
reference herein are not necessarily complete, and, in each instance,
reference is made to the copy of such document so filed for a more complete
description of the matter involved. Each such statement is qualified in its
entirety by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the SEC. Information, as of particular dates, concerning the Company's
directors and officers, their remuneration, the principal holders of the
Company's securities, and any material interest of such persons in
transactions with the Company is disclosed in proxy statements distributed
to shareholders of the Company and filed with the SEC. These reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; 7 World Trade Center, 13th Floor, New York, New
York 10048; and 500 West Madison Street, 14th Floor, Chicago, Illinois
60601; and copies of such material can be obtained from the Public
Reference Section of the SEC, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The SEC maintains a Web site
that contains reports, proxy and information statements and other
information regarding reporting companies under the Exchange Act, including
the Company, at http://www.sec.gov. The Company's Common Stock is listed on
the New York and Pacific Stock Exchanges, and reports, proxy statements and
other information concerning the Company can be inspected at the offices of
such exchanges located at the New York Stock Exchange, 20 Broad Street, New
York, New York 10005, and the Pacific Stock Exchange, 301 Pine Street, San
Francisco, California 94104, respectively.
No separate financial statements of any of the Washington Water Power
Trusts have been included herein. The Company does not consider that such
financial statements would be material to holders of the Securities because
(i) all of the voting securities of each of the Washington Water Power
Trusts will be owned, directly or indirectly, by the Company, a reporting
company under the Exchange Act, (ii) each of the Washington Water Power
Trusts has no independent operations but exists for the sole purpose of
issuing securities representing undivided beneficial interests in the
assets of such Washington Water Power Trust and investing the proceeds
thereof in Subordinated Debt Securities issued by the Company and (iii) the
Company's obligations described herein and in any accompanying Prospectus
Supplement to provide certain indemnities in respect of and be responsible
for certain costs, expenses, debts and liabilities of each of Washington
Water Power Capital I, II and III under the Indenture (as defined herein),
pursuant to the Declarations of each Trust and under the Expense Agreements
(as defined herein) relating to each Trust, the guarantee issued with
respect to Securities issued by that Trust, the Subordinated Debt
Securities purchased by that Trust and the related Indenture, taken
together, effectively constitute a full and unconditional guarantee, on a
subordinated basis, of payments due on the Securities. See "Description of
the Subordinated Debt Securities" and "Description of the Securities
Guarantees" herein.
The Washington Water Power Trusts are not currently subject to the
information reporting requirements of the Exchange Act. The Washington
Water Power Trusts will become subject to such requirements upon the
effectiveness of the Registration Statement, although they intend to seek
and expect to receive exemptions therefrom.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates herein by reference, and as of any time
hereafter prior to the termination of the offering made by this Prospectus
the Company shall be deemed to have incorporated herein by reference, (1)
the Company's latest Annual Report on Form 10-K (the "Latest Annual
Report") filed by the Company with the SEC pursuant to the Exchange Act,
and (2) all other reports and documents filed by the Company with the SEC
3
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the filing of the Latest Annual Report, and all of such
documents shall be deemed to be a part hereof from the respective dates of
filing thereof. The documents incorporated herein by reference are
sometimes hereinafter called the "Incorporated Documents." Any statement
contained in an Incorporated Document shall be deemed to be modified or
superseded for all purposes to the extent that a statement in this
Prospectus or in any subsequently filed Incorporated Document modifies or
replaces such statement. The Incorporated Documents incorporated herein by
reference as of the date of this Prospectus are the Annual Report on Form
10-K for the year ended December 31, 1995, the Quarterly Reports on Form
10-Q for the quarters ended March 31, June 30 and September 30, 1996, and
the Current Report on Form 8-K dated December 1, 1996.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE INCORPORATED
DOCUMENTS, OTHER THAN EXHIBITS THERETO (UNLESS SUCH EXHIBITS ARE SPECIFI-
CALLY INCORPORATED BY REFERENCE INTO SUCH INCORPORATED DOCUMENTS). REQUESTS
FOR SUCH COPIES SHOULD BE DIRECTED TO LAWRENCE J. PIERCE, VICE PRESIDENT
AND TREASURER, BY MAIL AT THE WASHINGTON WATER POWER COMPANY, POST OFFICE
BOX 3727, SPOKANE, WASHINGTON 99220, OR BY TELEPHONE AT 509-489-0500.
THE TRUSTS
Each of Washington Water Power Capital I and Washington Water Power
Capital II and Washington Water Power Capital III is a statutory business
trust formed under Delaware law pursuant to (i) a separate declaration of
trust (each a "Declaration") executed by the Company, as sponsor for such
trust and the Washington Water Power Trustees (as defined herein) for such
trust and (ii) the filing of a certificate of trust with the Delaware
Secretary of State on November 4, 1996. Each Washington Water Power Trust
exists for the exclusive purposes of (i) issuing the Securities and common
securities representing undivided beneficial interests in the assets of
such Trust (the "Common Securities" and, together with the Securities, the
"Trust Securities"), (ii) investing the gross proceeds of the sale of the
Trust Securities in the Subordinated Debt Securities and (iii) engaging in
only those other activities necessary or incidental thereto. All of the
Common Securities will be directly or indirectly owned by the Company. The
Common Securities will rank pari passu, and payments will be made thereon
pro rata with the Securities except that upon an event of default under the
Declaration, the rights of the holders of the Common Securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the
Securities. The Company will, directly or indirectly, acquire Common
Securities in an aggregate liquidation amount equal to 3 percent of the
total capital of each Washington Water Power Trust. Each Washington Water
Power Trust has a term of approximately 45 years, but may terminate earlier
as provided in the related Declaration. Each Washington Water Power Trust's
business and affairs will be conducted by the trustees (the "Washington
Water Power Trustees") appointed by the Company as the direct or indirect
holder of all of the Common Securities. The holder of the Common Securities
will be entitled to appoint, remove or replace any of, or increase or
reduce the number of, the Washington Water Power Trustees of a Washington
Water Power Trust. The duties and obligations of the Washington Water Power
Trustees shall be governed by the Declaration of such Washington Water
Power Trust. A majority of the Washington Water Power Trustees (the
"Regular Trustees") of each Washington Water Power Trust will be persons
who are employees or officers of or affiliated with the Company. One
Washington Water Power Trustee of each Washington Water Power Trust will be
a financial institution which will be unaffiliated with the Company and
which shall act as property trustee and as indenture trustee for purposes
of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
pursuant to the terms set forth in a Prospectus Supplement (the
"Institutional Trustee"). In addition, unless the Institutional Trustee
maintains a principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law, one Washington Water
Power Trustee of each Washington Water Power Trust will have its principal
place of business or reside in the State of Delaware (the "Delaware
Trustee"). The Company will pay all fees and expenses related to the
Washington Water Power Trusts and the offering of Trust Securities, the
payment of which will be guaranteed by the Company. The office of the
Delaware Trustee for each Washington Water Power Trust in the State of
Delaware is Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890. The principal place of business
of each Washington Water Power Trust shall be c/o The Washington Water
Power Company, 1411 East Mission Avenue, Spokane, Washington 99202. The
telephone number is 509-489-0500.
4
USE OF PROCEEDS
Each Washington Water Power Trust will use all proceeds received from the
sale of the Securities to purchase Subordinated Debt Securities from the
Company. The Company intends to use the net proceeds from the issuance and
sale of the Subordinated Debt Securities for any or all of the following
purposes: (i) to fund a portion of the Company's construction, facility
improvement and maintenance programs, (ii) to retire or exchange one or
more outstanding series of its preferred stock, bonds or notes, (iii) to
reimburse the Company's treasury for funds previously expended for these
purposes, and (iv) for other general corporate purposes.
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Subordinated Debt Securities may be issued from time to time in one or
more series under an Indenture, dated as of _____________ 1, 199_ (the
"Original Indenture"), between the Company and Wilmington Trust Company, as
Trustee (the "Debt Trustee"), (the Original Indenture, as amended and
supplemented from time to time, is hereinafter referred to as the
"Indenture"). The terms of the Subordinated Debt Securities will include
those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The following summary does not
purport to be complete and is subject in all respects to the provisions of,
and is qualified in its entirety by reference to, the Indenture, which is
filed as an exhibit to the Registration Statement of which this Prospectus
forms a part, and the Trust Indenture Act. Capitalized terms used under
this heading which are not otherwise defined in this Prospectus, shall have
the meanings ascribed thereto in the Indenture. Whenever particular
provisions or defined terms in the Indenture are referred to herein, such
provisions or defined terms are incorporated by reference herein.
GENERAL
Each series of Subordinated Debt Securities will rank pari passu with all
other series of Subordinated Debt Securities, will be unsecured and
subordinate and junior in right of payment to the extent and in the manner
set forth in the Indenture to all Senior Indebtedness (as defined herein)
of the Company. See "-- Subordination" herein. Except as otherwise
provided in the applicable Prospectus Supplement, the Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of the
Company, whether under the Indenture, any other indenture that the Company
may enter into in the future or otherwise. See "-- Subordination" herein
and the Prospectus Supplement relating to any offering of Securities or
Subordinated Debt Securities.
Concurrently with the issuance of each Washington Water Power Trust's
Securities, such Washington Water Power Trust will invest the proceeds from
the sale thereof and the consideration paid by the Company for the Common
Securities of such Washington Water Power Trust in a series of Subordinated
Debt Securities issued by the Company to such Washington Water Power Trust.
Each series of Subordinated Debt Securities issued to a Washington Water
Power Trust or a trustee of such trust in connection with the issuance of
Trust Securities by such Washington Water Power Trust, will be in the
principal amount equal to the aggregate stated liquidation amount of the
related Securities plus the Company's concurrent investment in the Common
Securities and will rank pari passu with all other series of Subordinated
Debt Securities. Such Subordinated Debt Securities will be unsecured and
subordinate and junior in right of payment to the extent and in the manner
set forth in the Indenture to all Senior Indebtedness of the Company. See
"-- Subordination" herein and the Prospectus Supplement relating to any
offering of related Securities.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Subordinated Debt Securities: (1) the
title of the Subordinated Debt Securities; (2) any limit upon the aggregate
principal amount of the Subordinated Debt Securities; (3) the date or dates
on which the principal of the Subordinated Debt Securities is payable or
the method of determination thereof and the right, if any, to extend such
date or dates; (4) the rate or rates, if any, or the method by which such
rate or rates shall be determined, at which the Subordinated Debt
Securities shall bear interest, if any, the date or dates from which any
such interest will accrue, the Interest Payment Dates on which any such
interest shall be payable, the right, if any, of the Company to defer or
extend an Interest Payment Date, and the Regular Record Date for any
interest payable on any Interest Payment Date and the person or persons to
whom interest on such Subordinated Debt Securities shall be payable on any
Interest Payment Date, if other than the persons in whose names such
Subordinated Debt Securities are registered at the close of business on the
Regular Record Date for such interest; (5) the place or places where,
subject to the terms of the Indenture as described below under "-- Payment
and Paying Agents," the principal of and premium, if any, and interest on
5
the Subordinated Debt Securities will be payable and where, subject to the
terms of the Indenture as described below under "-- Registration and
Transfer," the Subordinated Debt Securities may be presented for
registration of transfer or exchange and the place or places where notices
and demands to or upon the Company in respect of the Subordinated Debt
Securities and the Indenture may be served; the Security Registrar and
Paying Agents for such Subordinated Debt Securities; and, if such is the
case, that the principal of such Subordinated Debt Securities shall be
payable without presentation or surrender thereof; (6) any period or
periods within, or date or dates on, which, the price or prices at which
and the terms and conditions upon which Subordinated Debt Securities may be
redeemed, in whole or in part, at the option of the Company; (7) the
obligation or obligations, if any, of the Company to redeem or purchase any
of the Subordinated Debt Securities pursuant to any sinking fund or other
mandatory redemption provisions or at the option of the holder thereof, and
the period or periods within which, the price or prices at which, and the
terms and conditions upon which the Subordinated Debt Securities shall be
redeemed or purchased, in whole or in part, pursuant to such obligation,
and applicable exceptions to the requirements of a notice of redemption in
the case of mandatory redemption or redemption at the option of the holder;
(8) the denominations in which any Subordinated Debt Securities shall be
issuable if other than denominations of $1,000 and any integral multiple
thereof (in the case of Subordinated Debt Securities issued to a Washington
Water Power Trust or a trustee of such trust in connection with the
issuance of Trust Securities by such Washington Water Power Trust, the
denominations in which any Subordinated Debt Securities shall be issuable
if other than denominations of $25 and any integral multiple thereof); (9)
if the Subordinated Debt Securities are to be issued in global form, the
identity of the depositary thereof; and (10) any other terms of the
Subordinated Debt Securities not inconsistent with the provisions of the
Indenture.
PAYMENT AND PAYING AGENTS
Except as may be provided in the applicable Prospectus Supplement,
interest, if any, on each Subordinated Debt Security payable on each
Interest Payment Date will be paid to the person in whose name such
Subordinated Debt Security is registered as of the close of business on the
regular record date relating to such Interest Payment Date (each such
period of interest accrual being hereinafter called a "Scheduled Interest
Period"); provided, however, that interest payable at maturity (whether at
stated maturity, upon redemption or otherwise, hereinafter "Maturity") will
be paid to the person to whom principal is paid. However, if there has
been a default in the payment of interest on any Subordinated Debt
Security, such defaulted interest may be payable to the holder of such
Subordinated Debt Security as of the close of business on a date selected
by the Debt Trustee which is not more than 30 days and not less than 10
days prior to the date proposed by the Company for payment of such
defaulted interest or in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Subordinated Debt
Security may be listed, if the Debt Trustee deems such manner of payment
practicable.
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of and premium, if any, and interest, if any, on the Subordinated
Debt Securities at Maturity will be payable upon presentation of the
Subordinated Debt Securities at the corporate trust office of Wilmington
Trust Company, in Wilmington, Delaware, as Paying Agent for the Company.
The Company may change the Place of Payment on the Subordinated Debt
Securities, may appoint one or more additional Paying Agents (including the
Company) and may remove any Paying Agent, all at its discretion.
REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
transfer of Subordinated Debt Securities may be registered, and
Subordinated Debt Securities may be exchanged for other Subordinated Debt
Securities of the same series and tranche, of authorized denominations and
of like tenor and aggregate principal amount, at the corporate trust office
of Wilmington Trust Company, in Wilmington, Delaware, as Security Registrar
for the Subordinated Debt Securities. The Company may change the place for
registration of transfer and exchange of the Subordinated Debt Securities
and may designate one or more additional places for such registration and
exchange, all at its discretion. Except as otherwise provided in the
applicable Prospectus Supplement, no service charge will be made for any
transfer or exchange of the Subordinated Debt Securities, but the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer or exchange of the Subordinated Debt Securities. The Company
will not be required to execute or to provide for the registration of
transfer of or the exchange of (a) any Subordinated Debt Security during a
period of 15 days prior to giving any notice of redemption or (b) any
Subordinated Debt Security selected for redemption in whole or in part,
6
except the unredeemed portion of any Subordinated Debt Security being
redeemed in part.
REDEMPTION
Any terms for the optional or mandatory redemption of Subordinated Debt
Securities will be set forth in the applicable Prospectus Supplement.
Except as shall otherwise be provided in the applicable Prospectus
Supplement with respect to Subordinated Debt Securities redeemable at the
option of the holder, Subordinated Debt Securities will be redeemable only
upon notice by mail not less than 30 nor more than 60 days prior to the
date fixed for redemption, and, if less than all the Subordinated Debt
Securities of a series, or any tranche thereof, are to be redeemed, the
particular Subordinated Debt Securities to be redeemed will be selected by
such method as shall be provided for such series or Tranche, or in the
absence of any such provision, by such method of random selection as the
Security Registrar deems fair and appropriate.
Any notice of redemption at the option of the Company may state that such
redemption will be conditional upon receipt by the Paying Agent or Agents,
on or prior to the dated fixed for such redemption, of money sufficient to
pay the principal of and premium, if any, and interest, if any, on such
Subordinated Debt Securities and that if such money has not been so
received, such notice will be of no force or effect and the Company will
not be required to redeem such Subordinated Debt Securities.
MODIFICATION OF INDENTURE
Without the consent of any holders of Subordinated Debt Securities, the
Company and the Trustee may enter into one or more supplemental indentures
for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company in
the Indenture and in the Subordinated Debt Securities; or
(b) to add one or more covenants of the Company or other provisions
for the benefit of all holders of Subordinated Debt Securities or for the
benefit of the holders of, or to remain in effect only so long as there
shall be outstanding, Subordinated Debt Securities of one or more
specified series, or one or more tranches thereof, or to surrender any
right or power conferred upon the Company by the Indenture; or
(c) to change or eliminate any provision of the Indenture or to add
any new provision to the Indenture, provided that if such change,
elimination or addition adversely affects the interests of the holders of
the Subordinated Debt Securities of any series or tranche in any material
respect, such change, elimination or addition will become effective with
respect to such series or tranche only when no Subordinated Debt Security
of such series or tranche remains outstanding; or
(d) to provide collateral security for the Subordinated Debt
Securities; or
(e) to establish the form or terms of the Subordinated Debt
Securities of any series or tranche as permitted by the Indenture; or
(f) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if
any, thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the solicitation
of the vote or consent of, the holders thereof, and for any and all other
matters incidental thereto; or
(g) to evidence and provide for the acceptance of appointment by a
successor trustee with respect to the Subordinated Debt Securities of one
or more series; or
(h) to provide for the procedures required to permit the utilization
of a non-certificated system of registration for all, or any series or
tranche of, the Subordinated Debt Securities; or
(i) to change any place or places where (1) the principal of and
premium, if any, and interest, if any, on all or any series of
Subordinated Debt Securities, or any tranche thereof, will be payable,
(2) all or any series of Subordinated Debt Securities, or any tranche
7
thereof, may be surrendered for registration of transfer, (3) all or any
series of Subordinated Debt Securities, or any tranche thereof, may be
surrendered for exchange and (4) notices and demands to or upon the
Company in respect of all or any series of Subordinated Debt Securities,
or any tranche thereof, and the Indenture may be served; or
(j) to cure any ambiguity, to correct or supplement any provision
therein which may be defective or inconsistent with any other provision
therein, or to make any other changes to the provisions thereof or to add
other provisions with respect to matters and questions arising under the
Indenture, so long as such other changes or additions do not adversely
affect the interests of the holders of Subordinated Debt Securities of
any series or tranche in any material respect.
Without limiting the generality of the foregoing, if the Trust Indenture
Act is amended after the date of the Original Indenture in such a way as to
require changes to the Indenture or the incorporation therein of additional
provisions or so as to permit changes to, or the elimination of, provisions
which, at the date of the Original Indenture or at any time thereafter,
were required by the Trust Indenture Act to be contained in the Indenture,
the Indenture will be deemed to have been amended so as to conform to such
amendment or to effect such changes or elimination, and the Company and the
Debt Trustee may, without the consent of any holders of Subordinated Debt
Securities, enter into one or more supplemental indentures to evidence or
effect such amendment.
Except as provided above, the consent of the holders of a majority in
aggregate principal amount of the Subordinated Debt Securities of all
series then outstanding, considered as one class, is required for the
purpose of adding any provisions to, or changing in any manner, or
eliminating any of the provisions of, the Indenture pursuant to one or more
supplemental indentures; provided, however, that if less than all of the
series of Subordinated Debt Securities outstanding are directly affected by
a proposed supplemental indenture, then the consent only of the holders of
a majority in aggregate principal amount of outstanding Subordinated Debt
Securities of all series so directly affected, considered as one class,
will be required; and provided, further, that if the Subordinated Debt
Securities of any series have been issued in more than one tranche and if
the proposed supplemental indenture directly affects the rights of the
holders of one or more, but less than all, such tranches, then the consent
only of the holders of a majority in aggregate principal amount of the
outstanding Subordinated Debt Securities of all tranches so directly
affected, considered as one class, will be required; and provided, further,
that no such amendment or modification may (a) change the Stated Maturity
of the principal of, or any installment of principal of or interest on, any
Subordinated Debt Security other than pursuant to the terms thereof, or
reduce the principal amount thereof or the rate of interest thereon (or the
amount of any installment of interest thereon) or change the method of
calculating such rate or reduce any premium payable upon the redemption
thereof, or reduce the amount of the principal of any Discount Security
that would be due and payable upon a declaration of acceleration of
Maturity or change the coin or currency (or other property) in which any
Subordinated Debt Security or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity of any Subordinated Debt
Security (or, in the case of redemption, on or after the redemption date)
without, in any such case, the consent of the holder of such Subordinated
Debt Security, (b) reduce the percentage in principal amount of the
outstanding Subordinated Debt Securities of any series, or any tranche
thereof, the consent of the holders of which is required for any such
supplemental indenture, or the consent of the holders of which is required
for any waiver of compliance with any provision of the Indenture or of any
default thereunder and its consequences, or reduce the requirements for
quorum or voting, without, in any such case, the consent of the holder of
each outstanding Subordinated Debt Security of such series or tranche, or
(c) modify certain of the provisions of the Indenture relating to
supplemental indentures, waivers of certain covenants and waivers of past
defaults with respect to the Subordinated Debt Securities of any series, or
any tranche thereof, without the consent of the holder of each outstanding
Subordinated Debt Security of such series or tranche.
A supplemental indenture which changes or eliminates any covenant or
other provision of the Indenture which has expressly been included solely
for the benefit of the holders of, or which is to remain in effect only so
long as there shall be outstanding, Subordinated Debt Securities of one or
more specified series, or one or more tranches thereof, or modifies the
rights of the holders of Subordinated Debt Securities of such series or
tranches with respect to such covenant or other provision, will be deemed
not to affect the rights under the Indenture of the holders of the
Subordinated Debt Securities of any other series or tranche.
Notwithstanding the foregoing, so long as the Subordinated Debt
Securities of any series are held by a Washington Water Power Trust, the
Debt Trustee may not consent to a supplemental indenture contemplated in
8
the second preceding paragraph without the prior consent, obtained as
provided in the Declaration establishing such trust of the holders of a
majority in aggregate liquidation amount of all Securities issued by such
trust, or, in the case of changes described in clauses (a), (b) and (c)
above, of each holder of outstanding Securities.
INDENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Subordinated Debt Securities that has
occurred and is continuing constitutes an "Indenture Event of Default" with
respect to such series of Subordinated Debt Securities:
(i) failure for 60 days to pay any interest on such series of
Subordinated Debt Securities, when due and payable; provided, however,
that no such failure shall constitute an Indenture Event of Default if
the Company shall have made a valid extension of the interest payment
period with respect to such series of Subordinated Debt Securities if so
provided with respect to such series; or
(ii) failure to pay any principal or premium, if any, on such series
of Subordinated Debt Securities within 3 days after its maturity;
provided, however, that no such failure shall constitute an Indenture
Event of Default if the Company shall have made a valid extension of the
maturity of such series of Subordinated Debt Securities, if so provided
with respect to such series; or
(iii) failure to perform, or breach of, any covenant or warranty of
the Company contained in the Indenture for 90 days after written notice
to the Company from the Debt Trustee or to the Company and the Debt
Trustee by the holders of at least 33% in principal amount of such series
of outstanding Subordinated Debt Securities as provided in the Indenture;
or
(iv) certain events in bankruptcy, insolvency or reorganization of
the Company; or
(v) in the event Subordinated Debt Securities are issued to a
Washington Water Power Trust or a trustee of such trust in connection
with the issuance of Trust Securities by such Washington Water Power
Trust and so long as such Trust Securities remain outstanding, the
voluntary or involuntary dissolution, winding-up or termination of such
Washington Water Power Trust, except in connection with the distribution
of Subordinated Debt Securities in liquidation of such Washington Water
Power Trust, the redemption of all of the Trust Securities of such
Washington Water Power Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such Washington
Water Power Trust.
REMEDIES
If an Indenture Event of Default applicable to the Subordinated Debt
Securities of such series occurs and is continuing, then either the Debt
Trustee or the holders of not less than 33% in aggregate principal amount
of the outstanding Subordinated Debt Securities of such series may declare
the principal of all of the Subordinated Debt Securities of such series and
interest accrued thereon to be due and payable immediately (subject to the
subordination provisions of the Indenture); provided, however, that if an
Indenture Event of Default occurs and is continuing with respect to more
than one series of Subordinated Debt Securities, the Debt Trustee or the
holders of not less than 33% in aggregate principal amount of the
outstanding Subordinated Debt Securities of all such series, considered as
one class, may make such declaration of acceleration and not the holders of
the Subordinated Debt Securities of any one such series.
At any time after such a declaration of acceleration with respect to the
Subordinated Debt Securities of any series has been made, but before a
judgment or decree for payment of the money due has been obtained, the
Indenture Event or Events of Default giving rise to such declaration of
acceleration will, without further act, be deemed to have been cured, and
such declaration and its consequences will, without further act, be deemed
to have been rescinded and annulled, if
(a) the Company has paid or deposited with the Debt Trustee a sum
sufficient to pay
(1) all overdue interest, if any, on all Subordinated Debt
Securities of such series;
9
(2) the principal of and premium, if any, on any Subordinated
Debt Securities of such series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate or
rates prescribed therefor in such Subordinated Debt Securities;
(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Subordinated Debt Securities, to the
extent that payment of such interest is lawful; and
(4) all amounts due to the Debt Trustee under the Indenture; and
(b) any other Indenture Event or Events of Default with respect to
Subordinated Debt Securities of such series, other than the non-payment
of the principal of the Subordinated Debt Securities of such series which
has become due solely by such declaration of acceleration, have been
cured or waived as provided in the Indenture.
If an Indenture Event of Default with respect to the Subordinated Debt
Securities of any series occurs and is continuing, the holders of a
majority in principal amount of the outstanding Subordinated Debt
Securities of such series will have the right to direct the time, method
and place of conducting any proceedings for any remedy available to the
Debt Trustee or exercising any trust or power conferred on the Debt
Trustee; provided, however, that if an Indenture Event of Default occurs
and is continuing with respect to more than one series of Subordinated Debt
Securities, the holders of a majority in aggregate principal amount of the
outstanding Subordinated Debt Securities of all such series, considered as
one class, will have the right to make such direction, and not the holders
of the Subordinated Debt Securities of any one of such series; and
provided, further, that (a) such direction does not conflict with any rule
of law or with the Indenture, and could not involve the Debt Trustee in
personal liability in circumstances where indemnity would not, in the Debt
Trustee's sole discretion, be adequate and (b) the Debt Trustee may take
any other action deemed proper by the Debt Trustee which is not
inconsistent with such direction.
The Indenture provides that no holder of any Subordinated Debt Security
will have any right to institute any proceeding, judicial or otherwise,
with respect to the Indenture or for the appointment of a receiver or for
any other remedy thereunder unless (a) such holder has previously given to
the Debt Trustee written notice of a continuing Indenture Event of Default
with respect to the Subordinated Debt Securities of any one or more series;
(b) the holders of a majority in aggregate principal amount of the
outstanding Subordinated Debt Securities of all series in respect of which
such Indenture Event of Default has occurred, considered as one class have
made written request to the Debt Trustee to institute proceedings in
respect of such Indenture Event of Default and have offered the Debt
Trustee reasonable indemnity against costs and liabilities to be incurred
in complying with such request; and (c) for 60 days after receipt of such
notice, the Debt Trustee has failed to institute any such proceeding and no
direction inconsistent with such request has been given to the Debt Trustee
during such sixty day period by the holders of a majority in aggregate
principal amount of Subordinated Debt Securities then outstanding.
Furthermore, no holder will be entitled to institute any such action if and
to the extent that such action would disturb or prejudice the rights of
other holders. Notwithstanding that the right of a holder to institute a
proceeding with respect to the Indenture is subject to certain conditions
precedent, each holder of a Subordinated Debt Security has the right, which
is absolute and unconditional, to receive payment of the principal of and
premium, if any, and interest, if any, on such Subordinated Debt Security
when due and to institute suit for the enforcement of any such payment, and
such rights may not be impaired without the consent of such holder. The
Indenture provides that the Debt Trustee give the holders notice of any
default under the Indenture to the extent required by the Trust Indenture
Act, unless such default shall have been cured or waived, except that no
such notice to holders of a default of the character described in clause
(iii) under "-- Indenture Events of Default" may be given until at least 75
days after the occurrence thereof. For purposes of the preceding sentence,
the term "default" means any event which is, or after notice or lapse of
time, or both, would become, an Indenture Event of Default. The Trust
Indenture Act currently permits the Debt Trustee to withhold notices of
default (except for certain payment defaults) if the Debt Trustee in good
faith determines the withholding of such notice to be in the interests of
the holders.
If the Subordinated Debt Securities of any series shall be held by the
Institutional Trustee of a Washington Water Power Trust and if such
Institutional Trustee, as such holder, shall have failed to exercise any of
the rights and remedies available under the Indenture to the holders of
such Subordinated Debt Securities, the holders of the Securities of such
trust shall have and may exercise all such rights and remedies, to the same
extent as if such holders of such Securities held a principal amount of
Subordinated Debt Securities of such series equal to the liquidation amount
of such Securities, without first proceeding against such trustee or trust.
10
Notwithstanding the foregoing, in the case of an Indenture Event of Default
described above in clause (i) or (ii) under "-- Indenture Events of
Default," each holder of such Securities shall have and may exercise all
rights available to the Institutional Trustee as the holder of such
Subordinated Debt Securities. If action shall have been taken by both the
holder of such Subordinated Debt Securities and the holders of such
Securities to exercise such rights, the action taken by the holders of the
Securities shall control.
The Company is required to file annually with the Debt Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.
CERTAIN COVENANTS OF THE COMPANY
If at any time (a) there shall have occurred and be continuing a payment
default with respect to Subordinated Debt Securities of a series, (b) the
Company shall have given notice of its election of an Extension Period as
provided in the Indenture with respect to the Subordinated Debt Securities
of such series, and any such period, as so extended, shall be continuing,
or (c) the Company shall be in default with respect to its payment or other
obligations under the Securities Guarantee relating to the Securities of
the Washington Water Power Trust to which Subordinated Debt Securities of
such series have been issued, then the Company shall not (a) declare or pay
any dividend on, or make any distribution or liquidation payment with
respect to, or redeem or purchase any of its capital stock, (b) make any
payment of principal, premium, if any, or interest, if any, on or repay,
repurchase or redeem any debt securities (including other Subordinated Debt
Securities) issued by the Company that rank pari passu with or junior in
right of payment to the Subordinated Debt Securities or (c) make any
guarantee payments with respect to the foregoing (other than pursuant to
the Securities Guarantees); provided, however, that nothing herein shall be
deemed to prohibit (i) dividends or distributions payable in shares of the
Company's capital stock, (ii) reclassification of the Company's capital
stock or exchange or conversion of shares of one class or series of the
Company's capital stock into shares of another class or series of the
Company's capital stock, (iii) purchases or other acquisitions of
fractional interests in shares of the Company's capital stock and (iv)
redemption, purchases or other acquisitions of shares of the Company's
capital stock in connection with the satisfaction by the Company of its
obligations under provisions of the Company's Restated Articles of
Incorporation, as amended, under any direct purchase, dividend
reinvestment, customer purchase or employee benefit plans or under any
contract or security requiring the Company to purchase shares of its
capital stock.
If Subordinated Debt Securities of any series are issued and delivered to
a Washington Water Power Trust (or a trustee thereof) in connection with
the issuance by such trust of Trust Securities, so long as such Trust
Securities remain outstanding the Company will (a) maintain 100% direct
ownership of the Common Securities of such Washington Water Power Trust by
the Company or any affiliate thereof, except as otherwise provided below
under "-- Consolidation, Merger, Sale of Assets and Other Transactions,"
and (b) use all reasonable efforts to cause such Washington Water Power
Trust (i) to maintain its existence as a business trust, except in
connection with a distribution of Subordinated Debt Securities, with the
redemption, purchase or other acquisition and retirement of all Trust
Securities of such trust or with certain mergers, consolidations or other
business combinations, in each case as permitted by the Declaration
establishing such Washington Water Power Trust, and (ii) to otherwise
continue not to be treated as an association taxable as a corporation for
United States federal income tax purposes.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or
merge into any other corporation, or convey or otherwise transfer, or
lease, all of its properties, as or substantially as an entirety, to any
person, unless the corporation formed by such consolidation or into which
the Company is merged or the person which acquires by conveyance or other
transfer, or which leases (for a term extending beyond the last stated
maturity of the Subordinated Debt Securities then outstanding), all of the
properties of the Company, as or substantially as an entirety, shall be a
corporation organized and existing under the laws of the United States, any
State or Territory thereof or the District of Columbia or under the laws of
Canada or any Province thereof and shall expressly assume the due and
punctual payment of the principal of and premium, if any, and interest, if
any, on all the Subordinated Debt Securities then outstanding and the
performance and observance of every covenant and condition of the Indenture
to be performed or observed by the Company. In the case of the conveyance
or other transfer of all of the properties of the Company, as or
substantially as an entirety, to any person as contemplated above, the
Company would be released and discharged from all obligations under the
Indenture and on all Subordinated Debt Securities then outstanding unless
the Company elects to waive such release and discharge. Upon any such
11
consolidation or merger or any such conveyance or other transfer of
properties of the Company, the successor or transferee shall succeed to,
and be substituted for, and may exercise every power and right of, the
Company under the Indenture. For purposes of the Indenture, the conveyance
or other transfer by the Company of all of its facilities (a) for the
generation of electric energy, (b) for the transmission of electric energy
or (c) for the distribution of electric energy and/or natural gas, in each
case considered alone, or all of its facilities described in clauses (a)
and (b), considered together, or all of its facilities described in clauses
(b) and (c), considered together, shall in no event be deemed to constitute
a conveyance or other transfer of all the properties of the Company, as or
substantially as an entirety, unless, immediately following such conveyance
or other transfer, the Company shall own no properties in the other such
categories of property not so conveyed or otherwise transferred.
If the Company shall convey or otherwise transfer any part of its
properties which does not constitute the entirety, or substantially the
entirety, thereof to another corporation meeting the requirements set forth
in the preceding paragraph, and if (a) such transferee shall expressly
assume the due and punctual payment of the principal of and premium, if
any, and interest, if any, on all Subordinated Debt Securities then
outstanding and the performance and observance of every covenant and
condition of the Indenture to be performed or observed by the Company, (b)
there shall be delivered to the Trustee an independent expert's certificate
(i) describing the property so conveyed or transferred and identifying the
same as facilities for the generation, transmission or distribution of
electric energy or for the storage, transportation or distribution of
natural gas and (ii) stating that the aggregate principal amount of the
Subordinated Debt Securities then outstanding does not exceed 70% of the
fair value of such property, and (c) the Company shall assign or otherwise
transfer all Common Securities then outstanding to such transferee, then
the Company shall be released and discharged from all obligations and
covenants under the Indenture and on all Subordinated Debt Securities then
outstanding unless the Company elects to waive such release and discharge.
In such event, the transferee corporation shall succeed to, and be
substituted for, and may exercise every right and power of, the Company
under the Indenture.
SATISFACTION AND DISCHARGE
Any Subordinated Debt Securities, or any portion of the principal amount
thereof, will be deemed to have been paid for purposes of the Indenture
and, at the Company's election, the entire indebtedness of the Company in
respect thereof will be deemed to have been satisfied and discharged, if
there shall have been irrevocably deposited with the Debt Trustee or any
Paying Agent (other than the Company), in trust: (a) money in an amount
which will be sufficient, or (b) in the case of a deposit made prior to the
maturity of the Subordinated Debt Securities, Eligible Obligations, which
do not contain provisions permitting the redemption or other prepayment
thereof at the option of the issuer thereof, the principal of and the
interest on which when due, without any regard to reinvestment thereof,
will provide moneys which, together with the money, if any, deposited with
or held by the Debt Trustee or such Paying Agent, will be sufficient, or
(c) a combination of (a) and (b) which will be sufficient, to pay when due
the principal of and premium, if any, and interest, if any, due and to
become due on such Subordinated Debt Securities. For this purpose,
Eligible Obligations include direct obligations of, or obligations
unconditionally guaranteed by, the United States entitled to the benefit of
the full faith and credit thereof and certificates, depositary receipts or
other instruments which evidence a direct ownership interest in such
obligations or in any specific interest or principal payments due in
respect thereof and such other obligations or instruments as shall be
specified in an accompanying Prospectus Supplement.
The Indenture will be deemed to have been satisfied and discharged when
no Subordinated Debt Securities remain outstanding thereunder and the
Company has paid or caused to be paid all other sums payable by the Company
under the Indenture.
SUBORDINATION
In the Indenture, the Company has covenanted and agreed that any
Subordinated Debt Securities issued thereunder will be subordinate and
junior in right of payment to all Senior Indebtedness to the extent
provided in the Indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding- up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in
connection with any insolvency or bankruptcy proceeding of the Company, the
holders of Senior Indebtedness will first be entitled to receive payment in
full of principal of and premium, if any, and interest, if any, on such
Senior Indebtedness before the holders of Subordinated Debt Securities will
be entitled to receive any payment in respect of the principal of, premium,
if any, or interest, if any, on the Subordinated Debt Securities; and if,
12
notwithstanding the foregoing, payment in respect of the Subordinated Debt
Securities is received by the Debt Trustee or a holder of a Subordinated
Debt Security before all Senior Indebtedness is paid in full, such payment
in respect of the Subordinated Debt Securities is to be paid over to the
holders of Senior Indebtedness or their representatives.
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the holders of all Senior Indebtedness outstanding at the time
of such acceleration will be entitled to receive payment in full of all
amounts due thereon (including any amounts due upon acceleration) before
the holders of Subordinated Debt Securities will be entitled to receive any
payment upon the principal of, premium, if any, or interest, if any, on the
Subordinated Debt Securities. No payments on account of principal,
premium, if any, or interest, if any, in respect of the Subordinated Debt
Securities may be made if there shall have occurred and be continuing a
default in any payment with respect to Senior Indebtedness, or an event of
default with respect to any Senior Indebtedness resulting in the
acceleration of the maturity thereof remaining uncured.
The term Senior Indebtedness is defined in the Indenture to mean, with
respect to any person, (a) indebtedness (including premium, if any, and
interest, if any, thereon) for money borrowed or for the deferred purchase
price of property or services; (b) all other indebtedness (including
premium, if any, and interest, if any, thereon) evidenced by bonds,
debentures, notes or other similar instruments (other than Subordinated
Debt Securities); (c) all obligations of such person under lease agreements
designating such person as lessee, irrespective of the treatment of any
such lease agreement for accounting, tax or other purposes; (d) all
obligations for reimbursement (including premium, if any, and interest, if
any, thereon) in respect of any letter of credit, banker's acceptance,
security purchase facility or similar credit transaction; (e) all
obligations of the character referred to in clauses (a) through (d) above
of other persons for the payment of which such person is responsible or
liable as obligor, guarantor or otherwise; and (f) all obligations of the
character referred to in clauses (a) through (d) above of other persons
secured by any lien on any property or asset of such person (whether or not
such obligation is assumed by such person); provided, however, that Senior
Indebtedness shall not include (x) any such indebtedness that is by its
terms subordinated to or pari passu with the Subordinated Debt Securities
or (y) any indebtedness between or among such person and its affiliates,
including all other debt securities and guarantees in respect of such debt
securities, issued to (i) any Washington Water Power Trust or (ii) any
other trust, or a trustee of such trust, partnership or other entity which
is a financing vehicle of such person in connection with the issuance by
such financing vehicle of preferred or capital securities.
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Company. The Company expects from
time to time to incur additional indebtedness constituting Senior
Indebtedness.
INFORMATION CONCERNING THE DEBT TRUSTEE
The Debt Trustee shall have, and shall be subject to, all the duties and
responsibilities specified with respect to an indenture trustee under the
Trust Indenture Act. Subject to such provisions, the Debt Trustee is under
no obligation to exercise any of the powers vested in it by the Indenture
at the request of any holder of Subordinated Debt Securities, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The Debt Trustee is not
required to expend or risk its own funds or otherwise incur personal
financial liability in the performance of its duties if the Debt Trustee
reasonably believes that repayment or adequate indemnity is not reasonably
assured to it.
GOVERNING LAW
The Indenture and the Subordinated Debt Securities will be governed by
and construed in accordance with the laws of the State of New York.
DESCRIPTION OF THE SECURITIES
Each Washington Water Power Trust may issue, from time to time, only one
series of Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each Washington Water Power Trust
authorizes the Regular Trustees of such Washington Water Power Trust to
issue on behalf of such Washington Water Power Trust one series of
Securities. The Declaration will be qualified as an indenture under the
13
Trust Indenture Act. The Securities will have such terms, including
distributions, redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or such restrictions as shall
be set forth in the Declaration or made part of the Declaration by the
Trust Indenture Act and which will be correlative to the terms of the
Subordinated Debt Securities held by the Washington Water Power Trust and
described in the Prospectus Supplement relating thereto. Reference is made
to the Prospectus Supplement relating to the Securities of the Washington
Water Power Trust for specific terms, including (i) the distinctive
designation of such Securities; (ii) the number of Securities issued by
such Washington Water Power Trust; (iii) the annual distribution rate (or
method of determining such rate) for Securities issued by such Washington
Water Power Trust and the date or dates upon which such distributions shall
be payable; provided, however, that distributions on such Securities shall
be payable on a _________ basis to holders of such Securities as of a
record date in each Scheduled Interest Period during which such Securities
are outstanding; (iv) whether distributions on Securities issued by such
Washington Water Power Trust shall be cumulative, and, in the case of
Securities having such cumulative distribution rights, the date or dates or
method of determining the date or dates from which distributions on
Securities issued by such Washington Water Power Trust shall be cumulative;
(v) the amount or amounts which shall be paid out of the assets of such
Washington Water Power Trust to the holders of Securities of such
Washington Water Power Trust upon voluntary or involuntary dissolution,
winding-up or termination of such Washington Water Power Trust; (vi) the
obligation, if any, of such Washington Water Power Trust to purchase or
redeem Securities issued by such Washington Water Power Trust and the price
or prices at which, the period or periods within which, and the terms and
conditions upon which, Securities issued by such Washington Water Power
Trust shall be purchased or redeemed, in whole or in part, pursuant to such
obligation; (vii) the voting rights, if any, of Securities issued by such
Washington Water Power Trust in addition to those required by law,
including the number of votes per Security and any requirement for the
approval by the holders of Securities, or of Securities issued by one or
more Washington Water Power Trusts, or of both, as a condition to specified
action or amendments to the Declaration of such Washington Water Power
Trust; (viii) the enforcement rights, if any, of holders of Securities with
respect to the applicable series of Subordinated Debt Securities; (ix) the
terms and conditions, if any, upon which the Subordinated Debt Securities
may be distributed to holders of Securities; (x) if applicable, any
securities exchange upon which the Securities shall be listed; and (xi) any
other relevant rights, preferences, privileges, limitations or restrictions
of Securities issued by such Washington Water Power Trust not inconsistent
with the Declaration of such Washington Water Power Trust or with
applicable law. All Securities offered hereby will be guaranteed by the
Company to the extent set forth below under "Description of the Securities
Guarantees." Certain United States federal income tax considerations
applicable to any offering of Securities will be described in the
Prospectus Supplement relating thereto.
In connection with the issuance of Securities, each Washington Water
Power Trust will issue one series of Common Securities. The Declaration of
each Washington Water Power Trust authorizes the Regular Trustees of such
trust to issue on behalf of such Washington Water Power Trust one series of
Common Securities having such terms including distributions, redemption,
voting, liquidation rights or such restrictions as shall be set forth
therein. The terms of the Common Securities issued by a Washington Water
Power Trust will be substantially identical to the terms of the Securities
issued by such trust and the Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Securities except that,
upon an event of default under the Declaration, the rights of the holders
of the Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise will be subordinated to
the rights of the holders of the Securities. Except in certain limited
circumstances, the Common Securities will also carry the right to vote to
appoint, remove or replace any of the Washington Water Power Trustees of a
Washington Water Power Trust. All of the Common Securities of each
Washington Water Power Trust will be directly or indirectly owned by the
Company.
DESCRIPTION OF THE SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Securities
Guarantees which will be executed and delivered by the Company for the
benefit of the holders from time to time of Securities. Each Securities
Guarantee will be qualified as an indenture under the Trust Indenture Act.
Wilmington Trust Company will act as indenture trustee under each
Securities Guarantee for purposes of the Trust Indenture Act (the
"Guarantee Trustee"). The terms of each Securities Guarantee will be those
set forth in such Securities Guarantee and those made part of such
Securities Guarantee by the Trust Indenture Act. The summary of the
material terms of the Securities Guarantees does not purport to be complete
and is subject in all respects to the provisions of, and is qualified in
its entirety by reference to, the form of Securities Guarantee, which is
filed as an exhibit to the Registration Statement of which this Prospectus
14
forms a part, and the Trust Indenture Act. Each Securities Guarantee will
be held by the Guarantee Trustee for the benefit of the holders of the
Securities of the applicable Washington Water Power Trust.
GENERAL
Pursuant to each Securities Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full to
the holders of the Securities issued by a Washington Water Power Trust, the
Guarantee Payments (as defined herein) (except to the extent paid by such
Washington Water Power Trust), as and when due, regardless of any defense,
right of set-off or counterclaim which such Washington Water Power Trust
may have or assert. The following payments with respect to Securities
issued by a Washington Water Power Trust to the extent not paid by such
Washington Water Power Trust (the "Guarantee Payments"), will be subject to
the Securities Guarantee thereon (without duplication): (i) any accrued and
unpaid distributions which are required to be paid on such Securities, to
the extent such Washington Water Power Trust shall have funds available
therefor; (ii) the redemption price, including all accrued and unpaid
distributions (the "Redemption Price"), with respect to any Securities
called for redemption by such Washington Water Power Trust, to the extent
such Washington Water Power Trust shall have funds available therefor, and
(iii) upon a voluntary or involuntary dissolution, winding-up or
termination of such Washington Water Power Trust (other than in connection
with the distribution of Subordinated Debt Securities to the holders of
Securities or the redemption of all of the Securities), the lesser of (a)
the aggregate of the liquidation amount and all accrued and unpaid
distributions on such Securities to the date of payment and (b) the amount
of assets of such Washington Water Power Trust remaining available for
distribution to holders of such Securities in liquidation of such
Washington Water Power Trust. The redemption price and liquidation amount
will be fixed at the time the Securities are issued. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment
of the required amounts by the Company to the holders of Securities or by
causing the applicable Washington Water Power Trust to pay such amounts to
such holders.
If the Company does not make interest payments on the Subordinated Debt
Securities purchased by a Washington Water Power Trust, such Washington
Water Power Trust will not pay distributions on the Securities issued by
such Washington Water Power Trust and will not have funds available
therefor. See "Description of the Subordinated Debt Securities -- Certain
Covenants of the Company" herein. The Securities Guarantee, when taken
together with the Company's obligations under the Subordinated Debt
Securities, the Indenture, the Declaration and the Expense Agreement, will
effectively provide a full and unconditional guarantee, on a subordinated
basis, by the Company of payments due on the Securities.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Washington Water Power Trusts with respect
to the Common Securities to the same extent as the Securities Guarantees,
except that upon an Indenture Event of Default, holders of Securities shall
have priority over holders of Common Securities with respect to
distributions and payments on liquidation, redemption or otherwise.
MODIFICATION OF THE SECURITIES GUARANTEES; ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of Securities (in which case no vote will be
required), each Securities Guarantee may be amended only with the prior
approval of the holders of a majority in liquidation amount of the
outstanding Securities issued by the applicable Washington Water Power
Trust. The manner of obtaining any such approval of holders of such
Securities will be as set forth in an accompanying Prospectus Supplement
under "Description of the Securities -- Voting Rights." All guarantees and
agreements contained in a Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Company and shall
inure to the benefit of the holders of the Securities of the applicable
Washington Water Power Trust then outstanding.
TERMINATION
Each Securities Guarantee will terminate as to the Securities issued by
the applicable Washington Water Power Trust (a) upon full payment of the
Redemption Price of all Securities of such Washington Water Power Trust,
(b) upon distribution of the Subordinated Debt Securities held by such
Washington Water Power Trust to the holders of the Securities of such
Washington Water Power Trust or (c) upon full payment of the amounts
payable in accordance with the Declaration of such Washington Water Power
Trust upon liquidation of such Washington Water Power Trust. Each
Securities Guarantee will continue to be effective or will be reinstated,
15
as the case may be, if at any time any holder of Securities issued by the
applicable Washington Water Power Trust must restore payment of any sums
paid under such Securities or such Securities Guarantee.
EVENTS OF DEFAULT
An event of default under a Securities Guarantee will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder.
The holders of a majority in liquidation amount of the Securities
relating to such Securities Guarantee 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 the Securities Guarantee or to direct
the exercise of any trust or power conferred upon the Guarantee Trustee
under such Securities Guarantee. If the Guarantee Trustee fails to enforce
such Securities Guarantee, any holder of Securities relating to such
Securities Guarantee may institute a legal proceeding directly against the
Company to enforce the Guarantee Trustee's rights under such Securities
Guarantee, without first instituting a legal proceeding against the
relevant Washington Water Power Trust, the Guarantee Trustee or any other
person or entity. Notwithstanding the foregoing, if the Company has failed
to make a guarantee payment, a holder of Securities may directly institute
a proceeding against the Company for enforcement of the Securities
Guarantee for such payment. The Company waives any right or remedy to
require that any action be brought first against such Washington Water
Power Trust or any other person or entity before proceeding directly
against the Company.
The Company, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Securities Guarantees.
STATUS OF THE SECURITIES GUARANTEES
Each Securities Guarantee will constitute an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Company and (ii) pari passu with any other
Securities Guarantee and any other guarantee now or hereafter entered into
by the Company with respect to any preferred or capital securities issued
by any trust, partnership or other entity which is a financing vehicle of
the Company, except that, where an Indenture Event of Default occurs and is
continuing, the rights of holders of the Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights to payment of holders of
Securities. None of the Securities Guarantees places a limitation on the
amount of additional Senior Indebtedness that may be incurred by the
Company. The Company expects from time to time to incur additional
indebtedness constituting Senior Indebtedness. The terms of the Securities
provide that each holder of Securities issued by the applicable Washington
Water Power Trust by acceptance thereof agrees to the subordination
provisions and other terms of a Securities Guarantee relating thereto.
Each Securities Guarantee will constitute a guarantee of payment and not
of collection (that is, the guaranteed party may institute a legal
proceeding directly against the Company to enforce its rights under a
Securities Guarantee without instituting a legal proceeding against any
other person or entity).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than prior to the occurrence and after the
curing of a default with respect to a Securities Guarantee, undertakes to
perform only such duties as are specifically set forth in such Securities
Guarantee and, after default, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Notwithstanding such provisions, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by a Securities
Guarantee at the request of any holder of Securities, unless offered
reasonable indemnity against the costs, expenses and liabilities which
might be incurred thereby.
GOVERNING LAW
The Securities Guarantees will be governed by and construed in accordance
with the laws of the State of New York.
16
EXPENSE AGREEMENTS
Pursuant to the Expense Agreements entered into by the Company under the
Declarations (the "Expense Agreements"), the Company will irrevocably and
unconditionally guarantee to each person or entity to whom each Washington
Water Power Trust becomes indebted or liable, the full payment of any
costs, expenses or liabilities of such Washington Water Power Trust, other
than obligations of such Washington Water Power Trust to pay to the holders
of the related Securities or other similar interests in such Washington
Water Power Trust the amounts due such holders pursuant to the terms of
such Securities or such other similar interests, as the case may be.
EFFECT OF OBLIGATIONS UNDER THE
SUBORDINATED DEBT SECURITIES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of each of the
Washington Water Power Trusts is to issue the Trust Securities evidencing
undivided beneficial interests in the assets of each of the Washington
Water Power Trusts and to invest the proceeds from such issuance and sale
in the Subordinated Debt Securities.
As long as payments of interest and other payments are made when due on
the Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the
following factors: (i) the aggregate principal amount of Subordinated Debt
Securities will be equal to the aggregate stated liquidation amount of the
Trust Securities; (ii) the interest rate and the interest and other payment
dates on the Subordinated Debt Securities will be correlative to the
distribution rate and distribution and other payment dates for the
Securities; (iii) the Company shall pay, and the applicable Washington
Water Power Trust shall not be obligated to pay, directly or indirectly,
all costs, expenses, debt and obligations of the applicable Washington
Water Power Trust (other than to the holders of Trust Securities); and (iv)
the Declaration further provides that the Washington Water Power Trustees
shall not take or cause or permit the applicable Washington Water Power
Trust to, among other things, engage in any activity that is not consistent
with the purposes of the applicable Washington Water Power Trust.
Payments of distributions and other payments due on the Securities (each,
to the extent funds therefor are available) are guaranteed by the Company
as and to the extent set forth above under "Description of the Securities
Guarantees." If the Company does not make interest payments on the
Subordinated Debt Securities purchased by the applicable Washington Water
Power Trust, it is expected that the applicable Washington Water Power
Trust will not have sufficient funds to pay distributions on the
Securities. The Guarantee does not apply to any payment of distributions
unless and until the applicable Washington Water Power Trust has sufficient
funds for the payment of such distributions. The Guarantee covers the
payment of distributions and other payments on the Securities only if and
to the extent that the Company has made a payment of interest or principal
on the Subordinated Debt Securities held by the applicable Washington Water
Power Trust as its only assets. The Guarantee, when taken together with the
Company's obligations under the Subordinated Debt Securities, the
Indenture, the Declaration and the Expense Agreement, effectively provides
a full and unconditional guarantee, on a subordinated basis, of amounts on
the Securities.
If the Company fails to make interest or other payments on the
Subordinated Debt Securities when due (taking account of any Extension
Period), the Declaration provides a mechanism whereby the holders of the
Securities, using the procedures described in "Description of the
Securities -- Voting Rights" in an accompanying Prospectus Supplement, may
direct the Institutional Trustee to enforce its rights under the
Subordinated Debt Securities. If the Institutional Trustee fails to enforce
its rights under the Subordinated Debt Securities, a holder of Securities
may institute a legal proceeding against the Company to enforce the
Institutional Trustee's rights under the Subordinated Debt Securities
without first instituting any legal proceeding against the Institutional
Trustee or any other person or entity. Notwithstanding the foregoing, if a
Declaration Event of Default has occurred and is continuing and such event
is attributable to the failure of the Company to pay interest or principal
on the Subordinated Debt Securities on the date such interest or principal
is otherwise payable (or in the case of redemption on the redemption date),
then a holder of Securities may institute a Direct Action for payment on or
after the respective due date specified in the Subordinated Debt
Securities. In connection with such Direct Action, the Company will be
subrogated to the rights of such holder of Securities under the Declaration
to the extent of any payment made by the Company to such holder of
Securities in such Direct Action. The Company, under the Guarantee,
acknowledges that the Securities Guarantee Trustee shall enforce the
Securities Guarantee on behalf of the holders of the Securities. If the
17
Company fails to make payments under the Securities Guarantee, the
Securities Guarantee provides a mechanism whereby the holders of the
Securities may direct the Securities Guarantee Trustee to enforce its
rights thereunder. Any holder of Securities may institute a legal
proceeding directly against the Company to enforce the Securities Guarantee
Trustee's rights under the Securities Guarantee without first instituting a
legal proceeding against the applicable Washington Water Power Trust, the
Securities Guarantee Trustee, or any other person or entity.
The Company and each of the Washington Water Power Trusts believe that
the above mechanisms and obligations, taken together, effectively provide a
full and unconditional guarantee, on a subordinated basis, by the Company
of payments due on the Securities. See "Description of the Securities
Guarantees -- General" herein.
PLAN OF DISTRIBUTION
The Company may sell the Subordinated Debt Securities and any Washington
Water Power Trust may sell Securities in any of, or any combination of, the
following ways: (i) directly to purchasers, (ii) through agents, (iii)
through underwriters and (iv) through dealers.
Offers to purchase Offered Securities may be solicited directly by the
Company and/or any Washington Water Power Trust, as the case may be, or by
agents designated by the Company and/or any Washington Water Power Trust,
as the case may be, from time to time. Any such agent, who may be deemed to
be an underwriter as that term is defined in the Securities Act, involved
in the offer or sale of the Offered Securities in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement, any such agency
will be acting on a best efforts basis for the period of its appointment
(ordinarily five business days or less). Agents, dealers and underwriters
may be customers of, engage in transactions with, or perform services for
the Company in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale, the Company
will execute an underwriting agreement with such underwriters at the time
of sale to them and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement, which will be
used by the underwriters to make releases of the Offered Securities in
respect of which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Offered Securities in respect
of which this Prospectus is delivered, the Company and/or any Washington
Water Power Trust, as the case may be, will sell such Offered Securities to
the dealer, as principal. The dealer may then resell such Offered
Securities to the public at varying prices to be determined by such dealer
at the time of resale. The name of the dealer and the terms of the
transaction will be set forth in the Prospectus Supplement.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by the Company and/or any Washington Water
Power Trust, as the case may be, against certain liabilities, including
liabilities under the Securities Act.
The place and time of delivery for the Offered Securities in respect of
which this Prospectus is delivered will be set forth in the Prospectus
Supplement.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the
Securities, the enforceability of the Declarations and the creation of the
Washington Water Power Trusts will be passed upon on behalf of the
Washington Water Power Trusts by Richards, Layton & Finger, P.A.,
Wilmington, Delaware, special Delaware counsel to the Company and the
Washington Water Power Trusts. Certain matters of New York law and of
federal securities laws relating to the validity of the Subordinated Debt
Securities and the Securities Guarantees and certain matters relating
thereto will be passed upon for the Company by Reid & Priest LLP, New York,
New York, counsel to the Company. Certain matters of Washington corporate
law and of public utility regulatory approvals under Washington, Idaho,
Montana, Oregon and California law relating to the authorization of the
Subordinated Debt Securities and the Securities Guarantees will be passed
upon for the Company by Paine, Hamblen, Coffin, Brooke & Miller LLP,
Spokane, Washington, general counsel for the Company. Certain United
States federal income taxation matters will be passed upon for the Company
and the Washington Water Power Trusts by Reid & Priest LLP, special tax
18
counsel to the Company and the Washington Water Power Trusts. The validity
of the Offered Securities will be passed upon for the underwriters by
Sullivan & Cromwell, New York, New York. In giving their opinions Reid &
Priest LLP and Sullivan & Cromwell may assume the conclusions of
Washington, California, Idaho, Montana and Oregon law set forth in the
opinion of Paine, Hamblen, Coffin, Brooke & Miller LLP and the conclusions
of Delaware law set forth in the opinion of Richards, Layton & Finger, P.A.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from the Company's Latest
Annual Report on Form 10-K have been audited by Deloitte & Touche LLP,
independent auditors, as stated in, and for the periods set forth in, their
reports which are incorporated herein by reference and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
19
=================================== ===================================
NO DEALER, SALESPERSON OR OTHER
INDIVIDUAL HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED OR INCORPORATED IN THIS
PROSPECTUS SUPPLEMENT AND PROSPECTUS ----------------
IN CONNECTION WITH THE OFFER MADE BY SECURITIES
THIS PROSPECTUS SUPPLEMENT AND
PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS WASHINGTON WATER
MUST NOT BE RELIED UPON AS HAVING POWER CAPITAL I
BEEN AUTHORIZED BY THE COMPANY, THE
TRUST OR ANY OF THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND PROSPECTUS
NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL, UNDER ANY ___ % _______ SECURITIES,
CIRCUMSTANCES, CREATE ANY SERIES A
IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY FULLY AND UNCONDITIONALLY
OR THE TRUST SINCE THE DATE HEREOF. GUARANTEED BY
THIS PROSPECTUS SUPPLEMENT AND
PROSPECTUS DO NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN
ANY STATE IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR
IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT THE WASHINGTON WATER
QUALIFIED TO DO SO OR TO ANYONE TO POWER COMPANY
WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION.
---------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
THE WASHINGTON WATER POWER
COMPANY SELECTED HISTORICAL
FINANCIAL INFORMATION . . . . . 4 --------------------
RISK FACTORS . . . . . . . . . . 5
THE WASHINGTON WATER POWER PROSPECTUS SUPPLEMENT
COMPANY . . . . . . . . . . . . 8
WASHINGTON WATER POWER CAPITAL . 8 ---------------------
ACCOUNTING TREATMENT . . . . . . 9
CAPITALIZATION . . . . . . . . . 9
USE OF PROCEEDS . . . . . . . . . 9
DESCRIPTION OF THE SECURITIES . . 10
DESCRIPTION OF THE SUBORDINATED
DEBT SECURITIES . . . . . . . . 18
CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSIDERATIONS . . . 21
UNDERWRITING . . . . . . . . . . 24
PROSPECTUS MERRILL LYNCH & CO.
AVAILABLE INFORMATION . . . . . . 3
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE . . . . 3
THE TRUSTS . . . . . . . . . . . 4
USE OF PROCEEDS . . . . . . . . . 5
DESCRIPTION OF THE SUBORDINATED
DEBT SECURITIES . . . . . . . . 5
DESCRIPTION OF THE SECURITIES . . 13
DESCRIPTION OF THE SECURITIES
GUARANTEES . . . . . . . . . . 14 __________, 199__
EFFECT OF OBLIGATIONS UNDER THE
SUBORDINATED DEBT SECURITIES
AND THE GUARANTEE . . . . . . . 17
PLAN OF DISTRIBUTION . . . . . . 18
LEGAL MATTERS . . . . . . . . . . 18
EXPERTS . . . . . . . . . . . . . 19
=================================== ===================================
PART II
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Seventh of the Company's Restated Articles of Incorporation
("Articles") provides, in part, as follows:
"The Corporation shall, to the full extent permitted by applicable law,
as from time to time in effect, indemnify any person made a party to, or
otherwise involved in, any proceeding by reason of the fact that he or she
is or was a director of the Corporation against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by him or her
in connection with any such proceeding. The Corporation shall pay any
reasonable expenses incurred by a director in connection with any such
proceeding in advance of the final determination thereof upon receipt from
such director of such undertakings for repayment as may be required by
applicable law and a written affirmation by such director that he or she
has met the standard of conduct necessary for indemnification, but without
any prior determination, which would otherwise be required by Washington
law, that such standard of conduct has been met. The Corporation may enter
into agreements with each director obligating the Corporation to make such
indemnification and advances of expenses as are contemplated herein.
Notwithstanding the foregoing, the Corporation shall not make any
indemnification or advance which is prohibited by applicable law. The
rights to indemnity and advancement of expenses granted herein shall
continue as to any person who has ceased to be a director and shall inure
to the benefit of the heirs, executors and administrators of such a
person."
The Company has entered into indemnification agreements with each
director as contemplated in Article Seventh of the Articles.
Reference is made to Revised Code of Washington 23B.08.510, which sets
forth the extent to which indemnification is permitted under the laws of
the State of Washington.
Article IX of the Company's Bylaws contains an indemnification provision
similar to that contained in the Articles and, in addition, provides in
part as follows:
"SECTION 2. LIABILITY INSURANCE. The Corporation shall have the power to
purchase and maintain insurance on behalf of any person who is, or was a
director, officer, employee, or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan against any liability asserted against
him and incurred by him in any such capacity or arising out of his status
as such, whether or not the Corporation would have the power to indemnify
him against such liability under the laws of the State of Washington."
Insurance is maintained on a regular basis (and not specifically in
connection with this offering) against liabilities arising on the part of
directors and officers out of their performance in such capacities or
arising on the part of the Company out of its foregoing indemnification
provisions, subject to certain exclusions and to the policy limits.
Section 10.4 of each Declaration provides with respect to the Trust
established thereby that:
(a) (i) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person (as defined therein) who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right
of such Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of such Trust,
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or
II-1
upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of such Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Company shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of such Trust to procure a judgment in
its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses) actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of such Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to such Trust
unless and only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of Section 10.4(a), or in defense of any claim,
issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of Section
10.4(a) (unless ordered by a court) shall be made by the Company only as
authorized in the specific case upon a determination that indemnification
of the Company Indemnified Person is proper in the circumstances because
he has met the applicable standard of conduct set forth in paragraphs (i)
and (ii). Such determination shall be made (1) by the respective Regular
Trustees by a majority vote of a quorum consisting of such Regular
Trustees who were not parties to such action, suit or proceeding, (2) if
such a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the holders of the Common Securities.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of Section 10.4(a) shall be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled
to indemnified by the Company as authorized in Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Company if
a determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular
Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion or (iii) the Common
Security holder of such Trust, that, based upon the facts known to the
Regular Trustees, counsel or the Common Security holder at the time such
determination is made, such Company Indemnified Person acted in bad faith
or in a manner that such person did not believe to be in or not opposed
to the best interests of such Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall
any advance be made in instances where the Regular Trustees, independent
legal counsel or holders of the Common Securities reasonably determine
that such person deliberately breached his duty to such Trust or the
holders of the Securities.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of Section 10.4(a) shall not be
deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
II-2
agreement, vote of stockholders or disinterested directors of the Company
or vote of holders of Securities or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under Section 10.4(a) shall be
deemed to be provided by a contract between the Company and each Company
Indemnified Person who serves in such capacity at any time while Section
10.4(a) is in effect. Any repeal or modification of Section 10.4(a)
shall not affect any rights or obligations then existing.
(vii) The Company or such Trust may purchase and maintain insurance
on behalf of any person who is or was a Company Indemnified Person
against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
Company would have the power to indemnify him against such liability
under the provisions of Section 10.4(a).
(viii) For purposes of Section 10.4(a), references to the "Trust"
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed
in a merger, consolidation, amalgamation or other business combination so
that any person who is or was a director, trustee, officer or employee of
such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of
another entity, shall stand in the same position under the provisions of
Section 10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate
existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Company agrees to indemnify (i) the Institutional Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate (as defined in the
respective Declaration) of the Institutional Trustee and the Delaware
Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of
the Institutional Trustee and the Delaware Trustee (each of the Persons
in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless
against, any and all loss, liability, damage, claim or expense including
taxes (other than taxes based on the income of such Fiduciary Indemnified
Person) incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against or investigating any
claim or liability in connection with the exercise or performance of any
of its powers or duties hereunder.
The obligation to indemnify as set forth in each respective Section
10.4(b) shall survive the satisfaction and discharge of the Declarations.
Section 8.2 of each Securities Guarantee provides with respect to the
related Trust that:
The Company agrees to indemnify each Indemnified Person (as defined
therein) for, and to hold each Indemnified Person harmless against, any
and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts thereunder,
including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its
powers or duties thereunder.
The obligation to indemnify as set forth in each respective Section
8.2 shall survive the termination of the Securities Guarantees.
ITEM 16. EXHIBITS
Reference is made to the Exhibit Index on p. II-6 hereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Spokane and State of Washington on the 7th
day of January, 1997.
THE WASHINGTON WATER POWER COMPANY
By /s/ J.E. Eliassen
-------------------------------
J.E. Eliassen
Senior Vice President and Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
Signature Title Date
--------- ----- ----
* Principal January 7, 1997
-------------------------------- Executive
Paul A. Redmond Officer
(Chairman of the Board and Chief and Director
Executive Officer)
/s/ J.E. Eliassen Principal January 7, 1997
-------------------------------- Financial and
J.E. Eliassen Accounting
(Senior Vice President Officer
and Chief Financial Officer)
* Director January 7, 1997
--------------------------------
David A. Clack
* Director January 7, 1997
--------------------------------
Duane B. Hagadone
* Director January 7, 1997
--------------------------------
Eugene W. Meyer
* Director January 7, 1997
--------------------------------
General H. Norman Schwarzkopf
* Director January 7, 1997
--------------------------------
B. Jean Silver
* Director January 7, 1997
--------------------------------
Larry A. Stanley
* Director January 7, 1997
--------------------------------
R. John Taylor
* By J.E. Eliassen
--------------------------------
J.E. Eliassen (Attorney-in-Fact)
=======================================================================
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Washington
Water Power Capital I, Washington Water Power Capital II and Washington
Water Power Capital III have duly caused the Registration Statement to be
signed on their behalf by the undersigned, thereunto duly authorized, in
the City of Spokane and State of Washington on the 7th day of January,
1997.
WASHINGTON WATER POWER CAPITAL I
By: THE WASHINGTON WATER POWER COMPANY, as Sponsor
By: /s/ Lawrence J. Pierce
-------------------------------------
Lawrence J. Pierce
Vice President and Treasurer
WASHINGTON WATER POWER CAPITAL II
By: THE WASHINGTON WATER POWER COMPANY, as Sponsor
By: /s/ Lawrence J. Pierce
-------------------------------------
Lawrence J. Pierce
Vice President and Treasurer
WASHINGTON WATER POWER CAPITAL III
By: THE WASHINGTON WATER POWER COMPANY, as Sponsor
By: /s/ Lawrence J. Pierce
-------------------------------------
Lawrence J. Pierce
Vice President and Treasurer
II-5
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
1(a) Form of Underwriting Agreement for offering of Securities.
4(a)-7 Form of Amended and Restated Declaration of Trust for
Washington Water Power Capital I.
4(a)-8 Form of Amended and Restated Declaration of Trust for
Washington Water Power Capital II.
4(a)-9 Form of Amended and Restated Declaration of Trust for
Washington Water Power Capital III.
4(a)-10 Form of Indenture between The Washington Water Power Company
and Wilmington Trust Company, as Trustee.
4(a)-11 Form of Officer's Certificate to be used in connection with
the issuance of Subordinated Debt Securities and Securities.
4(a)-12 Form of Security (included in 4(a)-7, 4(a)-8 and 4(a)-9
above).
4(a)-13 Form of Subordinated Debt Security (included in 4(a)-11
above).
4(a)-14 Form of Securities Guarantee issued by The Washington Water
Power Company for the benefit of the holders of Securities
of Washington Water Power Capital I.
4(a)-15 Form of Securities Guarantee issued by The Washington Water
Power Company for the benefit of the holders of Securities
of Washington Water Power Capital II.
4(a)-16 Form of Securities Guarantee issued by The Washington Water
Power Company for the benefit of the holders of Securities
of Washington Water Power Capital III.
4(a)-17 Form of Agreement as to Expenses and Liabilities between The
Washington Water Power Company and Washington Water Power
Capital I.
4(a)-18 Form of Agreement as to Expenses and Liabilities between The
Washington Water Power Company and Washington Water Power
Capital II.
4(a)-19 Form of Agreement as to Expenses and Liabilities between The
Washington Water Power Company and Washington Water Power
Capital III.
II-6
Exhibit 1(a)
Securities
---------
WASHINGTON WATER POWER CAPITAL I
(a Delaware Trust)
% Securities,
-- ---------
Series A
(Liquidation Amount of $ Per Security)
---
UNDERWRITING AGREEMENT
----------------------
, 199
----------- -
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
as Representative of the several Underwriters
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Washington Water Power Capital I (the "Trust"), a statutory
business trust created under the Business Trust Act (the "Delaware Act") of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del.
C. Sections 3801 et seq.), and The Washington Water Power Company, a
-- ---
Washington corporation (the "Company" and, together with the Trust, the
"Offerors") confirm their agreement (the "Agreement") with Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any
underwriter substituted as hereinafter provided in Section 11 hereof), for
whom Merrill Lynch is acting as representative (in such capacity, Merrill
Lynch shall hereinafter be referred to as the "Representative"), with
respect to the sale by the Trust and the purchase by the Underwriters,
acting severally and not jointly, of the respective numbers of %
--
Securities (liquidation amount of $___ per security) of the
---------
Trust ("Securities") set forth in said Schedule A. The Securities will be
guaranteed by the Company with respect to distributions and payments upon
liquidation, redemption and otherwise (the "Securities Guarantee") pursuant
to the Securities Guarantee Agreement (the "Securities Guarantee
Agreement"), dated as of , , between the Company and
--------- ----
Wilmington Trust Company, as trustee (the "Guarantee Trustee"), and
entitled to the benefits of certain backup undertakings described in the
Prospectus (as defined herein) with respect to the Company's agreement
pursuant to the Declaration (as defined herein) to pay all expenses
relating to the administration of the Trust. In certain circumstances, the
Trust may distribute Subordinated Debt Securities (as defined herein) to
holders of the Securities. The Securities and the related Securities
Guarantee are referred to herein as the "Trust Securities".
The Offerors understand that the Underwriters propose to make a
public offering of the Trust Securities. The entire proceeds from the sale
of the Trust Securities will be combined with the entire proceeds from the
sale by the Trust to the Company of its common securities (the "Common
Securities"), as guaranteed by the Company, to the extent set forth in the
Prospectus, with respect to distributions and payments upon liquidation and
redemption (the "Common Securities Guarantee" and, together with the
Securities Guarantee, the "Guarantees") pursuant to the Common Securities
Guarantee Agreement (the "Common Securities Guarantee Agreement" and,
together with the Securities Guarantee Agreement, the "Guarantee
Agreements"), dated as of , , of the Company, and will be used
--------- ----
by the Trust to purchase the $ of % Subordinated Debt
----------- --
Securities, Series A (the "Subordinated Debt Securities") issued by the
Company. The Securities and the Common Securities will be issued pursuant
to the Amended and Restated Declaration of Trust of the Trust, dated as of
, (the "Declaration"), among the Company, as Sponsor,
---------- ----
and (the "Regular Trustees") and Wilmington Trust
---------- ----------
Company, a Delaware banking corporation, as Delaware trustee (the "Delaware
Trustee) and as institutional trustee (the "Institutional Trustee" and,
together with the Regular Trustees and the Delaware Trustee, the
"Trustees"). The Subordinated Debt Securities will be issued pursuant to
an indenture, dated as of , (the "Indenture"), between the
---------, ----
Company and Wilmington Trust Company, as Trustee (the "Debt Trustee").
Section 1. Representations and Warranties of the Offerors.
----------------------------------------------
The Offerors jointly and severally represent and warrant to, and
agree with, each of the several Underwriters that:
(a) The Offerors have carefully prepared in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"),
and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") promulgated
thereunder, and have filed with the Commission, a registration
statement on Form S-3 (File Nos. 333- and 333- ) for the
------ -------
registration of $150,000,000 in aggregate amount of a combination of
the Company's and the Trust's securities, including the Trust
Securities and the Subordinated Debt Securities, and such Registration
Statement has become effective. A prospectus supplement setting forth
the terms of the Securities and the Subordinated Debt Securities and
of their sale and distribution (the "Prospectus Supplement") has been
or will be so prepared and will be filed or transmitted for filing
pursuant to Rule 424 under the Act. The Registration Statement
(including exhibits) in the form in which it became effective, and as
amended to the date hereof, is herein referred to as a "Registration
Statement"; the prospectus included as a part of the Registration
Statement, as such prospectus may have been amended to the date
hereof, is hereinafter referred to as the "Basic Prospectus"; and the
Basic Prospectus, as supplemented by the Prospectus Supplement, is
herein referred to as the "Prospectus"; provided, however, that (i)
-------- -------
any reference herein to the terms "Registration Statement", "Basic
Prospectus", "Prospectus" or "Prospectus Supplement" shall be deemed
to refer to and include the documents incorporated therein by
reference pursuant to Item 12 of Form S-3 under the Act and the
information, if any, deemed to be part thereof pursuant to Rule
430A(b) of the Rules and Regulations, (ii) any reference to any
amendment or supplement to the Prospectus shall be deemed to refer to
and include any documents filed after the date of the Prospectus
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and so
incorporated by reference (all of such documents so incorporated by
reference referred to in clause (i) above and this clause (ii) being
hereinafter referred to as the "Incorporated Documents"), (iii) if any
revised prospectus shall be provided to the Underwriters for use in
connection with the offering of the Trust Securities which differs
from the prospectus on file with the Commission at the time the
Registration Statement became effective, the term "Prospectus" shall
refer to such revised prospectus from and after the time it is first
provided to the Underwriters for such use, and (iv) no prospectus
supplement to the Basic Prospectus which relates to securities of the
Company or the Trust other than the Trust Securities or the
Subordinated Debt Securities shall be deemed to be a part of the Basic
Prospectus or the Prospectus. The Offerors qualify for use of Form S-
3 for the registration of the securities.
(b) No order has been issued by the Commission preventing or
suspending the use of any prospectus relating to the Trust Securities;
and the Registration Statement when it became effective, and the
Prospectus and any amendment or supplement thereto, when filed or
transmitted for filing with the Commission and at the Closing Time (as
defined herein), complied or will comply in all material respects with
the applicable provisions of the Act, the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and the applicable Rules
and Regulations and did not or will not include an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the Offerors make no representations or
-------- -------
warranties as to (i) information contained in or omitted from the
Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information
furnished in writing to the Offerors by any Underwriter, through the
Representative, specifically for use in the preparation thereof or
(ii) that part of the Registration Statement which shall constitute
the Statement of Eligibility (Form T-1) under the Trust Indenture Act.
(c) The Incorporated Documents, when they were filed with the
Commission, complied in all material respects with the applicable
requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder, and none of such documents
included an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and any additional Incorporated Documents,
when they are filed with the Commission, will comply in all material
respects with the applicable requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder and will
not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
are made, not misleading; provided, however, that the Offerors make no
-------- -------
representations or warranties as to information contained in or
omitted from any such documents in reliance upon and in conformity
with information furnished in writing to the Offerors by any
Underwriter, through the Representative, specifically for use in the
preparation thereof.
(d) The financial statements included in the Registration
Statement and Prospectus present fairly the financial condition of the
Company as of the dates indicated and the results of its operations
and its cash flows for the periods indicated. Except as may be
specifically mentioned in the Registration Statement and Prospectus,
said financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis. Deloitte & Touche LLP, who has audited certain of said
financial statements, are independent public accountants with respect
to the Company as required by the Act and the Rules and Regulations.
(e) Except as set forth in or contemplated by the Prospectus,
(i) since the date as of which information is given in the Prospectus
there has not been any material adverse change in the condition of the
Trust or the Company and its subsidiaries as a whole, financial or
otherwise, (ii) since the date of the Prospectus there has not been
any transaction entered into by the Trust or the Company or any
subsidiary of the Company which is material to the Trust or to the
Company and its subsidiaries as a whole other than transactions in the
ordinary course of business, and (iii) none of the Trust or the
Company or any of the subsidiaries of the Company has any contingent
obligation which is material to the Trust or the Company and its
subsidiaries as a whole.
(f) The Securities to be issued and sold by the Trust hereunder
conform in all material respects, or will when issued so conform, to
the description thereof in the Prospectus and have been, or when
issued as contemplated hereby and in the Declaration will be, duly
authorized and validly issued, and, when so issued will be, subject to
the terms of the Declaration, fully paid and non-assessable undivided
beneficial interests in the assets of the Trust and will be entitled
to the benefits of the Declaration. The issuance of the Securities is
not subject to preemptive or other similar rights.
(g) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act, with power
and authority to own its properties and conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement and the Declaration. The Trust has
no subsidiaries and has been duly qualified for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which qualification is required, except where the
failure to so qualify would not have a material adverse effect on the
Trust. The Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus. The Trust is
and will be treated as a consolidated subsidiary of the Company
pursuant to generally accepted accounting principles. The Trust is
and will be classified for United States federal income tax purposes
as a grantor trust and not as an association taxable as a corporation.
(h) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Washington, with corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus, to enter into and perform its obligations under this
Agreement, the Declaration, the Indenture and each of the Guarantees
and to purchase and hold the Common Securities, and the Company has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which qualification is required, except where the
failure to so qualify would not have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(i) Each of Pentzer Corporation, Washington Irrigation &
Development Company, WWP Energy Solutions, Inc. and WWP Resource
Services, Inc. is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction with corporate
power and authority under such laws to own, lease and operate its
properties and conduct its business.
(j) The Indenture has been and will at the Closing Time be, duly
authorized by the Company and qualified under the Trust Indenture Act
and at Closing Time will have been duly executed and delivered by the
Company and, assuming due authorization, execution and delivery
thereby by the Debt Trustee, the Indenture will constitute a valid and
legally binding instrument, enforceable in accordance with its terms,
except to the extent the enforcement of the Indenture may be limited
by any applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors' rights
generally, by general principles of equity (whether asserted in an
action in equity or at law) and by rules of law governing specific
performance, injunctive relief, foreclosure, receivership and other
equitable remedies; and the Indenture will conform in all material
respects to the description thereof contained in the Prospectus.
(k) The Subordinated Debt Securities have been duly authorized,
and when issued and delivered pursuant to this Indenture, and duly
authenticated by the Debt Trustee pursuant to the Indenture, will have
been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture and enforceable in
accordance with their terms, except to the extent the enforcement of
the Subordinated Debt Securities may be limited by any applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other laws affecting creditors' rights generally, by
general principles of equity (whether asserted in an action in equity
or at law) and by rules of law governing specific performance,
injunctive relief, foreclosure, receivership and other equitable
remedies; and the Subordinated Debt Securities will conform in all
material respects to the description thereof contained in the
Prospectus.
(l) The Declaration has been and will at the Closing Time be,
duly authorized by the Company and qualified under the Trust Indenture
Act and at Closing Time will have been duly executed and delivered by
the Company and the Regular Trustees, and assuming due authorization,
execution and delivery thereof by the Delaware Trustee and by the
Institutional Trustee, the Declaration will, at Closing Time, be a
valid and legally binding instrument enforceable against the Company
and the Regular Trustees in accordance with its terms, except to the
extent the enforcement of the Declaration may be limited by any
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors' rights
generally, by general principles of equity (whether asserted in an
action in equity or at law) and by rules of law governing specific
performance, injunctive relief, foreclosure, receivership and other
equitable remedies; and the Declaration will conform in all material
respects to the description thereof contained in the Prospectus.
(m) Each of the Guarantee Agreements has been and will at the
Closing Time be, duly authorized by the Company and, in the case of
the Securities Guarantee, qualified under the Trust Indenture Act and,
when executed and delivered by the Company and the Guarantee Trustee
(as appropriate), will constitute valid and legally binding
instruments, enforceable against the Company in accordance with its
terms, except to the extent enforcement of the Guarantee Agreements
may be limited by any applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws affecting
creditors' rights generally, by general principles of equity (whether
asserted in an action in equity or at law) and by rules of law
governing specific performance, injunctive relief, foreclosure,
receivership and other equitable remedies; each of the Guarantees and
the Guarantee Agreements will conform in all material respects to the
descriptions thereof contained in the Prospectus.
(n) The Common Securities to be issued and delivered by the
Trust to the Company against payment therefor as described in the
Registration Statement and Prospectus conform in all material
respects, or will when issued so conform, to the description thereof
in the Prospectus, and have been, or when issued as contemplated by
the Declaration will be, duly authorized and validly issued and, when
so issued, subject to the terms of the Declaration, will be fully paid
and nonassessable undivided beneficial interests in the assets of the
Trust. The issuance of the Common Securities is not subject to
preemptive or other similar rights; and at Closing Time all of the
issued and outstanding Common Securities of the Trust will be directly
owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(o) Each of the Regular Trustees of the Trust is an employee of
the Company and has been duly authorized by the Company to execute and
deliver the Declaration.
(p) The Trust is not in violation of the Declaration or its
certificate of trust, filed with the Secretary of State of the State
of Delaware on November 4, 1996 (the "Certificate of Trust"). The
execution, delivery and performance by the Company and the Trust of
their respective obligations under this Agreement, the Declaration,
the Securities, the Common Securities, the Indenture, the Subordinated
Debt Securities and the Guarantee Agreements and the consummation of
the transactions contemplated herein and therein and compliance by the
Offerors with their respective obligations hereunder and thereunder
will not result in a breach or violation of any terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or the Trust is a party or by which the Company or the Trust
is bound or which any of the property or assets of the Company or the
Trust are subject, nor will such action result in any violation of the
provisions of any statute or the Restated Articles of Incorporation,
as amended, of the Company, or the Bylaws, as amended, of the Company
or the Certificate of Trust or the Declaration or, to the best of the
Company's and the Trust's knowledge, information or belief, any order,
rule or regulation of any court or any federal or state regulatory
authority or other governmental agency or body having jurisdiction
over the Company or the Trust or any of their properties;
(q) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
(r) The Company has filed or will file with the Washington
Utilities and Transportation Commission, the California Public
Utilities Commission, the Idaho Public Utilities Commission and the
Public Utility Commission of Oregon appropriate applications and any
required amendment or amendments thereto for orders authorizing the
issuance and sale of the Securities Guarantee and the Subordinated
Debt Securities on the terms set forth in or contemplated by this
Agreement; and no other consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body is required for the offering, issuance or sale of the
Common Securities, the Securities, Subordinated Debt Securities or the
Guarantee Agreements hereunder or the consummation by the Company and
the Trust of the other transactions contemplated by this Agreement,
except such as have been, or will have been prior to the Closing Time,
obtained under the Act or the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws.
(s) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or to which any property
of the Company or any of its subsidiaries is subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(t) None of the Offerors is and, after giving effect to the
offering and sale of the Securities, will be, an "investment company"
or an entity "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended.
Section 2. Sale and Purchase.
-----------------
On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the
Trust agrees to sell to each Underwriter, severally and not jointly, and
each Underwriter, severally and not jointly, agrees to purchase from the
Trust, the number of Securities set forth in Schedule A opposite the name
of such Underwriter, plus any additional number of Securities that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 11 hereof, at the price per security set forth in Schedule B
hereto.
Section 3. Delivery and Payment.
--------------------
Certificates for the Securities will be delivered to the
Representative for the accounts of the several Underwriters at the offices
of Reid & Priest LLP, 40 West 57th Street, New York, N.Y., against payment
of the purchase price therefor by certified or official bank check, payable
to the order of the Trust in New York Clearing House funds or similar next
day funds, at 10:00 A.M., New York time, on the date specified in Schedule
B hereto (or if the New York and American Stock Exchanges and commercial
banks in the City of New York are not open on such day, the next day on
which such exchanges and banks are open), or at such other time not later
than eight full business days thereafter as the Representative and the
Offerors determine. The hour and date of such delivery and payment are
hereinafter called the "Closing Time".
Certificates for the Securities shall be in definitive form and
registered in such names and denominations as the Representative may
request in writing not later than 10:00 A.M., New York time, on the second
full business day prior to the Closing Time or, if no such instructions
shall have been received by that time, in the names of the several
Underwriters in such authorized denominations as the Offerors may
determine.
The certificates for the Securities shall be delivered to the
Representative through the facilities of the Depository Trust Company in
New York, New York ("DTC") for the account of the Representative against
payment of the purchase price therefor. For the purpose of expediting the
checking and packaging of the certificates evidencing the Securities by the
Representative on behalf of the several Underwriters, the Offerors agree to
make such certificates available to the Representative for such purpose at
the offices of DTC, not later than 2:00 P.M., New York time, on the first
full business day prior to the Closing Date.
It is understood that the person, firm or corporation acting as
the Representative, individually and not as the Representative of the
several Underwriters, may (but shall not be obligated to) make payment to
the Offerors on behalf of any Underwriter whose check shall not have been
received by the Representative at the time of delivery of the Securities to
be purchased by such Underwriter. No such payment by such person, firm or
corporation shall relieve any such Underwriter of any of its obligations
hereunder.
At the Closing Time, the Trust agrees to pay, or cause to be
paid, a commission payable at such time to the Underwriters in an amount
specified in Schedule B hereto by or certified or official bank check or
checks payable to Merrill Lynch, Pierce, Fenner & Smith Incorporated in New
York Clearing House funds or other similar next day funds.
Section 4. Covenants of the Offerors.
-------------------------
Each of the Offerors jointly and severally covenant with each
Underwriter:
(a) At the earliest practicable time after the execution of this
Agreement, to file or transmit for filing the Prospectus Supplement
with the Commission pursuant to Rule 424 of the Rules and Regulations
and to notify the Representative by telephone promptly after the
Prospectus Supplement has been so filed or transmitted for filing; and
to notify the Representative by telephone, promptly after they shall
receive notice thereof, of the time when any amendment to the
Registration Statement has become effective or any supplement to the
Prospectus has been filed with the Commission or transmitted for
filing. The Company will timely file all documents required to be
filed by the Company with the Commission pursuant to the Exchange Act
subsequent to the effective date of the Registration Statement and for
so long as the delivery of a Prospectus is required in connection with
the offering or sale of the Trust Securities. The Offerors will not
file any amendment or supplement to the Registration Statement or the
Prospectus to which the Representative shall reasonably object by
notice to the Offerors after having been furnished with copies a
reasonable time prior to filing.
(b) To give the Representative immediate advice, and to confirm
the advice in writing, of any request received by the Offerors from
the Commission for amendment of the Registration Statement or
supplements to the Prospectus or for additional information with
respect thereto, and of the institution by the Commission of any
proceedings for, or any issuance by the Commission of, a stop order
suspending the effectiveness of the Registration Statement, and to
make every reasonable effort to prevent the issuance of any such stop
order or to obtain the prompt withdrawal of any such stop order which
may be issued.
(c) To deliver to the Representative, at or before the Closing
Time, one signed copy of the Registration Statement as initially filed
and of each amendment thereto including all exhibits filed therewith
or incorporated therein by reference and not previously furnished and
of the Incorporated Documents and to furnish to the Representative
upon request, at the earliest practicable time following the filing
thereof, such number of conformed copies of the Registration Statement
as initially filed and of each amendment or supplement thereto without
exhibits for each of the Underwriters.
(d) To furnish the Underwriters through or upon the order of the
Representative, with copies of the Prospectus in such quantities as
the Representative may from time to time reasonably request, and if
the delivery of a Prospectus is required at any time prior to the
expiration of nine months after the effective date of the Registration
Statement and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or if for any other reason it
shall be necessary to amend or supplement the Prospectus in order to
comply with the Act, promptly to notify the Representative and upon
request of the Representative to amend or supplement the Prospectus by
either (i) preparing and furnishing without charge to each Underwriter
and to any dealer in securities, upon the order of the Representative,
as many copies as the Representative may from time to time reasonably
request of an amended Prospectus or a supplement to be attached to or
furnished with the Prospectus or (ii) making an appropriate filing
pursuant to Section 13 or 14 of the Exchange Act, which, in the case
of both clauses (i) and (ii), will correct such statement or omission
or effect such compliance, provided that should such event relate
solely to activities of any Underwriter, then such Underwriter shall
assume the expense of preparing and furnishing any such amendment or
supplement.
(e) To make generally available to the Trust's security holders,
as promptly as may be practicable, an earning statement of the Company
in reasonable detail (which need not be audited) covering a period of
twelve consecutive months beginning on the first day of the month next
succeeding the date upon which the Prospectus Supplement is filed or
transmitted for filing pursuant to Rule 424 under the Act, which
earnings statement shall satisfy the requirements of Section 11(a) of
the Act and Rule 158 thereunder.
(f) During a period of five years from the date of this
Agreement, to deliver to the Representative and, upon request, to each
of the other Underwriters, a copy of each annual and interim report of
the Company to its stockholders, and to deliver to the Representative
quarterly balance sheets and statements of income and retained
earnings (which need not be audited) and annual balance sheets and
statements of income and retained earnings (which shall be audited) of
the Company, and copies of all such documents, reports and information
as shall be of general interest which shall be furnished by the
Company to its stockholders. To the extent the accounts of the
Company and its subsidiaries are consolidated, such financial
statements shall be furnished on a consolidated basis.
(g) To cooperate with the Representative in qualifying the
Trust Securities for offer and sale under the securities or "blue sky"
laws of such jurisdictions as the Representative may reasonably
designate; provided, however, that none of the Offerors shall be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction, or to comply with
any other requirement reasonably deemed by either of them to be unduly
burdensome. The Offerors will, from time to time, prepare and file
such statements and reports as are or may be required to continue such
qualifications in effect for so long a period as the Representative
may reasonably request, but in no event beyond the last day of the
calendar month in which the first anniversary of the date of this
Agreement shall fall.
(h) To use all reasonable efforts to effect the listing of the
Securities (including the Securities Guarantee with respect thereto)
on the New York Stock Exchange.
(i) During the period beginning from the date of this Agreement
and continuing for a period of thirty (30) days from the date of this
Agreement, not to sell, offer to sell, or otherwise dispose of, any
Securities, any security convertible into or exchangeable into or
exercisable for Securities or Subordinated Debt Securities or any
other securities substantially similar to the Subordinated Debt
Securities or the Securities (except for the Subordinated Debt
Securities and the Securities) without the prior consent of the
Representative; provided, however, that nothing herein shall be deemed
to restrict the offer or sale by the Company of any debt issued under
its Mortgage and Deed of Trust, dated as of June 1, 1939, from the
Company to Citibank, N.A., as trustee.
Section 5. Payment of Expenses.
-------------------
The Company will pay all expenses incident to the performance of
each Offerors' obligations under this Agreement, including, but not limited
to, (i) the preparation and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation,
issuance and delivery of the certificates for the Securities to the
Underwriters, (iii) the fees and disbursements of the Company's and the
Trust's counsel and accountants, (iv) the qualification of the Trust
Securities and the Subordinated Debt Securities under securities laws in
accordance with the provisions of Section 4(g) hereof, including filing
fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
survey and any legal investment survey, (v) the printing and delivery to
the Underwriters of copies of the Registration Statement as originally
filed and of each amendment thereto, of each preliminary prospectus, and of
the Prospectus and any amendments or supplements thereto, (vi) the printing
and delivery to the Underwriters of copies of any Blue Sky survey and any
legal investment survey, (vii) the fee, if any, of the National Association
of Securities Dealers, Inc., (viii) the fees and expenses of the Debt
Trustee, including the fees and disbursements of counsel for the Debt
Trustee in connection with the Indenture and the Subordinated Debt
Securities, (ix) the fees and expenses of the Institutional Trustee, the
Delaware Trustee and the Guarantee Trustee, including the fees and
disbursements of counsel for the Institutional Trustee in connection with
the Declaration and the Certificate of Trust, (x) any fees payable in
connection with the rating of the Securities and the Subordinated Debt
Securities, (xi) the fees and expenses incurred in connection with the
listing of the Securities and, if applicable, the Subordinated Debt
Securities on the New York Stock Exchange, (xii) the cost and charges of
any transfer agent or registrar, and (xiii) the cost of qualifying the
Securities with DTC.
If this Agreement is terminated by the Representative in
accordance with the provisions of Section 6 or Section 10 hereof, the
Company shall reimburse the Underwriters for all out-of-pocket expenses
(including the reasonable fees and disbursements of counsel for the
Underwriters), but not exceeding [$ ], reasonably incurred by them
in contemplation of the performance of this Agreement. In no event shall
the Company or the Trust be liable to any Underwriter for damages for loss
of anticipated profits from the transactions contemplated by this
Agreement.
Section 6. Conditions of Underwriters'
---------------------------
Obligations.
-----------
The obligations of the several Underwriters shall be subject (i)
to the accuracy, at and as of the Closing Time, of the representations and
warranties of the Offerors herein contained, (ii) to the performance by the
Offerors of their obligations hereunder as are to be performed at or prior
to the Closing Time, and (iii) to the following further conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued prior to the Closing
Time; no proceedings for that purpose shall have been initiated or be
pending before, or to the knowledge of the Offerors or the
Representative contemplated by, the Commission at the Closing Time;
and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the satisfaction of the
Representative.
(b) At or before 1:00 P.M., New York time, on the second
business day following the date of this Agreement, or at such later
time and date as may be agreed upon in writing by the Representative,
there shall have been issued, and at the Closing Time there shall be
in full force and effect, appropriate orders of the Washington
Utilities and Transportation Commission, the California Public
Utilities Commission, the Idaho Public Utilities Commission and the
Public Utility Commission of Oregon permitting the issuance and sale
of the Securities Guarantee and the Subordinated Debt Securities on
the terms herein set forth or contemplated, and containing no
provision reasonably unacceptable to the Representative (it being
understood that no such order in effect on the date of this Agreement
contains any such unacceptable provision).
(c) At the Closing Time, the Representative shall have received
from Paine, Hamblen, Coffin, Brooke & Miller LLP, of Spokane,
Washington, general counsel for the Company, an opinion, dated as of
the Closing Time, substantially in the form of Exhibit 1 hereto.
(d) At the Closing Time, the Representative shall have received
from Reid & Priest LLP, of New York, New York, counsel for the
Offerors, an opinion, dated as of the Closing Time, substantially in
the form of Exhibit 2 hereto.
(e) At the Closing Time, the Representative shall have received
from Richards, Layton & Finger, P.A., special Delaware counsel to the
Offerors, an opinion, dated as of the Closing Time, substantially in
the form of Exhibit 3 hereto.
(f) At the Closing Time, the Representative shall have received
from Richards, Layton & Finger, P.A., counsel to Wilmington Trust
Company, as Institutional Trustee under the Declaration, and Guarantee
Trustee under the Securities Guarantee Agreement, an opinion, dated as
of the Closing Time, substantially in the form of Exhibit 4 hereto.
(g) At the Closing Time, the Representative shall have received
the opinion of Sullivan & Cromwell, New York, New York, counsel for
the several Underwriters, in form and substance satisfactory to the
Representative with respect to the incorporation and legal existence
of the Company, the formation and legal existence of the Trust, the
Securities, the Indenture, the Securities Guarantee Agreement, this
Agreement, the Registration Statement, the Prospectus and other
related matters as the Representative may reasonably require.
In rendering such opinions, Reid & Priest LLP and Sullivan &
Cromwell may assume the conclusions of Delaware law relating to the Trust,
the Securities and the Declaration set forth in the opinion of Richards,
Layton & Finger, P.A., special Delaware counsel for the Offerors, which
shall be delivered in accordance with Section 6(e) hereto, and as to the
incorporation of the Company and as to all other matters of Washington,
California, Idaho, Montana or Oregon law, may assume the conclusions set
forth in the opinion of Paine, Hamblen, Coffin, Brooke & Miller LLP which
shall be delivered in accordance with Section 6(c) hereto.
(h) At the Closing Time, the Representative shall have received
from Deloitte & Touche LLP a letter, dated as of Closing Time,
substantially to the effect set forth in Exhibit 5 hereto.
(i) At the Closing Time, the Securities shall be rated in one of
the four highest rating categories for long term debt ("Investment
Grade") by any nationally recognized statistical rating agency (as
defined for purposes of Rule 436(g) under the Act), and the Trust
shall have delivered to the Representative a letter, dated the Closing
Time, from such nationally recognized statistical rating agency, or
other evidence satisfactory to the Representative, confirming that the
Securities and the Subordinated Debt Securities have Investment Grade
ratings.
(j) At the Closing Time, the Securities shall have been approved
for listing on the New York Stock Exchange upon notice of issuance.
(k) At the Closing Time, the Representative shall have received
certificates, dated the Closing Time, from the Chairman of the Board
of Directors, the President, any Vice President or the Treasurer of
the Company and from a Regular Trustee of the Trust, to the effect
that, to the best of his knowledge based on a reasonable
investigation:
(i) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated
under the Act;
(ii) except as set forth in or contemplated by the
Prospectus, (A) since the date of the Prospectus there has not
been any material adverse change in the condition of the Trust or
the Company and its subsidiaries as a whole, financial or
otherwise, or in the business prospects of the Company and its
subsidiaries as a whole (B) since the date of the Prospectus
there has not been any transaction entered into by the Trust or
the Company or any subsidiary of the Company which is material to
the Trust or the Company and its subsidiaries as a whole other
than transactions in the ordinary course of business, and (C)
none the Trust or the Company or any subsidiaries of the Company
has any contingent obligation which is material to the Trust or
the Company and its subsidiaries as a whole; and
(iii) the representations and warranties on the part of the
Company and the Trust contained in this Agreement are true and
correct as if made on and as of the Closing Time, and the Trust
and the Company have in all material respects complied with all
of the agreements and satisfied all of the conditions on its part
to be performed or satisfied under this Agreement at or prior to
the Closing Time.
(l) At or prior to the Closing Time, the Offerors shall have
furnished to the Representative such further certificates as the
Representative shall reasonably request.
The opinions and certificates mentioned in this Agreement shall
be deemed to be in compliance with the provisions hereof only if they are
in all material respects satisfactory to the Representative.
If any condition specified in this Section shall not have been
fulfilled, this Agreement may be terminated by the Representative without
liability of any party to any other party, except for the obligation of the
Company to pay certain expenses to the extent provided in Section 5 hereof
and except for any liability under Sections 8 and 9 hereof.
Section 7. Conditions of Offerors'
-----------------------
Obligations.
-----------
The obligations of the Offerors to sell and deliver the Trust
Securities and such of the other obligations of the Offerors hereunder as
are to be performed by them at or prior to the Closing Time shall be
subject to the following conditions:
(a) At the Closing Time no stop order suspending the
effectiveness of the Registration Statement shall be in effect and no
proceedings for that purpose shall be pending before, or to the
knowledge of the Offerors or the Representative contemplated by, the
Commission.
(b) At or before 1:00 P.M., New York time, on the second
business day following the date of this Agreement, or at such later
time and date as may be agreed upon in writing by the Offerors, there
shall have been issued, and at the Closing Time there shall be in full
force and effect, appropriate orders of the Washington Utilities and
Transportation Commission, the California Public Utilities Commission,
the Idaho Public Utilities Commission and the Public Utility
Commission of Oregon permitting the issuance and sale of the
Securities, the Securities Guarantee and the Subordinated Debt
Securities on the terms herein set forth or contemplated, and
containing no provision reasonably unacceptable to the Offerors (it
being understood that no such order in effect on the date of this
Agreement contains any such unacceptable provision).
If any of the conditions specified above in this Section shall
not have been fulfilled, this Agreement may be terminated by the Offerors
without liability on the part of any party to any other party, except for
the obligation of the Offerors to pay certain expenses to the extent
provided for in Section 5 hereof and except for any liability under
Sections 8 and 9 hereof.
Section 8. Indemnification.
---------------
(a) The Offerors agree to jointly and severally indemnify and
hold harmless each Underwriter and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Basic Prospectus or
the Prospectus (or any amendment or supplement thereto),
including the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, if such settlement is effected with the
written consent of the Company; and
(iii) against any and all expenses whatsoever incurred
(including, subject to Section 8(c) hereof, the fees and
disbursements of counsel chosen by the Representative) reasonably
incurred, in investigating, preparing or defending against any
litigation or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission or alleged
untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to
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any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written
information furnished to the Trust or the Company by any Underwriter
through the Representative specifically for use in the Registration
Statement (or any amendment thereto), the Basic Prospectus or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided, further, that, insofar as it
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relates to the Basic Prospectus, the indemnity agreement contained in
this subsection (a) shall not inure to the benefit of any Underwriter
on account of any loss, liability, claim, damage or expense whatsoever
(or actions in respect thereof) arising from the sale of Trust
Securities by such Underwriter to any person if a copy of the
Prospectus shall not have been sent or given to such person with or
prior to the written confirmation of the sale involved to the extent
that the Prospectus, if so sent or delivered, would have cured the
defect in the Basic Prospectus giving rise to such loss, liability,
claim, damage or expense; and provided, further, that if, at any time
-------- -------
after the date of filing the Prospectus or any amendment or supplement
to the Prospectus with the Commission, any event shall have occurred
as a result of which the Prospectus as then amended or supplemented
("Current Prospectus") would include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, and if
the Offerors shall have furnished to any Underwriter copies of an
amended Prospectus ("amended Prospectus") or of a supplement to be
attached to or furnished with the current Prospectus ("Supplement"),
to which the Representative shall not have objected pursuant to
Section 4(a) hereof, for delivery in connection with offers and sales
of the Trust Securities, the indemnity agreement contained in this
Section 8, insofar as it relates to the current Prospectus, shall not
inure to the benefit of such Underwriter on account of any loss,
liability, claim, damage or expense (or actions in respect thereof)
arising from the sale of Trust Securities by such Underwriter to any
person subsequent to the time such copies have been so furnished to
such Underwriter, if a copy of the amended Prospectus or the
Supplement, as the case may be, shall not have been sent or given to
such person with or prior to the written confirmation of the sale
involved, to the extent that the amended Prospectus or the Supplement,
if so sent or delivered, would have cured the defect in the current
Prospectus giving rise to such loss, liability, claim, damage or
expense.
(b) The Company agrees to indemnify the Trust against any and
all loss, liability, claim, damage and expense whatsoever, as incurred
and as due from the Trust under Section 8(a) hereof.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Offerors, their directors, trustees, each of their
officers and trustees who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section
15 under the Act against any and all loss, liability, claim, damage
and expense whatsoever described in the indemnity contained in Section
8(a) hereof, as incurred, but only with respect to untrue statements
or omissions made in the Registration Statement (or any amendment
thereto), the Basic Prospectus or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with written information furnished to the Company by
any Underwriter through the Representative specifically for use in the
Registration Statement (or any amendment thereto), the Basic
Prospectus or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(d) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability which it may have
otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense
of any action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to local
counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances.
Section 9. Contribution. In order to provide for just and
------------
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 8 is for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with its terms, the
Offerors and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Offerors and one or more of the
Underwriters, as incurred, in such proportion as is appropriate to reflect
the relative benefits received by the Trust and the Company on the one hand
and the Underwriters on the other from the offering of the Trust Securities
from which such loss, liability, claim, damage or expense relates and the
relative fault of the Trust and the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as
well as any other relevant equitable considerations. The relative benefits
received by the Trust and the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Trust and the Company bear to the total underwriting discounts and
commissions received by the Underwriters in each case as set forth on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading relates to information supplied by
the Trust and the Company on the one hand or by the Underwriters on the
other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Trust, the Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section.
The amount paid or payable by an indemnified party as a result of the
losses, liabilities, claims, damages or expenses (or actions in respect
thereof) referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations
of the Underwriters to contribute are several in proportion to their
respective underwriting obligations with respect to the Securities and not
joint. For purposes of this Section 9, each person, if any, who controls
an Underwriter within the meaning of Section 15 under the Act shall have
the same rights to contribution as such Underwriter and each director of
the Company, each Trustee of the Trust, each officer of the Company and
each Trustee of the Trust who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15
under the Act shall have the same rights to contribution as the Offerors.
Section 10. Termination.
-----------
(a) The Representative shall have the right to terminate this
Agreement by giving the notice hereinafter specified at any time at or
prior to the Closing Time if (i) trading in securities generally on
the New York Stock Exchange shall have been generally suspended or
materially limited, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or
New York authorities, (iii) there is the outbreak of major hostilities
or the major escalation of existing hostilities so as to result in
major hostilities, or the declaration by the United States of a
national emergency or war, or other national or international calamity
or crisis, or (iv) there shall have occurred any downgrading in the
rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization" (as that term is defined
for purposes of Rule 436 under the Act) or any such organization shall
have publicly announced or shall have informed the Company that it has
placed any of the Company's outstanding debt securities or preferred
stock on what is commonly termed a "watch list" for possible
downgrading; provided, however, that in the case of any event
described in clause (iii) or clause (iv) above, the effect of such
event, in the reasonable judgment of the Underwriters, shall be to
make it impracticable or inadvisable to market and sell the Trust
Securities, or to enforce contracts for the sale of the Trust
Securities, upon the terms specified in the Prospectus.
(b) If the Representative elects to terminate this Agreement as
provided in this Section, the Company and each Underwriter shall be
notified promptly by the Representative by telephone or telegram,
confirmed by letter.
Section 11. Substitution of Underwriters.
----------------------------
(a) If any Underwriter or Underwriters shall fail to take up and
pay for the number of Securities agreed by such Underwriter or
Underwriters to be purchased hereunder upon tender of such Securities
in accordance with the terms hereof, and the aggregate number of
Securities which such defaulting Underwriter or Underwriters so fail
to purchase does not exceed 10% of the aggregate number of Securities
agreed to be purchased hereunder, the Representative shall have the
right to postpone the time for delivery of the Securities as
hereinafter provided but the remaining Underwriters shall be obligated
severally and not jointly, in proportion to their respective purchase
obligations hereunder or in such proportions as may be agreed upon
among them, to take up and pay for, at the Closing Time, the number of
Securities which the defaulting Underwriters agreed but failed to
purchase; or
(b) If the aggregate number of Securities which such defaulting
Underwriter or Underwriters so fail to purchase exceeds 10% of the
aggregate number of Securities, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
(c) If it shall be arranged for the remaining Underwriters or
substituted purchasers to take up the Securities of the defaulting
Underwriter or Underwriters as provided in Section 11(a) hereof, (i)
the Representative or the Offerors shall have the right to postpone
the Closing Time for a period of not more than seven full business
days from the date specified in Section 3 hereof in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or
arrangements, and the Offerors agree promptly to file any amendments
to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective number of
Securities to be purchased by the remaining Underwriters or
substituted purchasers shall be taken as the basis of their respective
purchase obligations for all purposes of this Agreement.
(d) Nothing contained in this Section 11 or elsewhere in this
Agreement shall relieve any defaulting Underwriter of its liability to
the Offerors for damages occasioned by its default hereunder.
(e) The term "Underwriter" as used in this Agreement shall refer
to and include any purchaser substituted under this Section 11 with
like effect as if such substituted purchaser had originally been named
in Schedule A annexed hereto.
Section 12. Representations to Survive
--------------------------
Delivery.
--------
All representations and warranties contained herein or in
certificates delivered pursuant hereto and all covenants and agreements
herein not fully performed before delivery of the Securities to the
Underwriters shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Underwriter or any
controlling person, or by or on behalf of the Offerors, and shall survive
delivery of the Securities to the Underwriters.
Section 13. Notices.
-------
Except as provided herein, all communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at Merrill Lynch World
Headquarters, North Tower, World Financial Center, New York, New York
10281-1201, Attention: Russell Robertson, Senior Managing Director;
notices to the Trust or the Company shall be directed to them at The
Washington Water Power Company, 1411 East Mission Avenue, Spokane,
Washington, 99202, Attention: Treasurer.
Section 14. Successors.
----------
This Agreement shall inure to the benefit of and be binding upon
the Underwriters, the Trust and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended
or shall be construed to give any person, firm or corporation, other than
the Underwriters and the Trust and the Company and their respective
successors and the controlling persons and officers, directors and trustees
referred to in Sections 8 and 9 any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriters, the
Trust and the Company and their respective successors, and said controlling
persons and officers, directors and trustees and their heirs and legal
representatives, and for the benefit of no other person, firm or
corporation. The term "successor" shall not include any purchaser of Trust
Securities merely because of such purchase.
Section 15. Governing Law and Time.
----------------------
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to
be performed in said State. Except as otherwise set forth herein,
specified times of day refer to New York City time.
Section 16. Counterparts.
------------
This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together constitute
one and the same instrument.
Section 17. Representative to Act for the Several
-------------------------------------
Underwriters.
------------
The Representative will act for the several Underwriters in
connection with this financing, and any action under this Agreement taken
by the Representative will be binding upon all the Underwriters. The
Repre-sentative represents that it has been authorized to execute this
Agreement by the several Underwriters named in Schedule A hereto.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a
binding agreement between the Underwriters and the Trust and the Company in
accordance with its terms.
Very truly yours,
THE WASHINGTON WATER POWER COMPANY
By
------------------------------------------------
Title:
WASHINGTON WATER POWER CAPITAL I
By
------------------------------------------------
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By
--------------------------------
Authorized Signatory
For itself and as Representative of the other
Underwriters named in Schedule A hereto.
SCHEDULE A
Number
Name of Underwriter of Securities
------------------- -------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . .
SCHEDULE B
INFORMATION REGARDING THE
SECURITIES AND THE SALE THEREOF
-------------------------------
1. Title of Securities:
-------------------
2. Registration Statement Nos.: 333-______ and 333-______
----------------------------
3. Aggregate Number of Securities:
------------------------------
4. Stated Value of Securities: $___ per security or $_________ total
--------------------------
5. Price Per Security to be Paid to Company: $___, plus accrued
----------------------------------------
distributions, if any, from the date of issuance.
6. Initial Public Offering Price per Security:
------------------------------------------
7. Closing Time:
------------
8. Compensation Payable to Underwriters:
------------------------------------
EXHIBIT 1
FORM OF OPINION OF PAINE, HAMBLEN, COFFIN, BROOKE & MILLER LLP
, 199
---------------- ---
[Names and Addresses of Underwriters]
Dear Sirs:
This opinion is being delivered to you pursuant to Section 6(d) of the
Underwriting Agreement, dated , 1996 (the "Underwriting
---------
Agreement"), among you as Representative of the Underwriters and The
Washington Water Power Company, a Washington corporation (the "Company"),
and Washington Water Power Capital I, a statutory business trust created
under the Business Trust Act of the State of Delaware (the "Trust"),
relating to (i) the issuance and sale by the Trust to the Underwriters of
$ in aggregate liquidation amount of %
------------------- ----- ---------
Securities (liquidation amount of $ per Security) (the "Securities"),
---
issued pursuant to the Declaration and guaranteed pursuant to the
Securities Guarantee Agreement, dated as of , by and between the
----------
Company, as guarantor, and Wilmington Trust Company, as guaranty trustee,
and (ii) the related issuance and sale by the Company to the Trust of
$ in aggregate principal amount of % Junior Subordinated
----------- ____
Deferrable Interest Debentures, Series A, Due (the "Subordinated
----
Debt Securities"), to be issued under an Indenture, dated as of
, by and between the Company and Wilmington Trust
--------------------
Company as trustee (the "Debt Trustee").
Capitalized terms used herein but not otherwise defined herein shall
have the meaning ascribed to them in the Underwriting Agreement. The
Declaration, the Indenture (including the Officer's Certificate
establishing the terms of the Subordinated Debt Securities), the
Subordinated Debt Securities and the Guarantee Agreements are sometimes
collectively referred to herein as the "Company Documents".
In connection with rendering this opinion, we have examined, or are
generally familiar with, the following: (a) the Restated Articles of
Incorporation, as amended, and the Bylaws, as amended, of the Company; (b)
the Underwriting Agreement; (c) the Company Documents; (d) the Securities;
(e) the Common Securities; (f) Certificates of Existence/Authorization
issued by the Secretary of State of Washington, a Certificate of Corporate
Status issued by the Secretary of State of Idaho, a Certificate of
Authorization issued by the Secretary of State of Montana, a Certificate of
Authorization issued by the Secretary of State of Oregon, and a Certificate
of Status of Foreign Corporation issued by the Secretary of State of
California; (g) the orders of the Washington Utilities and Transportation
Commission (the "WUTC"), the California Public Utilities Commission (the
"CPUC"), the Idaho Public Utilities Commission (the "IPUC") and the Public
Utility Commission of Oregon (the "OPUC"); (h) the registration statement
(File Nos. 333- and 333- ) (the "Registration Statement") filed by
---- ----
the Company and the Trust with the Securities and Exchange Commission (the
"SEC") for the registration under the Securities Act of 1933, as amended
(the "Act"), of $150,000,000 in aggregate amount of the Trust's and the
Company's securities and for qualification under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") of the Indenture, the
Declaration and the Guarantee Agreements, together with all exhibits
thereto, which Registration Statement, we are advised, became effective on
; (i) the final prospectus relating to the Trust Securities
----------------
and the prospectus supplement dated , relating to such
---------------
securities and filed with the SEC pursuant to Rule 424 under the Act
(collectively, the "Prospectus"); (j) the Incorporated Documents, which are
incorporated by reference in the Registration Statement and the Prospectus,
consisting of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "10-K"), the Company's Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, 1996 and June 30, 1996
and September 30, 1996 (the "10-Q's"), and the the Company's December 1,
1996 Form 8-K (the "8-K") in each case, together with all exhibits thereto;
and (k) the records of various corporate and other proceedings relating to
the authorization of the Underwriting Agreement and the Company Documents.
We have also examined such other documents and satisfied ourselves as to
such other matters as we have deemed necessary in order to render this
opinion. We have not examined the certificates evidencing the Securities,
except a specimen thereof.
As to various questions of fact (but not as to the legal conclusions
contained therein) material to the opinions set forth below, in rendering
such opinions we have relied, with your permission, upon certificates of
public officials, certificates of officers or other employees of the
Company, representations contained in the Underwriting Agreement, the
Company Documents and related documents, and other oral or written
assurances by officers or other employees of the Company.
We are general counsel to the Company and the following subsidiaries:
WP Laboratories, Inc., WWP Energy Solutions, Inc., WWP Resource Services,
Inc., WP International, Inc., Washington Irrigation and Development
Company, and WP Finance Co. In such capacity, we represent the Company and
such subsidiaries on various matters referred to us by them, but not on all
matters. We do not serve as counsel to other direct or indirect
subsidiaries and affiliates of the Company (including the Trust) and, as to
various questions relating to the activities of such subsidiaries and
affiliates, we further have relied upon certificates of officers thereof
and assumed or otherwise based this opinion upon legal conclusions set
forth in opinions of counsel thereto.
We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as copies, and the due
authorization, execution and delivery of all documents by all parties
thereto other than the Company.
As used in this opinion, the expression "to the best of our knowledge"
with reference to matters of fact means that, after an examination of the
documents made available to us by the Company and after inquiries of
officers or employees of the Company, we find no reason to believe that the
opinions expressed herein are factually inaccurate; but beyond that, we
have not made an independent factual investigation for the purpose of
rendering this opinion.
Based upon the foregoing, and subject to the qualifications set forth
herein, we are of the opinion that:
(1)(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Washington, is duly qualified to do business and in good standing as a
foreign corporation under the laws of the States of California, Idaho,
Montana and Oregon, and has adequate corporate powers and has all
material required approvals and authorizations to own, lease and
operate its properties and to transact an electric and/or gas public
utility business in such States as described in the Registration
Statement, the Prospectus and the Incorporated Documents. The Company
has adequate corporate powers to execute and deliver, and perform its
obligations under, the Underwriting Agreement and the Company
Documents.
(b) Each of the Company's following subsidiaries, Pentzer
Corporation, WWP Energy Solutions, Inc., WWP Resource Services, Inc.,
and Washington Irrigation & Development Company is a corporation duly
incorporated, validly existing and in good standing under the laws of
the State of Washington.
(2) The WUTC, CPUC, IPUC and OPUC have entered appropriate orders
authorizing the issuance and sale by the Company of the Subordinated
Debt Securities and the Securities Guarantee on the terms set forth or
contemplated in such orders; each of such orders, to the best of our
knowledge, remain in full force and effect on the date of this
opinion; and no further approval, authorization, consent or other
order of, or filing with, any governmental agency of the States of
Washington, California, Idaho, Montana and Oregon is legally required
for the authorization of the issuance and sale by the Company of the
Subordinated Debt Securities or in order for (A) the Company Documents
to constitute valid and binding obligations of the Company or (B) the
Securities and the Common Securities to be validly issued by the
Trust.
(3) The Underwriting Agreement and the Company Documents have been
duly authorized, executed and delivered by the Company.
(4) The execution, delivery and performance by the Company of its
obligations under the Underwriting Agreement and the Company
Documents, and the issuance and sale by the Company of the
Subordinated Debt Securities, will not (A) breach or violate the
Company's Restated Articles of Incorporation, as amended, or Bylaws,
as amended, or (B) breach or violate, or constitute a default under,
(i) any order of any court or governmental agency of such States
having jurisdiction over the Company or any of its properties which is
material to Company or (ii) any contract, indenture, mortgage,
agreement or other instrument for borrowed money to which the Company
is a party or to which any of its properties is subject and which is
listed as an Exhibit to the 10-K, except that we express no opinion as
to any such contract, indenture, mortgage, agreement or other
instrument which is addressed in the separate opinion to you of Reid &
Priest LLP.
(5) Except as described in the Registration Statement, the
Prospectus or the Incorporated Documents, to the best of our
knowledge, there are no legal or governmental proceedings, either
pending or overtly threatened in writing, which arise out of the
operations of the Company in the States of Washington, California,
Idaho, Montana or Oregon to which the Company is a party or to which
the Company or any of its properties are subject and which are
material to the Company, other than ordinary, routine legal or
governmental proceedings incidental to the kind of business conducted
by the Company.
(6) The descriptions of legal or governmental proceedings
contained in Item 1 (Note 2) of the 10-Q's and in Item 14 (Note 14) of
the 10-K are fair and accurate descriptions thereof in all material
respects.
As noted above, we are general counsel to the Company and certain of
its subsidiaries and we represent them on various, but not all, matters.
Our involvement in the preparation of the Registration Statement, the
Prospectus and the Incorporated Documents was limited to generally
reviewing drafts thereof prepared by the Company or other counsel to the
Company and to participating in the conferences referred to below.
However, we have not been engaged to make the ultimate determination of
materiality for purposes of, or to determine the wording and degree of
disclosure contained in, the Registration Statement, the Prospectus or the
Incorporated Documents; we have not been engaged to advise the Company with
respect to compliance with securities laws; and we have not otherwise acted
as securities law counsel to the Company.
Accordingly, in such capacity during the course of the preparation by
the Company of the Registration Statement, the Prospectus and the
Incorporated Documents, we have participated in conferences with certain
officers and other employees of the Company, with other counsel for the
Company, with you and your counsel, and with Deloitte & Touche LLP, the
independent certified public accountants who examined the financial
statements included in the Registration Statement, the Prospectus and the
Incorporated Documents, but we have made no independent verification of the
accuracy or completeness of the representations and statements made to us
by the Company or the information included by the Company in the
Registration Statement, the Prospectus or the Incorporated Documents, and
we take no responsibility therefor, except insofar as such information
relates to us.
The nature and extent of our engagement by the Company and our
participation in the above-mentioned conferences, as described above, would
not necessarily be adequate to bring to our attention all matters which
could be deemed material or to enable us to make a valid assessment of the
materiality of such matters as were brought to our attention or of the
wording and degree of disclosure contained in the Registration Statement,
the Prospectus or the Incorporated Documents.
However, during the course of our examination of the Registration
Statement, the Prospectus and the Incorporated Documents and our
participation in the above-mentioned conferences, nothing came to our
attention which gives us reason to believe that, when the Registration
Statement became effective, the Registration Statement, the Prospectus and
the Incorporated Documents contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein not misleading, or that, as of the date of this opinion, the
Prospectus, as then amended or supplemented, and the Incorporated Documents
contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that we do not express any belief as to any financial
statements or other financial or statistical information, data or
computations contained in the Registration Statement, the Prospectus or the
Incorporated Documents, as to any statements contained in the Statements of
Eligibility (Form T-1) under the Trust Indenture Act with respect to the
Debt Trustee, the Institutional Trustee and the Guaranty Trustee, or as to
any portions of the Registration Statement or the Prospectus other than the
sections entitled "The Washington Water Power Company" and "Use of
Proceeds" and Part II of the Registration Statement.
The opinions expressed above are limited to the laws of the States of
Washington, California, Idaho, Montana and Oregon (excluding therefrom
principles of conflicts of laws, state securities or blue sky laws, and
laws of political subdivisions of such States). This opinion is limited to
the opinions and confirmations expressed above, and no additional opinions
or confirmations are to be implied or inferred. Without limiting the
generality of the foregoing, it is specifically understood that we express
no opinion or confirmation as to (i) whether the Underwriting Agreement,
the Company Documents or related documents constitute legal, valid and
binding obligations, enforceable in accordance with their terms, (ii)
whether the Securities or the Common Securities have been validly issued,
or (iii) the tax treatment or other description of the Trust Securities,
the Subordinated Securities or related documents contained in the
Registration Statement and Prospectus.
This opinion is being delivered as of this date solely in connection
with the issuance and sale of the Securities and the related issuance and
sale of the Subordinated Debt Securities for the benefit of the addressees
hereof. Wilmington Trust Company, as Debt Trustee under the Indenture, is
hereby also authorized to rely upon this opinion in connection therewith as
if it were addressed to it. Sullivan & Cromwell, Reid & Priest LLP and
Richards, Layton & Finger are hereby also authorized to rely upon this
opinion in connection therewith as if it were addressed to them. This
opinion is not being delivered, nor may it be relied upon, for any other
purpose; this opinion is not being delivered for the benefit of, nor may it
be relied upon by, the holders of the Trust Securities or the Subordinated
Securities or any other party to which it is not specifically addressed or
to which reliance is not expressly permitted hereby; and this opinion is
not to be used, delivered, circulated, quoted or otherwise referred to
except as expressly permitted hereby.
This opinion is given as of the date hereof, without any obligation
upon us to update this opinion or to advise the addressees hereof or any
other party of any changes in circumstances or laws that may hereafter be
brought to our attention or occur which may affect this opinion.
Very truly yours,
PAINE, HAMBLEN, COFFIN,
BROOKE & MILLER LLP
EXHIBIT 2
FORM OF OPINION OF REID & PRIEST LLP
, 199
---------- -
[Names and Addresses of Underwriters]
Dear Sirs:
This opinion is being delivered to you pursuant to Section 6(d)
of the Underwriting Agreement, dated , 1996 (the "Underwriting
----------
Agreement"), among you as Representative of the Underwriters and The
Washington Water Power Company, a Washington corporation (the "Company"),
and Washington Water Power Capital I, a statutory business trust created
under the Business Trust Act of the State of Delaware (the "Trust"),
relating to (i) the issuance and sale by the Trust to you of $
------------
in aggregate liquidation amount, % Securities (liquidation
-- ---------
amount of $ per Security) (the "Securities"), guaranteed pursuant to the
---
Securities Guarantee Agreement, dated as of , by and between the
---------
Company, as guarantor, and Wilmington Trust Company, as preferred guaranty
trustee, and (ii) the issuance and sale by the Company to the Trust of
$ in aggregate principal amount of % Junior Subordinated
---------- ___
Deferrable Interest Debentures, Series A, Due (the "Subord-
-------------
inated Debt Securities"), to be issued under an Indenture, dated as of
, by and between the Company and Wilmington Trust Company, as
-----
trustee (the "Debt Trustee").
Capitalized terms used herein but not otherwise defined herein
shall have the meaning ascribed to them in the Underwriting Agreement. The
Declaration, the Indenture (including the Officer's Certificate
establishing the terms of the Subordinated Debt Securities), the
Subordinated Debt Securities and the Guarantee Agreements are sometimes
collectively referred to herein as the "Company Documents".
In connection with rendering this opinion, we have examined, or
are generally familiar with, the following: (a) the Restated Articles of
Incorporation, as amended, and the Bylaws, as amended, of the Company; (b)
the Underwriting Agreement; (c) the Company Documents; (d) the Securities;
(e) the Common Securities; (f) the Registration Statement for the
registration under the Securities Act of 1933, as amended (the "Act"), of
$150,000,000 in aggregate amount of the Trust's and the Company's
securities and for qualification under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of the Indenture, the Declaration and
the Guarantees, which registration statement became effective on
; (g) the Prospectus filed with the SEC pursuant to Rule 424
----------
under the Act ; and (h) the records of various corporate and other
proceedings relating to the authorization of the Company Documents. We
have also examined such other documents and satisfied ourselves as to such
other matters as we have deemed necessary in order to render this opinion.
We have not examined the certificates evidencing the Securities, except a
specimen thereof.
As to various questions of fact (but not as to the legal
conclusions contained therein) material to the opinions set forth below, in
rendering such opinions we have relied, with your permission, upon
certificates of public officials, certificates of officers or other
employees of the Company, representations of the Company and the Trust in
the Underwriting Agreement, and other oral or written assurances by
officers or other employees of the Company. We do not serve as counsel to
direct or indirect subsidiaries or affiliates of the Company, and, as to
various questions relating to the activities of such subsidiaries and
affiliates, we have further relied upon certificates of officers thereof
and opinions of counsel thereto.
We have assumed, consistent with the opinion of even date
herewith rendered to you by Paine, Hamblen, Coffin, Brooke & Miller LLP,
that the Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Washington and is duly
qualified to do business and in good standing as a foreign corporation
under the laws of the States of California, Idaho, Montana and Oregon, and
has adequate corporate powers to execute and deliver the Underwriting
Agreement and the Company Documents; that the Underwriting Agreement and
the Company Documents have been duly authorized, executed and delivered by
the Company; and that all approvals, authorizations, consents, other orders
or filings required under the laws of the States of Washington, California,
Idaho, Montana and Oregon in order for the Company Documents to constitute
valid and binding obligations of the Company have been obtained. We have
further assumed, consistent with the opinion of even date herewith rendered
to you by Richards, Layton & Finger, that the Trust has been duly created
and is validly existing in good standing as a business trust under the
Delaware Act, with trust power and authority for the execution, delivery
and performance of its obligations under the Underwriting Agreement and the
issuance and performance of its obligations under the Securities and the
Common Securities; that the execution, delivery and performance of the of
the Underwriting Agreement have been duly authorized by the Trust; that the
Securities and the Common Securities have been duly authorized by the
Declaration, and are duly and validly issued and, subject to the
qualifications set forth in said opinion, are fully paid and nonassessable
undivided beneficial interests in the Trust and are entitled to the
benefits of the Declaration; and that no authorization, approval, consent
or order of any Delaware court or Delaware governmental authority or agency
is required in connection with the issuance and sale by the Trust of the
Securities or the Common Securities.
Based upon the foregoing, and subject to the qualifications set
forth herein, we are of the opinion that:
[1] the Indenture has been duly qualified under the Trust
Indenture Act and constitutes a valid and legally binding instrument,
enforceable against the Company in accordance with its terms, except
to the extent the enforcement of the Indenture may be limited by any
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors' rights
generally, by general principles of equity (whether asserted in an
action in equity or at law) and by rules of law governing specific
performance, injunctive relief, foreclosure, receivership and other
equitable remedies; and the Indenture conforms in all material
respects to the description thereof contained in the Prospectus;
[2] the Subordinated Debt Securities, when duly authenticated
and delivered by the Debt Trustee in accordance with the Indenture and
issued, delivered and paid for pursuant to the Declaration, will be
duly executed, authenticated, issued and delivered and constitute
valid and legally binding obligations of the Company, in the form
contemplated by and entitled to the benefits provided by the
Indenture, and enforceable in accordance with their terms, except to
the extent the enforcement of the Subordinated Debt Securities may be
limited by any applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws affecting
creditors' rights generally, by general principles of equity (whether
asserted in an action in equity or at law) and by rules of law
governing specific performance, injunctive relief, foreclosure,
receivership and other equitable remedies; and the Subordinated Debt
Securities conform in all material respects to the description thereof
contained in the Prospectus;
[3] the Declaration has been duly qualified under the Trust
Indenture Act, and the Declaration conforms in all material respects
to the description thereof in the Prospectus;
[4] the Securities and the Common Securities conform in all
material respects to the descriptions thereof in the Prospectus;
[5] each of the Guarantee Agreements, assuming in the case of
the Securities Guarantee Agreement due authorization, execution and
delivery of the Securities Guarantee by the Guarantee Trustee,
constitute valid and legally binding instruments, enforceable against
the Company in accordance with its terms, except to the extent
enforcement of the Guarantee Agreements may be limited by any
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors' rights
generally, by general principles of equity (whether asserted in an
action in equity or at law) and by rules of law governing specific
performance, injunctive relief, foreclosure, receivership and other
equitable remedies; each of the Guarantees and the Guarantee
Agreements conform in all material respects to the descriptions
thereof contained in the Prospectus; and the Securities Guarantee has
been duly qualified under the Trust Indenture Act;
[6] the execution, delivery and performance by the Company of
its obligations under the Underwriting Agreement and the Company
Documents and the consummation of the transactions contemplated
therein and compliance by the Company with its obligations thereunder
will not (A) conflict with the Company's Restated Articles of
Incorporation, as amended, or Bylaws, as amended, or (B) result in the
breach or violation of any terms or provisions of, or constitute a
default under, (i) the Company's Mortgage and Deed of Trust dated as
of June 1, 1939, to Citibank, N.A., as trustee, (ii) the Indenture,
dated as of July 1, 1988, of the Company to Chemical Bank, (iii) the
Lease Agreement, dated as of December 15, 1986, between the Company
and IRE-4 of New York, Inc. and all agreements of the Company
associated therewith, (iv) the Loan Agreement, dated as of October 1,
1989, between the Company and the City of Forsyth, Rosebud County,
Montana, and all agreements of the Company associated therewith, (v)
the Trust Company Agreement, dated as of November 21, 1990, between
the Company and Bankers Trust Company, and all agreements of the
Company associated therewith or (vi) the Agreement for Lease and the
Lease Agreement, each dated as of February 26, 1993, between the
Company and WP Funding, Limited Partnership, and all agreements of the
Company associated therewith;
[7] no approval, authorization, consent or other order of, or
filing with, any governmental agency of the State of New York or of
the United States of America is required under the respective laws of
such jurisdictions in order for (A) the Company Documents to
constitute valid and binding obligations of the Company and (B) the
Securities and the Common Securities to constitute valid and binding
obligations of the Trust;
[8] None of the Offerors is and, after giving effect to the
offering and sale of the Securities, will be, an "investment company"
or an entity "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended;
[9] the Registration Statement and Prospectus (except the
financial statements and other financial and statistical data
contained therein and any information furnished to the Company by the
Underwriters expressly for use therein, upon which we do not pass)
comply as to form in all material respects with the applicable
requirements of the Act and the Trust Indenture Act and the applicable
instructions, rules and regulations promulgated thereunder; the
Registration Statement has become effective under the Act and, to the
best of our knowledge, no proceedings for a stop order with respect
thereto are pending or threatened under Section 8(d) of the Act; and
[10] the statements made in the Prospectus under the caption
"Certain United States Federal Income Tax Considerations" constitute a
fair and accurate summary of the matters addressed therein, based upon
current law and the assumptions stated or referred to therein; and the
statements made in the Prospectus under the caption "Effect of
Obligations under the Subordinated Debt Securities and the Guarantee"
fairly present the information purported to be given.
We have acted as counsel to the Company primarily with respect to
general compliance with the federal securities laws and specific financing
and other corporate transactions. Our engagement regarding such compliance
was limited to advising the Company as to the requirements of such laws and
the rules and regulations of the SEC thereunder, assisting the Company in
the assessment of the materiality of particular matters brought to our
attention and generally reviewing, with a view toward such compliance,
drafts prepared by the Company of the documents incorporated by reference
into the Registration Statement and the Prospectus. We have not acted as
general counsel to the Company and have not, except for specific purposes,
attended meetings of the Board of Directors of the Company, or committees
thereof, or of officers of the Company; nor have we otherwise been in a
position to become aware of matters not specifically brought to our
attention by officers or other employees of, or other counsel to, the
Company.
Accordingly, in the course of the preparation by the Company of
the Registration Statement and the Prospectus, we participated in
conferences with certain officers and other employees of the Company, with
other counsel for the Company, with you and your counsel, and with Deloitte
& Touche LLP, the independent certified public accountants who examined the
financial statements included in the Registration Statement and the
Prospectus, but we made no independent verification of the accuracy or
completeness of the representations and statements made to us by the
Company or the information included by the Company in the Registration
Statement or the Prospectus, and we take no responsibility therefor, except
insofar as such information relates to us and as set forth in paragraphs
(1) through (5) and (10) above.
The nature and extent of our engagement by the Company and our
participation in the preparation of the Registration Statement and the
Prospectus, as described above, would not necessarily be adequate to bring
to our attention all matters which could be deemed material or to enable us
to make a valid assessment of the materiality of such matters as were
brought to our attention.
However, during the course of our examination of the Registration
Statement and the Prospectus, and our participation in the above-mentioned
conferences, nothing came to our attention which gives us reason to believe
that (A) when the Registration Statement became effective, the Registration
Statement contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, or that, as of the date of this
opinion, the Prospectus, as then amended or supplemented, contains an
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that we do not express any belief as to any financial statements
or other financial or statistical information, data or computations
contained in the Registration Statement or the Prospectus or as to any
statements contained in the Statements of Eligibility (Form T-1) under the
Trust Indenture Act with respect to the Debt Trustee, the Institutional
Trustee and the Guarantee Trustee; or (B) there exist any material
contracts which are required to be filed as exhibits to the Registration
Statement which have not been so filed.
The opinions enumerated above are limited to the laws of the
State of New York and the federal law of the United States of America
(excluding therefrom principles of conflicts of laws and state securities
or blue sky laws). To the extent that such opinions relate to or are
dependent upon matters governed by the laws of other States, they are based
upon the assumptions set forth above or otherwise upon the legal
conclusions set forth in the aforesaid opinions of Paine, Hamblen, Coffin,
Brooke & Miller LLP and Richards, Layton & Finger. For purposes of the
opinion expressed in Paragraph 6 above, we have assumed that any document
referred to therein which is not stated to be governed by the law of the
State of New York would be enforced as written.
Wilmington Trust Company, as Debt Trustee under the Indenture, is
hereby authorized to rely upon this opinion in connection therewith as if
it were addressed to it. This opinion is not being delivered for the
benefit of, nor may it be relied upon by, the holders of the Trust
Securities or the Subordinated Debt Securities or any other party to which
it is not specifically addressed or to which reliance is not expressly
permitted hereby.
Very truly yours,
REID & PRIEST LLP
EXHIBIT 3
[FORM OF OPINION OF RICHARDS, LAYTON & FINGER]
, 199
----------- --
[Names and Addresses of Underwriters]
Re: Washington Water Power Capital I
--------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for The Washington
Water Power Company, a Washington corporation ("WWP"), and Washington Water
Power Capital I, a Delaware business trust (the "Trust"), in connection
with the matters set forth herein. At your request, this opinion is being
furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals
or copies of the following:
(a) The Certificate of Trust of the Trust, dated as of November
4, 1996 (the "Certificate"), as filed in the office of the
Secretary of State of the State of Delaware (the "Secretary
of State") on November 4, 1996;
(b) The Declaration of Trust of the Trust, dated as of November
4, 1996, between WWP, as Sponsor, and the trustees of the
Trust named therein;
(c) The Amended and Restated Declaration of Trust of the Trust,
dated as of , 199 (including Annex I and
-------------- -
Exhibits A-1 and A-2 thereto) (the "Declaration"), among
WWP, as Sponsor, the trustees of the Trust named therein
(collectively, the "Trustees") and the holders, from time to
time, of undivided beneficial interests in the assets of the
Trust;
(d) The Underwriting Agreement, dated , 199 (the
------------ -
"Underwriting Agreement"), among the Trust, WWP and
, as Representative of the several underwriters
----------
named in Schedule A thereto (the "Underwriters");
(e) The Prospectus, dated , 199 (the "Prospectus"),
------------ -
and the Prospectus Supplement, dated , 199 (the
--------- --
"Prospectus Supplement"), relating to the %
---- ---------
Securities, Series A of the Trust representing undivided
beneficial interests in the assets of the Trust (each, a
"Security" and collectively, the "Securities"); and
(f) A Certificate of Good Standing for the Trust, dated
, 199 obtained from the Secretary of State.
------------- -
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (f) above. In
particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (f) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have
assumed that there exists no provision in any document that we have not
reviewed that is inconsistent with the opinions stated herein. We have
conducted no independent factual investigation of our own but rather have
relied solely upon the foregoing documents, the statements and information
set forth therein and the additional matters recited or assumed herein, all
of which we have assumed to be true, complete and accurate in all material
respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Declaration constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the
creation, operation and termination of the Trust, and that the Declaration
and the Certificate are in full force and effect and have not been amended,
(ii) except to the extent provided in paragraph 1 below, the due creation,
due formation or due organization, as the case may be, and valid existence
in good standing of each party to the documents examined by us under the
laws of the jurisdiction governing its creation, formation or organization,
(iii) the legal capacity of each natural person who is a party to the
documents examined by us, (iv) except to the extent provided in paragraph 4
below, that each of the parties to the documents examined by us has the
power and authority to execute and deliver, and to perform its obligations
under, such documents, (v) except to the extent provided in paragraph 5
below, that each of the parties to the documents examined by us has duly
authorized, executed and delivered such documents, (vi) the receipt by each
Person to whom a Security is to be issued by the Trust (the "Security
Holders") of a Securities Certificate for such Security and the payment for
the Security acquired by it, in accordance with the Declaration, and as
described in the Prospectus and the Prospectus Supplement, (vii) that the
Securities are issued and sold to the Security Holders in accordance with
the Declaration, and as described in the Prospectus and the Prospectus
Supplement, (viii) the receipt by the Person (the "Common Security Holder")
to whom a % Common Security of the Trust representing common undivided
--
beneficial interests in the assets of the Trust (each, a "Common Security"
and collectively, the "Common Securities") (the Securities and the Common
Securities being hereinafter collectively referred to as the "Trust
Securities") is to be issued by the Trust of a Common Securities
Certificate for such Common Security and the payment for the Common
Security acquired by it, in accordance with the Declaration, and as
described in the Prospectus and the Prospectus Supplement, (ix) that the
Common Securities are issued and sold to the Common Security Holder in
accordance with the Declaration, and as described in the Prospectus and the
Prospectus Supplement, (x) that the Trust derives no income from or
connected with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Business Trust Act and the filing of documents with the Secretary
of State) or employees in the State of Delaware, and (xi) that the Trust is
treated as a grantor trust for federal income tax purposes. We have not
participated in the preparation of the Prospectus or the Prospectus
Supplement and assume no responsibility for their contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our
opinions are rendered only with respect to Delaware laws and rules,
regulations and orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have
considered necessary or appropriate, and subject to the assumptions,
qualifications, limitations and exceptions set forth herein, we are of the
opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act,
and all filings required under the laws of the State of Delaware with
respect to the creation and valid existence of the Trust as a business
trust have been made.
2. Under the Delaware Business Trust Act and the Declaration,
the Trust has the trust power and authority to own its property and conduct
its business, all as described in the Prospectus and the Prospectus
Supplement.
3. The Declaration constitutes a valid and binding obligation
of WWP and the Trustees, and is enforceable against WWP and the Trustees,
in accordance with its terms.
4. Under the Delaware Business Trust Act and the Declaration,
the Trust has the trust power and authority (i) to execute and deliver, and
to perform its obligations under, the Underwriting Agreement, and (ii) to
issue and perform its obligations under the Trust Securities.
5. Under the Delaware Business Trust Act and the Declaration,
the execution and delivery by the Trust of the Underwriting Agreement, and
the performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary trust action on the part of the Trust.
6. The Securities have been duly authorized by the Declaration
and are duly and validly issued and, subject to the qualifications set
forth herein, fully paid and nonassessable undivided beneficial interests
in the assets of the Trust and are entitled to the benefits of the
Declaration. The Security Holders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Security
Holders may be obligated, pursuant to the Declaration, (i) to provide
indemnity and/or security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of Securities Certificates and
the issuance of replacement Securities Certificates, and (ii) to provide
security or indemnity in connection with requests of or directions to the
Institutional Trustee to exercise its rights and powers under the
Declaration.
7. Under the Delaware Business Trust Act, the certificate
attached to the Declaration as Exhibit A-1 is an appropriate form of
certificate to evidence ownership of the Securities.
8. The Common Securities have been duly authorized by the
Declaration and are duly and validly issued undivided beneficial interests
in the assets of the Trust.
9. Under the Delaware Business Trust Act and the Declaration,
the issuance of the Trust Securities is not subject to preemptive rights.
10. The issuance and sale by the Trust of the Trust Securities,
the execution, delivery and performance by the Trust of the Underwriting
Agreement, the consummation by the Trust of the transactions contemplated
thereby and compliance by the Trust with its obligations thereunder do not
violate (i) any of the provisions of the Certificate or the Declaration, or
(ii) any applicable Delaware law or administrative regulation.
11. No authorization, approval, consent or order of any Delaware
court or Delaware governmental authority or agency is required to be
obtained by the Trust solely in connection with the issuance and sale of
the Trust Securities.
12. Neither the issuance and sale by the Trust of the Trust
Securities, nor the performance by the Trust of the Underwriting Agreement
requires the filing with any court, governmental authority or agency under
the laws of the State of Delaware, except for the filing of the Certificate
which has been duly effected.
13. The Security Holders (other than those Security Holders who
reside or are domiciled in the State of Delaware) will have no liability
for income taxes imposed by the State of Delaware solely as a result of
their participation in the Trust, and the Trust will not be liable for any
income tax imposed by the State of Delaware.
The opinion expressed in paragraph 3 above is subject, as to
enforcement, to the effect upon the Declaration of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation,
fraudulent transfer and other similar laws relating to or affecting the
rights and remedies of creditors generally, (ii) principles of equity,
including applicable law relating to fiduciary duties (regardless of
whether considered and applied in a proceeding in equity or at law), and
(iii) the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution.
We consent to your relying as to matters of Delaware law upon
this opinion in connection with the Underwriting Agreement. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any
purpose.
Very truly yours,
EXHIBIT 4
[FORM OF OPINION OF RICHARDS, LAYTON & FINGER]
, 199
------------- -
[Names and Addresses of Underwriters]
Re: Washington Water Power Capital I
--------------------------------
Ladies and Gentlemen:
We have acted as counsel to Wilmington Trust Company, a Delaware
banking corporation ("Wilmington Trust"), in connection with the
transactions contemplated by (i) the Amended and Restated Declaration of
Trust, dated as of , 199 (the "Declaration"), among The
------------- -
Washington Water Power Company, a Washington corporation ("WWP"),
Wilmington Trust, as Institutional Trustee and Delaware Trustee, the
regular trustees named therein and the holders, from time to time, of
undivided beneficial interests in the assets of Washington Water Power
Capital I, a Delaware business trust (the "Trust"), (ii) the Indenture,
dated as of , 199 (the "Indenture"), between WWP and
------------ -
Wilmington Trust, as trustee, and (iii) the Securities Guarantee Agreement,
dated as of , 199 (the "Securities Guarantee"), between WWP and
----------- -
Wilmington Trust, as trustee. This opinion is being furnished to you
pursuant to Section 6(f) of the Underwriting Agreement, dated ,
------------
199 (the "Underwriting Agreement"), among WWP, the Trust and Merrill Lynch
-
& Co., individually and as Representative of the several Underwriters named
in Schedule A to the Underwriting Agreement. Capitalized terms used herein
and not otherwise defined are used as defined in the Declaration, except
that reference herein to any document shall mean such document as in effect
on the date hereof.
We have examined originals or copies of the Declaration, the
Securities Guarantee and the Indenture. We have also examined originals or
copies of such other documents and such corporate records, certificates and
other statements of governmental officials and corporate officers and other
representatives of Wilmington Trust as we have deemed necessary or
appropriate for the purposes of this opinion. Moreover, as to certain
facts material to the opinions expressed herein, we have relied upon the
representations and warranties contained in the documents referred to in
this paragraph.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary or appropriate, and
subject to the assumptions, exceptions and qualifications set forth below,
we advise you that, in our opinion:
1. Wilmington Trust is duly incorporated and is validly
existing in good standing as a banking corporation with trust powers under
the laws of the State of Delaware.
2. Wilmington Trust has the power and authority to execute,
deliver and perform its obligations under the Declaration, the Indenture
and the Securities Guarantee.
3. Each of the Declaration, the Indenture and the Securities
Guarantee has been duly authorized, executed and delivered by Wilmington
Trust and constitutes a legal, valid and binding obligation of Wilmington
Trust, enforceable against Wilmington Trust in accordance with its terms.
4. The execution, delivery and performance by Wilmington Trust
of the Declaration, the Indenture and the Securities Guarantee do not
conflict with or constitute a breach of the charter or by-laws of
Wilmington Trust.
5. No consent, approval or authorization of, or registration
with or notice to, any governmental authority or agency of the State of
Delaware or the United States of America governing the banking or trust
powers of Wilmington Trust is required for the execution, delivery or
performance by Wilmington Trust of the Declaration, the Indenture and the
Securities Guarantee.
The foregoing opinions are subject to the following assumptions,
exceptions and qualifications:
A. We are admitted to practice law in the State of Delaware and
we do not hold ourselves out as being experts on the law of any other
jurisdiction. The foregoing opinions are limited to the laws of the State
of Delaware and the federal laws of the United States of America governing
the banking and trust powers of Wilmington Trust (except that we express no
opinion with respect to (i) state securities or blue sky laws and (ii)
federal securities laws, including, without limitation, the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, the
Trust Indenture Act of 1939, as amended, and the Investment Company Act of
1940, as amended), and we have not considered and express no opinion on the
laws, rules and regulations of any other jurisdiction. Insofar as the
foregoing opinions relate to the validity and enforceability of the
Indenture and the Securities Guarantee expressed to be governed by the laws
of the State of New York, we have assumed that such document is legal,
valid, binding and enforceable in accordance with its terms under such laws
(as to which we express no opinion).
B. The foregoing opinions regarding enforceability are subject
to (i) applicable bankruptcy, insolvency, reorganization, moratorium,
receivership, fraudulent transfer and similar laws relating to or affecting
the rights and remedies of creditors generally, (ii) principles of equity,
including applicable law relating to fiduciary duties (regardless of
whether considered and applied in a proceeding in equity or at law), and
(iii) the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution.
C. We have assumed the due authorization, execution and
delivery by each of the parties thereto, other than Wilmington Trust, of
each of the Declaration, the Indenture and the Securities Guarantee and
that each of such parties has the power and authority to execute, deliver
and perform each such document.
D. We have assumed that all signatures on documents examined by
us are genuine, that all documents submitted to us as originals are
authentic, and that all documents submitted to us as copies or specimens
conform with the originals, which facts we have not independently verified.
E. We express no opinion as to the creation, attachment,
perfection or priority of any mortgage or security interest or the nature
or validity of title to any property.
F. We have not participated in the preparation of any offering
materials with respect to the Trust Securities and we assume no
responsibility for their contents.
This opinion may be relied upon by you in connection with the
matters set forth herein. Except as stated above, without our prior
written consent, this opinion may not be furnished or quoted to, or relied
upon by, any other Person for any purpose.
Very truly yours,
EXHIBIT 5
[CONTENTS OF LETTER OF DELOITTE & TOUCHE]
The letter of Deloitte & Touche will state in effect that:
(1) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Act
and the Rules and Regulations.
(2) In their opinion, the financial statements audited by them
and incorporated by reference in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act,
the Exchange Act and the Rules and Regulations.
(3) On the basis of procedures referred to in such letter,
including a reading of the latest available minutes of the Board of
Directors of the Company and a reading of the latest available interim
financial statements of the Company and inquiries of officials of the
Company responsible for financial and accounting matters, nothing caused
them to believe that:
(a) the unaudited income statement and balance sheet amounts, if
any, included in the Prospectus were not determined on a basis
substantially consistent with that of the corresponding amounts in the
audited financial statements incorporated by reference in the
Prospectus;
(b) the unaudited condensed financial statements included in the
Company's Quarterly Reports on Form 10-Q, if any, incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations thereunder
applicable to reports on Form 10-Q or are not in conformity with
generally accepted accounting principles on a basis substantially
consistent with that of the audited financial statements incorporated
by reference in the Prospectus;
(c) at the date of the latest available internal balance sheet
of the Company, there was any change in the capital stock, notes
payable or long-term debt or any decrease in the net assets of the
Company, or, at a subsequent specified date not more than five days
prior to the date of such letter, there was a change in the capital
stock, notes payable or long-term debt of the Company, in each case as
compared with the amounts shown in the most recent balance sheet of
the Company incorporated by reference in the Prospectus, except for
(i) increases in capital stock resulting from the issuance of shares
pursuant to employee benefit plans and the Company's Dividend
Reinvestment and Stock Purchase Plan, (ii) decrease in long-term debt
resulting from amortization of debt premium or increases in long-term
debt premium or increases in long-term debt resulting from draw-downs
of funds held in trust, (iii) decreases in net assets resulting from
the declaration of dividends, (iv) changes or decreases which the
Prospectus discloses have occurred or may occur and (v) such other
changes or decreases as may be set forth in such letter; or
(d) at the date of the latest available internal balance sheet
of the Company, there was any decrease, as compared with the most
recent twelve-month period for which operating revenues and net income
are included or incorporated by reference in the Prospectus, in such
amounts, except in all cases for changes or decreases which the
Prospectus discloses have occurred or may occur or as may be set forth
in set letter.
(4) In addition to their examination referred to in their report
in the Registration Statement and Prospectus and the procedures referred to
in (3) above, they have carried out certain other specified procedures, not
constituting an audit, with respect to the dollar amounts, percentages and
other financial information, (in each case to the extent that such dollar
amounts, percentages and other financial information, either directly or by
analysis or computation, are derived from the general accounting records of
the Company) which appear (i) in the Prospectus under the caption "The
Washington Water Power Company Selected Historical Financial Information"
and (ii) in the Company's annual report on Form 10-K for its most recent
fiscal year in Item 1, "Business", Item 6, "Selected Financial Data" and
Item 7 "Managements's Discussion and Analysis of Financial Condition and
Results of Operations" and have found such dollar amounts, percentages and
financial information to be in agreement with the accounting records of the
Company.
Exhibit 4(a)-7
========================================================================
AMENDED AND RESTATED DECLARATION
OF TRUST
WASHINGTON WATER POWER CAPITAL I
Dated as of , 199
-------- -
========================================================================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . -2-
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . -8-
SECTION 2.2 Lists of Holders of Trust Securities . . . . . . . -8-
SECTION 2.3 Reports by the Institutional Trustee . . . . . . . -9-
SECTION 2.4 Periodic Reports to Institutional
Trustee . . . . . . . . . . . . . . . . . . . . . . -9-
SECTION 2.5 Evidence of Compliance with Conditions Precedent . -9-
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . -9-
SECTION 2.7 Notice of Event of Default . . . . . . . . . . . -10-
ARTICLE III
ORGANIZATION
SECTION 3.1 Name . . . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.2 Office . . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.3 Purpose . . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.4 Authority . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.5 Title to Property of the Trust . . . . . . . . . -12-
SECTION 3.6 Powers and Duties of the Regular
Trustees . . . . . . . . . . . . . . . . . . . . -12-
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees . . . . . . . . . . . . . . . . . . . . -15-
SECTION 3.8 Powers and Duties of the Institutional
Trustee . . . . . . . . . . . . . . . . . . . . . -16-
SECTION 3.9 Certain Duties and Responsibilities. . . . . . . -19-
SECTION 3.10 Certain Rights of Institutional Trustee . . . . . -21-
SECTION 3.11 Delaware Trustee . . . . . . . . . . . . . . . . -24-
SECTION 3.12 Execution of Documents . . . . . . . . . . . . . -25-
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust
Securities . . . . . . . . . . . . . . . . . . . -25-
SECTION 3.14 Duration of Trust . . . . . . . . . . . . . . . . -25-
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . -25-
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities . . . . . -27-
SECTION 4.2 Responsibilities of the Sponsor . . . . . . . . . -28-
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees . . . . . . . . . . . . . . . -28-
SECTION 5.2 Delaware Trustee . . . . . . . . . . . . . . . . -29-
SECTION 5.3 Institutional Trustee; Eligibility . . . . . . . -29-
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally . . . . . . . . . . . -30-
SECTION 5.5 Regular Trustees . . . . . . . . . . . . . . . . -31-
SECTION 5.6 Delaware Trustee. . . . . . . . . . . . . . . . . -31-
SECTION 5.7 Appointment, Removal and Resignation of Trustees. -31-
SECTION 5.8 Vacancies among Trustees . . . . . . . . . . . . -33-
SECTION 5.9 Effect of Vacancies . . . . . . . . . . . . . . . -33-
SECTION 5.10 Meetings. . . . . . . . . . . . . . . . . . . . . -33-
SECTION 5.11 Delegation of Power . . . . . . . . . . . . . . . -34-
Section 5.12 Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . -34-
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions . . . . . . . . . . . . . . . . . . -35-
ARTICLE VII
ISSUANCE OF TRUST SECURITIES
SECTION 7.1 General Provisions Regarding Trust Securities . . -35-
SECTION 7.2 Paying Agent . . . . . . . . . . . . . . . . . . -36-
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust . . . . . . . . . . . . . . -37-
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Trust Securities . . . . . . . . . . -38-
SECTION 9.2 Transfer of Certificates . . . . . . . . . . . . -39-
SECTION 9.3 Deemed Trust Security Holders . . . . . . . . . . -39-
SECTION 9.4 Security Certificates . . . . . . . . . . . . . . -40-
SECTION 9.5 Mutilated, Destroyed, Lost or Stolen Certificates -40-
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF Trust SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability . . . . . . . . . . . . . . . . . . . . -41-
SECTION 10.2 Exculpation . . . . . . . . . . . . . . . . . . . -41-
SECTION 10.3 Fiduciary Duty . . . . . . . . . . . . . . . . . -42-
SECTION 10.4 Indemnification . . . . . . . . . . . . . . . . . -43-
SECTION 10.5 Outside Businesses . . . . . . . . . . . . . . . -46-
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year . . . . . . . . . . . . . . . . . . . -47-
SECTION 11.2 Certain Accounting Matters . . . . . . . . . . . -47-
SECTION 11.3 Banking . . . . . . . . . . . . . . . . . . . . . -48-
SECTION 11.4 Withholding . . . . . . . . . . . . . . . . . . . -48-
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments . . . . . . . . . . . . . . . . . . . -49-
SECTION 12.2 Meetings of the Holders of Trust Securities;
Action by Written Consent . . . . . . . . . . . . -51-
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional
Trustee . . . . . . . . . . . . . . . . . . . . . -53-
SECTION 13.2 Representations and Warranties of Delaware
Trustee . . . . . . . . . . . . . . . . . . . . . -54-
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices. . . . . . . . . . . . . . . . . . . . . -54-
SECTION 14.2 Governing Law . . . . . . . . . . . . . . . . . . -56-
SECTION 14.3 Intention of the Parties . . . . . . . . . . . . -56-
SECTION 14.4 Headings . . . . . . . . . . . . . . . . . . . . -56-
SECTION 14.5 Successors and Assigns . . . . . . . . . . . . . -56-
SECTION 14.6 Partial Enforceability . . . . . . . . . . . . . -56-
SECTION 14.7 Counterparts . . . . . . . . . . . . . . . . . . -57-
ANNEX I TERMS OF TRUST SECURITIES . . . . . . . . . . . . . . . I-1
EXHIBIT A-1 FORM OF SECURITY CERTIFICATE . . . . . . . . . . . . . A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE . . . . . . . . . A2-1
CROSS-REFERENCE TABLE*
----------------------
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
------------------- -----------
310(a) . . . . . . . . . . . . . . . . . . 5.3(a)
310(b) . . . . . . . . . . . . . . . . . . 5.3(c)
310(c) . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . 1.1 (Definition
of Officer's Certificate)
314(f) . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . 3.9(a)
315(b) . . . . . . . . . . . . . . . . . . 2.7
315(c) . . . . . . . . . . . . . . . . . . 3.9(b)
315(d) . . . . . . . . . . . . . . . . . . 3.9(c)
316(a) . . . . . . . . . . . . . . . . . . 2.6; Annex I,
Section 5
316(c) . . . . . . . . . . . . . . . . . . 3.6(e)
317(a) . . . . . . . . . . . . . . . . . . 3.8(h)
317(b) . . . . . . . . . . . . . . . . . . 3.8(i)
318 . . . . . . . . . . . . . . . . . . . . 2.1
---------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
WASHINGTON WATER POWER CAPITAL I
, 199
--------- -
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated
and effective as of , 199 , by the Trustees (as defined herein),
--------- -
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established Washington
Water Power Capital I (the "Trust"), a trust under the Delaware Business
Trust Act pursuant to a Declaration of Trust dated as of November 4, 1996
(the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on November 4, 1996, for the
sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have
been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the
Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and
that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will
be held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
-----------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes
and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
---------
405 of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
-----
"Authorized Officer" of a Person means any Person that is
------------------
authorized to legally bind such Person.
"Business Day" means any day other than Saturday, Sunday or any
------------
other day on which banking institutions in the City of Wilmington, Delaware
and The City of New York are authorized or required by any applicable law
to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to
------------ -- ---
time, or any successor legislation.
"Certificate" means a Common Security Certificate or a Security
-----------
Certificate.
"Closing Date" means the "Closing Time" and each "Date of
------------
Delivery" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
----
time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
----------
"Common Securities" has the meaning specified in Section 7.1.(a).
-----------------
"Common Securities Guarantee" means the guarantee agreement to be
---------------------------
dated as of ________, 199_ of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a certificate in fully
---------------------------
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b)
--------------------------
any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of
any Regular Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Institutional
----------------------
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at
the date of execution of this Agreement is located at Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii)
the Trust's Affiliates; and (b) any Holder of Trust Securities.
"Debenture Issuer" means The Washington Water Power Company, a
----------------
Washington corporation, or any successor entity resulting from any
consolidation, amalgamation, merger or other business combination, in its
capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a Delaware
-----------------
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
----------
Debenture Issuer under the Indenture to be held by the Institutional
Trustee.
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Depositary" has the meaning set forth in Section 9.1.
----------
"Distribution" means a distribution payable to Holders of Trust
------------
Securities in accordance with Section 6.1.
"Event of Default", in respect of the Trust Securities, means an
----------------
Event of Default as defined in the Indenture, so long as the same shall be
continuing under the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
----------------------------
Section 10.4(b).
"Guarantees" means the Common Securities Guarantee and the
----------
Securities Guarantee.
"Holder" means a Person in whose name a Certificate representing
------
a Trust Security is registered, such Person being a beneficial owner within
the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
------------------
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of _______ 1, 199_,
---------
between the Debenture Issuer and the Debenture Trustee, as supplemented.
"Institutional Trustee" has the meaning set forth in Section 5.3.
---------------------
"Institutional Trustee Account" has the meaning set forth in
-----------------------------
Section 3.8(c)(i).
"Investment Company" means an investment company as defined in
------------------
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
----------------------
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"Majority in liquidation amount of the Trust Securities" means,
------------------------------------------------------
except as provided in the terms of the Securities or by the Trust Indenture
Act, Holder(s) of outstanding Trust Securities voting together as a single
class or, as the context may require, Holders of outstanding Securities or
Holders of outstanding Common Securities voting separately as a class, who
are the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) of all outstanding Trust Securities
of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of
------------------
the Trust Securities as set forth in Annex I.
"Officer's Certificate" means, with respect to any Person, a
---------------------
certificate signed by an Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement of the nature and scope of the examination or
investigation upon which the statements contained in such Officer's
Certificate are based;
(c) a statement that, in the opinion of such officer, such officer
has made such examination or investigation as is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
------------
"Person" means a legal person, including any individual,
------
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Quorum" means a majority of the Regular Trustees or, if there
------
are only two Regular Trustees, both of them.
"Registrar" means the registrar for the Securities appointed by
---------
the Trust and shall initially be Wilmington Trust Company.
"Regular Trustee" has the meaning set forth in Section 5.1.
---------------
"Related Party" means, with respect to the Sponsor, any direct or
-------------
indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of
the Sponsor.
"Responsible Officer" means, with respect to the Institutional
-------------------
Trustee, any officer of the Institutional Trustee assigned by the
Institutional Trustee to administer its corporate trust matters.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or
---------
any successor rule or regulation.
"Securities" has the meaning specified in Section 7.1(a).
----------
"Securities Act" means the Securities Act of 1933, as amended
--------------
from time to time, or any successor legislation.
"Security Certificate" means a certificate representing a
--------------------
Security substantially in the form of Exhibit A-1.
"Securities Guarantee" means the guarantee agreement to be dated
--------------------
as of ________, 199_, of the Sponsor in respect of the Securities.
"Sponsor" means The Washington Water Power Company, a Washington
-------
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as
sponsor of the Trust.
"Tax Event" has the meaning set forth in Annex I hereto.
---------
"10% in liquidation amount of the Trust Securities" means, except
-------------------------------------------------
as provided in the terms of the Securities or by the Trust Indenture Act,
Holder(s) of outstanding Trust Securities voting together as a single class
or, as the context may require, Holders of outstanding Securities or
Holders of outstanding Common Securities voting separately as a class, who
are the record owners of 10% or more of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) of all outstanding Trust Securities
of the relevant class.
"Transfer Agent" means the transfer agent for the Securities
--------------
appointed by the Trust and shall initially be Wilmington Trust Company.
"Treasury Regulations" means the income tax regulations,
--------------------
including temporary and proposed regulations, promulgated under the Code by
the United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee
or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended from time to time, or any successor legislation.
"Trust Property" means (i) the Debentures, (ii) any cash or
--------------
deposit in, or owing to, the Institutional Trustee Account and (iii) all
proceeds and rights in respect of the foregoing and any other property and
assets for the time being held by the Institutional Trustee pursuant to the
trusts of this Declaration.
"Trust Securities" means the Common Securities and the
----------------
Securities.
"Underwriting Agreement" means the Underwriting Agreement for the
----------------------
offering and sale of Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall,
to the extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is
a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
SECTION 2.2 Lists of Holders of Trust Securities.
------------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Institutional Trustee (i) within 14 days after
each record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of
the Holders of the Trust Securities ("List of Holders") as of such record
date; provided, however, that neither the Sponsor nor the Regular Trustees
on behalf of the Trust shall be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most recent List
of Holders given to the Institutional Trustee by the Sponsor and the
Regular Trustees on behalf of the Trust; and provided, further, that in any
event such List of Holders will be provided to the Institutional Trustee
not less than once every 6 months pursuant to this Section 2.2(a)(i), and
(ii) at any other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days before such
List of Holders is given to the Institutional Trustee. The Institutional
Trustee shall preserve, in as current a form as is reasonably practicable,
all information contained in Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such capacity)
provided, however, that the Institutional Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
------------------------------------
Within 60 days after May 15 of each year, the Institutional
Trustee shall provide to the Holders of the Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act.
The Institutional Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
-----------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such documents, reports
and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Declaration that relate to any of the matters set forth in Section 314(c)
of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the
form of an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of
Securities may, by vote, on behalf of the Holders of all of the Securities,
waive any past Event of Default in respect of the Securities and its
consequences; provided, however, that if the underlying Event of Default
under the Indenture is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable.
Upon such waiver, any such default shall cease to exist, and any
Event of Default with respect to the Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Securities or impair any right consequent
thereon. Any waiver by the Holders of the Securities of an Event of
Default with respect to the Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Event of Default
with respect to the Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of the Common
Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the
Common Securities and its consequences; provided, however, that if the
underlying Event of Default under the Indenture is not waivable under the
Indenture, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided below
in this Section 2.6(b), the Event of Default under the Declaration shall
also not be waivable; and
provided, further, that, each Holder of Common Securities will be deemed to
have waived any such Event of Default and all Events of Default with
respect to the Common Securities and its consequences until all Events of
Default with respect to the Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the Holders of the Securities and only the Holders of
the Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Trust Securities. Subject to the
foregoing provisions of this Section 2.6(b), upon such waiver, any such
default shall cease to exist and any Event of Default with respect to the
Common Securities arising therefrom shall be deemed to have been cured for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Securities
shall constitute a waiver of the corresponding Event of Default under this
Declaration.
SECTION 2.7 Notice of Event of Default.
--------------------------
The Institutional Trustee shall give notice of any default
hereunder to the Holders of Trust Securities in the manner and to the
extent required to do so by the Trust Indenture Act, unless such default
shall have been cured or waived; provided, however, that in the case of any
default hereunder arising out of a default of the character specified in
Section 701(c) of the Indenture, no such notice to Holders shall be given
until at least seventy-five (75) days after the occurrence thereof; and
provided, further, that, subject to the provisions of Section 3.9, the
Institutional Trustee shall not be deemed to have knowledge of such default
unless either (i) a Responsible Officer of the Institutional Trustee shall
have actual knowledge of such default or (ii) the Institutional Trustee
shall have received written notice thereof from the Debenture Issuer, the
Sponsor, any Regular Trustee or any Holder. For the purpose of this
Section, the term "default" means any event which is, or after notice or
lapse of time, or both, would become, an Event of Default.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust is named "Washington Water Power Capital I," as such
name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by
the Regular Trustees.
SECTION 3.2 Office.
------
The address of the principal office of the Trust is c/o The
Washington Water Power Company, 1411 East Mission Avenue, Spokane,
Washington 99202. On ten Business Days' written notice to the Holders of
Trust Securities, the Regular Trustees may designate another principal
office.
SECTION 3.3 Purpose.
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The exclusive purposes and functions of the Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale to
acquire the Debentures, and (b) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to
be undertaken) any activity that would cause the Trust to be treated for
United States federal income tax purposes as an association taxable as a
corporation.
SECTION 3.4 Authority.
---------
Subject to the limitations provided in this Declaration and to
the specific duties of the Institutional Trustee, the Regular Trustees
shall have exclusive and complete authority to carry out the purposes of
the Trust. An action taken by the Regular Trustees in accordance with
their powers shall constitute the act of and serve to bind the Trust and an
action taken by the Institutional Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind
the Trust. In dealing with the Trustees acting on behalf of the Trust, no
person shall be required to inquire into the authority of the Trustees to
bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Debentures
and the Institutional Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of
the Trust, but shall have an undivided beneficial interest in the assets of
the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
-----------------------------------------
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities and the Common Securities
in accordance with this Declaration; provided, however, that, the Trust may
issue no more than one series of Securities and no more than one series of
Common Securities and, provided further, that there shall be no interests
in the Trust other than the Trust Securities, and the issuance of Trust
Securities shall be limited to a simultaneous issuance of both Securities
and Common Securities on each Closing Date;
(b) in connection with the issuance and sale of the Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Securities in any state in
which the Sponsor has determined to qualify or register such
Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to The New York Stock Exchange, Inc. or any other national stock
exchange or the Nasdaq Stock Market's National Market for listing upon
notice of issuance of any Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Securities under
Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement providing
for the sale of the Securities;
(c) to acquire the Debentures with the proceeds of the sale of
the Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause the Debentures to be registered in the name of
the Institutional Trustee as a Trustee hereunder;
(d) to give the Sponsor and the Institutional Trustee prompt
written notice of the occurrence of a Tax Event; provided, however, that
the Regular Trustees shall consult with the Sponsor and the Institutional
Trustee before taking or refraining from taking any Ministerial Action in
relation to a Tax Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and
with respect to, for the purposes of 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Securities and Holders of Common
Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the Trust
Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against
the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by 314(a)(4) of
the Trust Indenture Act to the Institutional Trustee, which certificate may
be executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar
and Transfer Agent for the Securities or to appoint a Paying Agent for the
Trust Securities as provided in Section 7.2;
(m) to give prompt written notice to the Holders of the Trust
Securities of any notice received from the Debenture Issuer of its election
to defer payments of interest on the Debentures by extending the interest
payment period under the Indenture;
(n) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the
laws of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust not to be treated for United States
federal income tax purposes as an association taxable as a
corporation; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes;
provided, however, that such action does not materially and adversely
affect the interests of Holders; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular Trustees,
on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none
of the powers or the authority of the Institutional Trustee set forth in
Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
The Trust shall not, and the Trustees (including the
Institutional Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall
not and the Trustees (including the Institutional Trustee) shall cause the
Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Trust
Securities pursuant to the terms of this Declaration and of the Trust
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Trust Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Trust Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures,
(B) waive any past default that is waivable under the Indenture, (C)
exercise any right to rescind or annul any declaration that the
principal of all the Debentures shall be immediately due and payable,
or (D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required
unless the Trust shall have received an opinion of counsel to the
effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes
the Trust will be treated as an association taxable as a corporation.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
----------------------------------------------
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Institutional Trustee in trust for the
benefit of the Holders of the Trust Securities. The right, title and
interest of the Institutional Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as
Institutional Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right,
title and interest in the Debentures to the Regular Trustees or to the
Delaware Trustee (it being understood, however, that the entity acting as
Institutional Trustee may also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name of and
under the exclusive control of the Institutional Trustee on behalf of
the Holders of the Trust Securities and, upon the receipt of payments
of funds made in respect of the Debentures held by the Institutional
Trustee, deposit such funds into the Institutional Trustee Account and
make payments to the Holders of the Trust Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds
in the Institutional Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Institutional
Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Securities by a nationally
recognized statistical rating organization, within the meaning of Rule
436(g)(2) under the Securities Act or any successor rule or
regulation;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Securities and the
Common Securities to the extent the Debentures are redeemed or mature;
and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Trust Securities, engage
in such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of Trust
Securities upon the occurrence of certain special events (as may be
defined in the terms of the Trust Securities) arising from a change in
law or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Trust Securities.
(d) The Institutional Trustee shall take all actions and
perform all duties that may be specifically required of the Institutional
Trustee pursuant to the terms of the Trust Securities.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration
or the Trust Indenture Act, and if such Institutional Trustee shall have
failed to take such Legal Action, the Holders of the Securities may take
such Legal Action, to the same extent as if such Holders of Securities held
a principal amount of Debentures equal to the liquidation amount of such
Securities, without first proceeding against the Institutional Trustee or
the Trust; provided, however, that if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on the date
such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Securities may
directly institute a proceeding for enforcement of payment to such Holder
of the principal of or interest on the Debentures having a principal amount
equal to the aggregate liquidation amount of the Securities of such Holder
(a "Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the
Holders of the Common Securities will be subrogated to the rights of such
Holder of Securities to the extent of any payment made by the Issuer to
such Holder of Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee
unless either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Trust Securities
pursuant to the terms of the Trust Securities; or
(ii) a Successor Institutional Trustee has been appointed and
has accepted that appointment in accordance with Section 5.7.
(g) The Institutional Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Institutional Trustee occurs and is continuing,
the Institutional Trustee shall, for the benefit of Holders of the Trust
Securities, enforce its rights as holder of the Debentures subject to the
rights of the Holders pursuant to the terms of such Trust Securities.
(h) The Institutional Trustee shall be authorized to undertake
all actions set forth in Section 317(a) of the Trust Indenture Act.
(i) The Institutional Trustee may, with the consent of the
Regular Trustees, authorize one or more Persons (each, a "Paying Agent") to
pay Distributions, redemption payments or liquidation payments on behalf of
the Trust with respect to all Trust Securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any Paying
Agent may be removed by the Institutional Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at
any time by the Institutional Trustee.
(j) Subject to this Section 3.8, the Institutional Trustee
shall have none of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Institutional
Trustee shall not take any action that is inconsistent with the purposes
and functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities.
-----------------------------------
(a) The Institutional Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and in the terms of the Trust
Securities and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived), the Institutional Trustee
shall exercise such of the rights and powers vesting in it by this
Declaration, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Institutional Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Institutional
Trustee shall be determined solely by the express provisions of
this Declaration and in the terms of the Trust Securities, and
the Institutional Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Declaration, and no implied covenants or
obligations shall be read into this Declaration against the
Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; provided, however, that in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform
to the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the
Institutional Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Institutional Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of at least a Majority in
liquidation amount of the outstanding Trust Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee or exercising any trust or
power conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require any of the
Trustees 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;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Trust Property
shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to
the Institutional Trustee under this Declaration, the Trust Indenture
Act and, to the extent applicable, Rule 3a-7 under the Investment
Company Act;
(vi) the Institutional Trustee shall have no duty or liability
for, or with respect to the value, genuineness, existence or
sufficiency of, the Trust Property or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account established by the Institutional Trustee
pursuant to this Declaration and except to the extent otherwise
required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for the default or misconduct of the
Regular Trustees or the Sponsor.
(c) All payments made by the Institutional Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the income
and proceeds from the Trust Property to enable the Institutional Trustee or
Paying Agent to make payments in accordance with the terms hereof. Each
Holder, by its acceptance of a Trust Security, agrees that it will look
solely to the income and proceeds from the Trust Property to the extent
available for distribution to it as herein provided and that the Trustees
are not personally liable to it for any amount distributable in respect of
any Trust Security or for any other liability in respect of any Trust
Security. This Section 3.9(c) does not limit the liability of the Trustees
expressly set forth elsewhere in this Declaration or, in the case of the
Institutional Trustee, in the Trust Indenture Act.
(d) No Regular Trustee shall be liable for any act or omission
to act hereunder, except for its own gross negligence or wilful misconduct.
SECTION 3.10 Certain Rights of Institutional Trustee.
---------------------------------------
Subject to the provisions of Section 3.9 and to the applicable
provisions of the Trust Indenture Act:
(a) the Institutional Trustee may rely and shall be protected
in acting or refraining from acting in good faith upon any resolution,
opinion of counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, appraisal, 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) if (A) in performing its duties under this Declaration the
Institutional Trustee is required to decide between alternative
courses of action or (B) in construing any of the provisions in this
Declaration the Institutional Trustee finds the same ambiguous or
inconsistent with any other provisions contained herein or (C) the
Institutional Trustee is unsure of the application of any provision of
this Declaration, then, except as to any matter as to which the
Holders of Securities are entitled to vote under the terms of this
Declaration, the Institutional Trustee shall deliver a notice to the
Sponsor requesting written instructions of the Sponsor as to the
course of action to be taken. The Institutional Trustee shall take
such action, or refrain from taking such action, as the Institutional
Trustee shall be instructed in writing to take, or to refrain from
taking, by the Sponsor; provided, however, that if the Institutional
Trustee does not receive such instructions of the Sponsor within 10
Business Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which to the extent
practicable shall not be less than 2 Business Days), it may, but shall
be under no duty to, take or refrain from taking such action not
inconsistent with this Declaration as it shall deem advisable and in
the best interests of the Holders, in which event the Institutional
Trustee shall have no liability except for its own bad faith,
negligence or wilful misconduct;
(c) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Institutional Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officer's Certificate;
(d) the Institutional Trustee may consult with counsel of its
selection, 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 Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any of the Holders pursuant to this
Declaration, unless such Holders shall have offered to the
Institutional Trustee reasonable security or indemnity against the
costs, expenses (including reasonable attorneys' fees and expenses)
and liabilities which might be incurred by it in complying with such
request or direction;
(f) the Institutional 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, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine, unless requested in writing to do so by
one or more Holders, but the Institutional Trustee, in its discretion,
may make such further inquiry or investigation into such facts or
matters as it may see fit;
(g) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Institutional 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;
provided, however, that the Institutional Trustee shall be responsible
for its own negligence or recklessness with respect to selection of
any agent or attorney appointed by it hereunder;
(h) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration;
(i) the Institutional Trustee shall not be charged with
knowledge of any default or Event of Default with respect to the Trust
Securities unless either (A) a Responsible Officer of the
Institutional Trustee shall have actual knowledge of the default or
Event of Default or (B) written notice of such default or Event of
Default shall have been given to the Institutional Trustee by the
Sponsor, the Regular Trustees or any Holder;
(j) no provision of this Declaration shall be deemed to impose
any duty or obligation on the Institutional 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 Institutional 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; and no permissive
or discretionary power or authority available to the Institutional
Trustee shall be construed to be a duty;
(k) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Institutional Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured to
it under the terms of this Declaration or adequate indemnity against
such risk or liability is not reasonably assured to it;
(l) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any securities) (or any
rerecording, refiling or reregistration thereof);
(m) the Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction; and
(n) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Institutional Trustee (A) may request
instructions from the Holders, which instructions may only be given by
the Holders of the same amount of the Trust Securities as would be
entitled to direct the Institutional Trustee under the terms of this
Declaration in respect of such remedies, rights or actions, (B) may
refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Institutional Trustee
described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
----------------------
Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act, a majority of or, if there
are only two, any Regular Trustee or, if there is only one, such Regular
Trustee is authorized to execute on behalf of the Trust any documents that
the Regular Trustees have the power and authority to execute pursuant to
Section 3.6; provided that, the registration statement referred to in
-------- ----
Section 3.6(b)(i), including any amendments thereto, shall be signed by all
of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust
-------------------------------------------------
Securities.
----------
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not
assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust
or any part thereof. The Trustees make no representations as to the
validity or sufficiency of this Declaration or the Trust Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for forty-five (45) years from
the Closing Date.
SECTION 3.15 Mergers.
-------
(a) The Trust may not merge, consolidate or amalgamate with or
into, or enter into any other business combination with, or be replaced by,
or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other body, except as described in Section
3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees and without
the consent of the Holders of the Trust Securities, the Delaware Trustee or
the Institutional Trustee, merge, consolidate or amalgamate with or into,
or enter into any other business combination with, or be replaced by, or
convey, transfer or lease its properties and assets substantially as an
entirety to, a trust organized as such under the laws of any state;
provided, however, that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Trust Securities; or
(B) substitutes for the Trust Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities rank
the same as the Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly appoints a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Securities or any Successor Securities are listed, or
any Successor Securities will be listed upon notification of issuance,
on any national securities exchange or with another organization on
which the Securities are then listed or quoted, if any;
(iv) such merger, consolidation, amalgamation, other business
combination, replacement, conveyance, transfer or lease does not cause
the Securities (including any Successor Securities) to be downgraded
by any nationally recognized statistical rating organization within
the meaning of Rule 436(g)(12) under the Securities Act or any
successor rule or regulation;
(v) such merger, consolidation, amalgamation, other business
combination, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders
of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of such
Holders' interests in the Securities as a result of such merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation, other
business combination, replacement, conveyance, transfer or lease, the
Sponsor has received an opinion of counsel to the effect that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the Trust
Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders'
interest in the new entity);
(B) following such merger, consolidation, amalgamation,
other business combination, replacement, conveyance, transfer or
lease, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation,
other business combination, replacement, conveyance, transfer or
lease the Trust (or the Successor Entity) will continue not to be
treated as an association taxable as a corporation for United
States federal income tax purposes; and
(viii) the Sponsor or any permitted successor guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Trust
Securities, merge, consolidate or amalgamate with or into, enter into any
other business combination with or be replaced by, or convey, transfer or
lease its properties and assets substantially as an entirety to, any other
entity or permit any other entity to merge, consolidate or amalgamate,
merge with or into, enter into any other business combination with or
replace it if such merger, consolidation, amalgamation, other business
combination, replacement, conveyance, transfer or lease would cause the
Trust or Successor Entity to be treated as an association taxable as a
corporation for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issuance and sale of the Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission
a registration statement on Form S-3 in relation to the Securities,
including any amendments thereto;
(b) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Securities
and to do any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and
filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such states;
(c) to prepare for filing by the Trust an application to
the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing upon notice of issuance of any
Securities;
(d) to prepare for filing by the Trust with the Commission
a registration statement on Form 8-A relating to the registration of
the Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement
providing for the sale of the Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
------------------
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Trust Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities; provided,
however, that the number of Trustees shall in no event be less than
two (2); and provided, further, that, (1) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the
Sponsor (a "Regular Trustee"); (2) one Trustee shall be the
Institutional Trustee for so long as this Declaration is required to
qualify as an indenture under the Trust Indenture Act, and such
Trustee may also serve as Delaware Trustee if it meets the applicable
requirements; and (3) there shall be a Delaware Trustee to the extent
required under Section 5.2.
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the state of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law;
provided, however, that if the Institutional Trustee has its principal
place of business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Institutional Trustee may also be
the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
----------------------------------
(a) There shall at all times be one Trustee which shall act as
"Institutional Trustee" which shall be:
(i) not an Affiliate of the Sponsor; and
(ii) a corporation organized and doing business under the laws
of the United States, any state or territory thereof or the District
of Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least Fifty
Million Dollars ($50,000,000) and subject to supervision or
examination by federal, state, territorial or District of Columbia
authority, or
(iii)if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least Fifty Million Dollars
($50,000,000) or the United States Dollar equivalent of the applicable
foreign currency and subject to supervision or examination by
authority of such foreign government or a political subdivision
thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,
and, in either case, qualified and eligible under this Article and the
Trust Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of such supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of
the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
(d) The Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company.
SECTION 5.4 Certain Qualifications of Regular Trustees and Delaware
-------------------------------------------------------
Trustee Generally.
-----------------
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that shall
act through one or more Authorized Officers.
SECTION 5.5 Regular Trustees.
----------------
The initial Regular Trustees shall be:
Lawrence J. Pierce
Dorothy K. Mercer.
(a) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any
matter over which the Regular Trustees have power to act, any power of the
Regular Trustees may be exercised by, or with the consent of, any one such
Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable law,
any Regular Trustee is authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power and authority to cause
the Trust to execute pursuant to Section 3.6, provided, however, that the
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by all of the Regular Trustees.
(c) A Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Regular
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 5.6 Delaware Trustee.
-----------------
The initial Delaware Trustee shall be:
Wilmington Trust Company.
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
-------------------------------------------------
(a) Subject to Section 5.7(b), Trustees may be appointed or
removed without cause at any time except during an Event of Default:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities.
(b) (i) The Institutional Trustee shall not be removed in
accordance with Section 5.7(a) until a Successor Institutional Trustee has
been appointed and has accepted such appointment by written instrument
executed by such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Delaware Trustee shall not be removed in
accordance with this Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee
and delivered to the Sponsor and the Trust, which resignation shall take
effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) no such resignation of the Institutional Trustee shall be
effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered to
the Trust, the Sponsor and the resigning Institutional Trustee;
or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Trust Securities; and
(ii) no such resignation of the Delaware Trustee shall be
effective until a Successor Delaware Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use all
reasonable efforts to promptly appoint a Successor Delaware Trustee or
Successor Institutional Trustee as the case may be if the Institutional
Trustee or the Delaware Trustee delivers an instrument of resignation in
accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in
this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Institutional Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Institutional Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper and prescribe, appoint a
Successor Institutional Trustee or Successor Delaware Trustee, as the case
may be.
(f) No Institutional Trustee or Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Institutional
Trustee or Successor Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number
of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties
of a Trustee shall not operate to annul the Trust. Whenever a vacancy in
the number of Regular Trustees shall occur, until such vacancy is filled by
the appointment of Regular Trustee in accordance with Section 5.7, the
Regular Trustees in office, regardless of their number, shall have all the
powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
SECTION 5.10 Meetings.
--------
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any
Regular Trustee. Regular meetings of the Regular Trustees may be held at a
time and place fixed by resolution of the Regular Trustees. Notice of any
in-person meetings of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Regular Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours
before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Regular Trustee at a meeting shall constitute
a waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees.
In the event there is only one Regular Trustee, any and all action of such
Regular Trustee shall be evidenced by a written consent of such Regular
Trustee.
SECTION 5.11 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of
21 his or her power for the purpose of executing any documents contemplated
in Section 3.6, including any registration statement or amendment thereto
filed with the Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as
set forth herein.
Section 5.12 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any corporation into which the Institutional Trustee or the
Delaware Trustee, as the case may be, may be merged or converted or with
which either may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of the Institutional Trustee or the Delaware Trustee, as the case
may be, shall be the successor of the Institutional Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the Trust Securities.
Distributions shall be made on the Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If
and to the extent that the Debenture Issuer makes a payment of interest
(including Compounded Interest (as defined in the Indenture) and Additional
Interest (as defined in the Indenture)), premium and/or principal on the
Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Trust Securities.
---------------------------------------------
(a) The Regular Trustees shall on behalf of the Trust issue one
class of securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are
set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust
by a Regular Trustee. Such signature shall be the manual or facsimile
signature of any present or any future Regular Trustee. In case any
Regular Trustee of the Trust who shall have signed any of the Trust
Securities shall cease to be such Regular Trustee before the Certificates
so signed shall be delivered by the Trust, such Certificates nevertheless
may be delivered as though the person who signed such Certificates had not
ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of
such Trust Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation of any stock exchange on which Trust
Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of
the Trust Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Trust Securities as provided in this
Declaration and the receipt of the consideration to be received therefor,
the Trust Securities so issued shall be deemed to be validly issued, fully
paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
SECTION 7.2 Paying Agent.
------------
The Trust shall appoint a paying agent (the "Paying Agent") and
may appoint one or more additional paying agents in such other locations as
it shall determine. The term "Paying Agent" includes any additional paying
agent. The Trust may change any Paying Agent without prior notice to any
Holder. The Trust shall notify the Institutional Trustee of the name and
address of any Agent not a party to this Declaration. If the Trust fails
to appoint or maintain another entity as Paying Agent, the Institutional
Trustee shall act as such. The Trust or any of its Affiliates may act as
Paying Agent. Wilmington Trust Company shall initially act as Paying Agent
for the Securities and the Common Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
--------------------
(a) The Trust shall terminate:
(i) upon the occurrence of an Event of Default described in
clause (d) or (e) of Section 701 of the Indenture;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the filing of a certificate of
cancellation with respect to the Trust after having obtained the
consent of a majority in liquidation amount of the Trust Securities
voting together as a single class to file such certificate of
cancellation; or the revocation of the Sponsor's charter and the
expiration of 90 days after the date of revocation without a
reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Trust Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Trust
Securities;
(v) upon the occurrence and continuation of a Tax Event in
connection with which the Trust shall have been dissolved in
accordance with the terms of the Trust Securities and all of the
Debentures endorsed thereon shall have been distributed to the Holders
of Securities in exchange for all of the Trust Securities; or
(vi) before the issuance of any Trust Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust except as contemplated in Section 1005 of the
Indenture.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Trust Securities.
----------------------------
(a) Trust Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Trust Securities. Any transfer or
purported transfer of any Trust Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Securities shall be freely
transferable.
(c) The Securities are to be initially registered in the name
of Cede & Co., as nominee for The Depository Trust Company (the
"Depositary") and the Security Certificates so initially registered shall
bear such legends as required by the Depositary. Such Securities shall not
be transferable or exchangeable, nor shall any purported transfer be
registered, except as follows:
(i) such Securities may be transferred in whole, and
appropriate registration of transfer effected, if such transfer is by
such nominee to the Depositary, or by the Depositary to another
nominee thereof, or by any nominee of the Depositary to any other
nominee thereof, or by the Depositary or any nominee thereof to any
successor securities depositary or any nominee thereof; and
(ii) such Securities shall be exchanged for Securities
Certificates registered in the respective names of the beneficial
holders thereof, and thereafter shall be transferable without
restriction, if:
(A) the Depositary, or any successor securities depositary,
shall have notified the Company and the Institutional Trustee that it
is unwilling or unable to continue to act as securities depositary
with respect to such Securities and the Institutional Trustee shall
not have been notified by the Company within ninety (90) days of the
identity of a successor securities depositary with respect to such
Securities;
(B) the Company shall have delivered to the Institutional
Trustee an Officer's Certificate to the effect that such Securities
shall be so exchangeable on and after a date specified therein; or
(C) (1) an Event of Default shall have occurred and be
continuing, (2) the Institutional Trustee shall have given notice of
such Event of Default pursuant to Section 2.7 of this Declaration and
(3) there shall have been delivered to the Company and the
Institutional Trustee an opinion of counsel to the effect that the
interests of the beneficial owners of such Securities in respect
thereof will be materially impaired unless such owners become Holders
of Securities Certificates.
(d) The Sponsor shall maintain 100% direct ownership of the
Common Securities by the Sponsor or any Affiliate thereof, except as
otherwise provided in Section 1005 of the Indenture.
SECTION 9.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may reasonably require) in respect of any documentary stamp tax or
other similar governmental charges that may be imposed in relation to it.
Upon surrender for registration of transfer of any Certificate, the Regular
Trustees shall cause one or more new Certificates to be issued in the name
of the designated transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a written instrument
of transfer in form satisfactory to the Regular Trustees duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to
the rights and be subject to the obligations of a Holder hereunder upon the
receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 9.3 Deemed Trust Security Holders.
-----------------------------
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole
holder of such Certificate and of the Trust Securities represented by such
Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the Trust
Securities represented by such Certificate on the part of any Person,
whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Security Certificates.
---------------------
(a) Security Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such Securities; and
(b) Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Securities
may be listed, or to conform to usage.
SECTION 9.5 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate;
and
(b) there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep each of them
harmless,
then, in the absence of notice that such Certificate shall have been
acquired by a person purporting to be a bona fide purchaser, any Regular
Trustee on behalf of the Trust shall execute and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like denomination. In connection with the issuance of
any new Certificate under this Section 9.5, the Regular Trustees may
require the payment of a sum sufficient to cover any documentary stamp tax
or other similar governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Trust Securities which shall be made solely from assets of the Trust;
or
(ii) required to pay to the Trust or to any Holder of Trust
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of the Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware.
SECTION 10.2 Exculpation.
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(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Trust
Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than the duties imposed on the
Institutional Trustee under the Trust Indenture Act), are agreed by the
parties hereto to replace such other duties and liabilities of such
Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Trust Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at law or in
equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have
no duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not
be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4 Indemnification.
---------------
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no reason-
able cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment
in its favor by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged
to be liable to the Trust unless and only to the extent that the Court
of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such expenses which such Court of Chancery or such other court shall
deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor only as authorized in the specific case upon a determination
that indemnification of the Company Indemnified Person is proper in
the circumstances because he has met the applicable standard of con-
duct set forth in paragraphs (i) and (ii). Such determination shall
be made (1) by the Regular Trustees by a majority vote of a quorum
consisting of such Regular Trustees who were not parties to such
action, suit or proceeding, (2) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees
so directs, by independent legal counsel in a written opinion, or (3)
by the Holders of the Common Securities.
(v) Expenses (including attorneys' fees and expenses) incurred
by a Company Indemnified Person in defending civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by
the Sponsor in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf such
Company Indemnified Person to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the Sponsor
as authorized in this Section 10.4(a). Notwithstanding the foregoing,
no advance shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by a majority
vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of
the Trust, that, based upon the facts known to the Regular Trustees,
counsel or the Common Security Holder at the time such determination
is made, such Company Indemnified Person acted in bad faith or in a
manner that such person did not believe to be in or not opposed to the
best interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event
shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Holders of the Common Securities
reasonably determine that such person deliberately breached his duty
to the Trust or the Holders of the Securities.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor or vote of Holders of Securities or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Sponsor and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then
existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a merger, consolidation, amalgamation or
other business combination so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or
is or was serving at the request of such constituent entity as a
director, trustee, officer, employee or agent of another entity, shall
stand in the same position under the provisions of this Section
10.4(a) with respect to the resulting or surviving entity as he would
have with respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Sponsor agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the
Institutional Trustee and the Delaware Trustee, and (iv) any officers,
directors, shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Institutional Trustee and the
Delaware Trustee (each of the Persons in (i) through (iv) being referred to
as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense including taxes (other than taxes based on the income of
such Fiduciary Indemnified Person) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration or the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 10.4(b) shall survive
the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust
and the Holders of Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive
with the business of the Trust, shall not be deemed wrongful or improper.
No Covered Person, the Sponsor, the Delaware Trustee, or the Institutional
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered
Person, the Sponsor, the Delaware Trustee and the Institutional Trustee
shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee
and the Institutional Trustee may engage or be interested in any financial
or other transaction with the Sponsor or any Affiliate of the Sponsor, or
may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records
and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted
accounting principles, consistently applied. The Trust shall use the
accrual method of accounting for United States federal income tax purposes.
The books of account and the records of the Trust shall be examined by and
reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Trust Securities, within 90 days after
the end of each Fiscal Year of the Trust, annual financial statements of
the Trust, including a balance sheet of the Trust as of the end of such
Fiscal Year, and the related statements of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Trust Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Trust Securities held by
each Holder as is required by the Code and the Treasury Regulations.
Notwithstanding any right under the Code to deliver any such statement at a
later date, the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each calendar year.
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax
returns required to be filed by the Regular Trustees on behalf of the Trust
with any state or local taxing authority.
SECTION 11.3 Banking.
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The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments
of funds in respect of the Debentures held by the Institutional Trustee
shall be made directly to the Institutional Trustee Account and no other
funds of the Trust shall be deposited in the Institutional Trustee Account.
The sole signatories for such accounts shall be designated by the Regular
Trustees; provided, however, that the Institutional Trustee shall designate
the signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
-----------
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Trust to assist it in determining
the extent of, and in fulfilling, its withholding obligations. The Regular
Trustees shall file required forms with applicable jurisdictions and,
unless an exemption from withholding is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and
pay over any amounts to any authority with respect to distributions or
allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event
of any claimed over withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be withheld
was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
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(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Trust Securities, this Declaration may only be
amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the
Institutional Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee;
(b) no amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officer's
Certificate from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have first
received:
(A) an Officer's Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Trust
Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms
of the Trust Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to be classified for purposes of United
States federal income taxation as an association taxable as a
corporation;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture
Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(c) at such time after the Trust has issued any Trust
Securities that remain outstanding, any amendment that would adversely
affect the rights, privileges or preferences of any Holder of Trust
Securities may be effected only with such additional requirements as may be
set forth in the terms of such Trust Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Trust Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Trust Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority which amendment does
not have a material adverse effect on the right, preferences or
privileges of the Holders; and
(v) modify, eliminate and/or add any provision of, from or to
this Declaration in any other respect so long as such modification,
elimination or addition shall not adversely affect the interests of
the Holders of Securities in any material respect.
SECTION 12.2 Meetings of the Holders of Trust Securities;
--------------------------------------------
Action by Written Consent.
-------------------------
(a) Meetings of the Holders of any class of Trust Securities
may be called at any time by the Regular Trustees (or as provided in the
terms of the Trust Securities) to consider and act on any matter on which
Holders of such class of Trust Securities are entitled to act under the
terms of this Declaration, the terms of the Trust Securities or the rules
of any stock exchange on which the Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of such
class if directed to do so by the Holders of at least 33% in liquidation
amount of such class of Trust Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a writing stating
that the signing Holders of Trust Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Trust Securities calling a meeting shall specify in
writing the Trust Security Certificates held by the Holders of Trust
Securities exercising the right to call a meeting and only those Trust
Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph
has been met.
(b) Except to the extent otherwise provided in the terms of the
Trust Securities, the following provisions shall apply to meetings of
Holders of Trust Securities:
(i) notice of any such meeting shall be given to all the
Holders of Trust Securities having a right to vote thereat at least 21
days and not more than 18 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Trust
Securities is permitted or required under this Declaration or the
rules of any stock exchange on which the Securities are listed or
admitted for trading, such vote, consent or approval may be given at a
meeting of the Holders of Trust Securities. Any action that may be
taken at a meeting of the Holders of Trust Securities may be taken
without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Trust Securities owning not less
than the minimum amount in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Trust Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall
be given to the Holders of Trust Securities entitled to vote who have
not consented in writing. The Regular Trustees may specify that any
written ballot submitted to the Trust Security Holder for the purpose
of taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;
(ii) each Holder of a Trust Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Trust
Securities is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. No proxy shall be
valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Trust Securities executing it. Except
as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Trust Securities were stockholders
of a Delaware corporation;
(iii) each meeting of the Holders of the Trust Securities shall
be conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms
of the Trust Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Securities are then listed or
trading, otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings
of Holders of Trust Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any
Holders of Trust Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
-------------------------------------------------------
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor
Institutional Trustee's acceptance of its appointment as Institutional
Trustee, that:
(a) the Institutional Trustee is a Delaware banking corporation
with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the
Institutional Trustee of the Declaration has been duly authorized by
all necessary corporate action on the part of the Institutional
Trustee. The Declaration has been duly executed and delivered by the
Institutional Trustee, and it constitutes a legal, valid and binding
obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of this Declaration
by the Institutional Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration
with or notice to, any Delaware or other state or any federal banking
authority is required for the execution, delivery or performance by
the Institutional Trustee of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Delaware Trustee's acceptance
of its appointment as Delaware Trustee, that:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) No consent, approval or authorization of, or registration
with or notice to, any Delaware or other state or any federal banking
authority is required for the execution, delivery or performance by
the Delaware Trustee of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
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All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Trust may give notice of to the Holders of the Trust Securities):
Washington Water Power Capital I
c/o The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Telecopy: (509) 489-4879
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Trust Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: (302) 651-1576
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as
the Institutional Trustee may give notice of to the Holders of the
Trust Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: (302) 651-1576
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Trust):
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Telecopy: (509) 482-4879
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when received
in person 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 14.2 Governing Law.
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This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware, and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor
trust. The provisions of this Declaration shall be interpreted to further
this intention of the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns.
----------------------
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to
be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
---------------------------------------------
LAWRENCE J. PIERCE,
as Regular Trustee
---------------------------------------------
DOROTHY K. MERCER,
as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
------------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By:
------------------------------------------
Name:
Title:
THE WASHINGTON WATER POWER COMPANY,
as Sponsor
By:
------------------------------------------
Name:
Title:
ANNEX I
ANNEX I
TERMS OF
% SECURITIES, SERIES A
---- ---------
% TRUST ORIGINATED COMMON SECURITIES, SERIES A
----
Pursuant to Section 7.1 of the Amended and Restated Declaration
of Trust, dated as of , 199 (as amended from time to time, the
-------- -
"Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Securities and the Common
Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in
such Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
----------------------
(a) Securities. Securities of the Trust with an
---------- ----------
aggregate liquidation amount with respect to the assets of the Trust of
($ ) and a liquidation amount with respect
--------------------- -----------
to the assets of the Trust of $ per security, are hereby designated for
---
the purposes of identification only as " % Securities, Series
---- ---------
A" (the "Securities"). The Security Certificates evidencing the Securities
shall be substantially in the form of Exhibit A-1 to the Declaration, with
such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Securities are listed.
(b) Common Securities. Common Securities of the Trust
----------------- -------
with an aggregate liquidation amount with respect to the assets of the
Trust of dollars ($ ) and a liquidation
---------------------- ---------
amount with respect to the assets of the Trust of $ per common security,
---
are hereby designated for the purposes of identification only as " %
----
Trust Originated Common Securities, Series A" (the "Common Securities").
The Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a
rate of % per annum (the "Coupon Rate") of the stated liquidation
----
amount of $ per Security, such rate being the rate of interest payable
---
on the Debentures to be held by the Institutional Trustee. Distributions
in arrears for more than one Distribution period will bear interest thereon
compounded at the Coupon Rate (to the extent permitted by
---------
applicable law). The term "Distributions" as used herein includes such
cash distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full
Distribution period on the basis of a 360-day year of twelve
---------
30-day months, and for any period shorter than a full
---------
Distribution period for which Distributions are computed, Distributions
will be computed on the basis of the actual number of days elapsed per
-day Distribution period.
---
(b) Distributions on the Securities will be cumulative, will
accrue from , 199 , and will be payable in arrears, on
------ - ---------
of each year, commencing on , 199 , except as
--------- -------- -- -
otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not exceeding
--
consecutive Distribution periods (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debentures,
provided, however, that no Extension Period shall last beyond the date of
maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral,
---------
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded during
---------
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period;
provided, however, that such Extension Period, together with all such
previous and further extensions thereof, may not exceed consecutive
--
Distribution periods or extend beyond the maturity of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. The relevant record dates for the Securities shall
conform to the rules of any securities exchange on which the securities are
listed and, if none, shall be selected by the Regular Trustees, which dates
shall be at least one Business Day but less than 50 Business Days before
the relevant payment dates, which payment dates correspond to the interest
payment dates on the Debentures. The relevant record dates for the Common
Securities shall be the same record date as for the Securities.
Distributions payable on any Trust Securities that are not punctually paid
on any Distribution payment date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Trust Securities are registered on
the relevant record date, and such defaulted Distribution will instead be
payable to the Person in whose name such Trust Securities are registered on
the special record date or other specified date determined in accordance
with the Indenture. If any date on which Distributions are payable on the
Trust Securities is not a Business Day, then payment of the Distribution
payable on such date will be made on the next succeeding day that is a
Business Day except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date.
(d) In the event that there is any money or other property held
by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders of the
Trust Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Trust Securities
on the date of the dissolution, winding-up or termination, as the case may
be, will be entitled to receive out of the assets of the Trust available
for distribution to Holders of Trust Securities after satisfaction of
liabilities of creditors an amount equal to the aggregate of the stated
liquidation amount of $ per Trust Security plus accrued and unpaid
---
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, in connection with such dissolution,
winding-up or termination, Debentures in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of such Trust
Securities, with an interest rate equal to the Coupon Rate of, accrued and
unpaid interest in an amount equal to the accrued and unpaid Distributions
on, such Trust Securities, shall be distributed on a Pro Rata basis to the
Holders of the Trust Securities in exchange for such Trust Securities.
If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts
payable directly by the Trust on the Trust Securities shall be paid on a
Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the
Debenture Issuer or pursuant to a Tax Event as described below), the
proceeds from such repayment shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption
price of $ per Trust Security plus an amount equal to accrued and unpaid
---
Distributions thereon at the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more than
60 days' notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Securities will be redeemed Pro
Rata and the Securities to be redeemed will be as described in Section
4(f)(ii) below.
(c) If, at any time, a Tax Event (as defined below) shall occur
and be continuing, at the option of the Sponsor, within 90 days following
the occurrence of such Tax Event, either (i) the Regular Trustees may
dissolve the Trust, and, after satisfaction of creditors, cause Debentures
held by the Institutional Trustee, having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on, and having the same record date for
payment as the Trust Securities, to be distributed to the Holders of the
Trust Securities in liquidation of such Holders' interests in the Trust on
a Pro Rata basis, or (ii) the Debenture Issuer may, upon not less than 30
nor more than 60 days' notice, redeem the Debentures, in whole but not in
part, for cash, and, following such redemption, Trust Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the Redemption
Price on a Pro Rata basis; and provided, however, further, that, if at the
time there is available to the Trust the opportunity to eliminate, within
the 90 day period, the Tax Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar
reasonable measure that has no adverse effect on the Trust, the Debenture
Issuer, the Sponsor or the Holders of the Trust Securities ("Ministerial
Action"), the Trust or the Debenture Issuer will pursue such Ministerial
Action in lieu of such dissolution and distribution or redemption.
"Tax Event" means the receipt by the Sponsor of an opinion of
counsel to the effect that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting
taxation, (b) any judicial decision, official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice
or announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or
change in the official position or the interpretation of such
Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative
body, court, governmental authority or regulatory body, irrespective of the
manner in which such amendment, clarification or change is made known,
which amendment, clarification, or change is effective or such
pronouncement or decision is announced, in each case, on or after, the date
of the original issuance of the Debentures (including the enactment of any
legislation and the publication of any judicial decision or regulatory
determination on or after such date), there is more than an insubstantial
risk that (i) the Trust is or will be within 90 days of the date of such
amendment, clarification or change, subject to United States federal income
tax with respect to interest accrued or received on the Debentures, (ii)
the Trust is, or will be within 90 days of the date of such amendment,
clarification or change, subject to more than a de minimis amount of taxes,
duties or other governmental charges, or (iii) interest payable by the
Debenture Issuer to the Trust on the Debentures is not, or within 90 days
of the date of such amendment, clarification or change will not be,
deductible, in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Trust
Securities will be deemed to be no longer outstanding and (ii) any
certificates representing Trust Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on, and having the same record date for
payment as such Trust Securities until such certificates are presented to
the Debenture Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Trust Securities unless all accrued and unpaid Distributions have been paid
on all Trust Securities for all Distribution periods terminating
---------
on or before the date of redemption.
(e) If the Debentures are distributed to holders of the Trust
Securities, the Debenture Issuer will use all reasonable efforts to have
the Debentures listed on the New York Stock Exchange or on such other
exchange as the Securities were listed immediately prior to the
distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Trust Securities (a "Re-
demption/Distribution Notice"), will be given by the Trust by mail to
each Holder of Trust Securities to be redeemed or exchanged not fewer
than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date
fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Trust Securities. Each Redemption/Distribution Notice
shall be addressed to the Holders of Trust Securities at the address
of each such Holder appearing in the books and records of the Trust.
No defect in the Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the validity of
the redemption or exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding Trust
Securities are to be redeemed, the Trust Securities to be redeemed
shall be redeemed Pro Rata from each Holder of Securities. The
particular Securities to be redeemed shall be selected on a Pro Rata
basis not more than 60 days prior to the redemption date by the
Institutional Trustee from the outstanding Securities not previously
called for redemption, by such method as the Institutional Trustee
shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $ or an integral
---
multiple of $___ in excess thereof) of the liquidation preference
amount of Securities of a denomination larger than $ . The
---
Institutional Trustee shall notify the Transfer Agent and Registrar in
writing of the Securities selected for redemption, and in the case of
any Securities selected for partial redemption, the liquidation
preference amount thereof to be redeemed. For all purposes of the
Declaration, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part, or to the
portion of the aggregate liquidation preference amount of Securities
which has been or is to be redeemed.
(iii) If Trust Securities are to be redeemed and the Trust gives
a Redemption/Distribution Notice, then provided that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will pay the relevant Redemption
Price to the holders of such Trust Securities by check mailed to the
address of the relevant Holders appearing on the books and records of
the Trust on the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, if applicable,
then immediately prior to the close of business on the date of such
deposit, or on the redemption date, as applicable, distributions will
cease to accrue on the Trust Securities so called for redemption and
all rights of Holders of such Trust Securities so called for
redemption will cease, except the right of the Holders of such Trust
Securities to receive the Redemption Price, but without interest on
such Redemption Price. Neither the Regular Trustees nor the Trust
shall be required to register or cause to be registered the transfer
of any Trust Securities that have been so called for redemption. If
any date fixed for redemption of Trust Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any
Trust Securities is improperly withheld or refused and not paid either
by the Institutional Trustee or by the Sponsor as guarantor pursuant
to the relevant Guarantee, Distributions on such Trust Securities will
continue to accrue from the original redemption date to the actual
date of payment, in which case the actual payment date will be consid-
ered the date fixed for redemption for purposes of calculating the
Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the
Securities, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided
the acquiror is not the Holder of the Common Securities or the obligor
under the Indenture, the Sponsor or any of its subsidiaries may at any
time and from time to time purchase outstanding Securities by tender,
in the open market or by private agreement.
5. Voting Rights - Securities.
--------------------------
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a majority in aggregate liquidation amount of the
Securities, voting separately as a class, may direct the time, method, and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct
the Institutional Trustee, as holder of the Debentures, to (i) exercise the
remedies available under the Indenture of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii)
waive any past default and its consequences that is waivable under
Section 813 of the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due
and payable. The Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or
the Debenture Trustee as set forth above, the Institutional Trustee shall
not take any action in accordance with the directions of the Holders of the
Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be treated as an
association taxable as a corporation on account of such action. If an
Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date),
then a holder of Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on
the Debentures having a principal amount equal to the aggregate liquidation
amount of the Securities of such holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such
Direct Action, the rights of the holders of the Common Securities Holder
will be subrogated to the rights of such holder of Securities to the extent
of any payment made by the Issuer to such holder of Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders
of Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Securities may be given
at a separate meeting of Holders of Securities convened for such purpose,
at a meeting of all of the Holders of Trust Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at which Holders of Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Securities will be
required for the Trust to redeem and cancel Securities or to distribute the
Debentures in accordance with the Declaration and the terms of the Trust
Securities.
Notwithstanding that Holders of Securities are entitled to vote
or consent under any of the circumstances described above, any of the
Securities that are owned by the Sponsor or any Affiliate of the Sponsor
shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
the Event of Default with respect to the Securities has been cured, waived,
or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under the Declaration, including
(i) directing the time, method, place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii)
waive any past default and its consequences that is waivable under Section
713 of the Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and
payable. Pursuant to this Section 6(c), the Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the
Holders of the Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional
Trustee shall not take any action in accordance with the directions of the
Holders of the Common Securities under this paragraph unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will
not be treated as an association taxable as a corporation on account of
such action. If the Institutional Trustee fails to enforce its rights
under the Declaration, any Holder of Common Securities may institute a
legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice
of any meeting at which Holders of Common Securities are entitled to vote,
or of any matter upon which action by written consent of such Holders is to
be taken, to be mailed to each Holder of record of Common Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will
be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms
of the Trust Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the
Securities in any material respect, whether by way of amendment to the
Declaration or otherwise, or (ii) the dissolution, winding-up or
termination of the Trust, other than as described in Section 8.1 of the
Declaration, then the Holders of outstanding Trust Securities voting
together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of
at least a Majority in liquidation amount of the Trust Securities, affected
thereby, provided, however, that if any amendment or proposal referred to
in clause (i) above would so adversely affect only the Securities or only
the Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of a Majority in liquidation amount
of such class of Trust Securities.
(b) In the event the consent of the Institutional Trustee as
the holder of the Debentures is required under the Indenture with respect
to any amendment, modification or termination on the Indenture or the
Debentures, the Institutional Trustee shall request the written approval of
the Holders of the Trust Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in liquidation amount
of the Trust Securities voting together as a single class; provided,
however, that where a consent under the Indenture would require the consent
of each holder of the Debentures, the Institutional Trustee may only give
such consent with the approval of each Holder of outstanding Trust
Securities; and provided, further, that, the Institutional Trustee shall
not take any action in accordance with the directions of the Holders of the
Trust Securities under this Section 7(b) unless the Institutional Trustee
has obtained an opinion of tax counsel to the effect that for the purposes
of United States federal income tax the Trust will not be treated as an
association taxable as a corporation on account of such action.
8. Pro Rata.
--------
A reference in these terms of the Trust Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata
to each Holder of Trust Securities according to the aggregate liquidation
amount of the Trust Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Trust Securities outstanding
unless, in relation to a payment, an Event of Default under the Declaration
has occurred and is continuing, in which case any funds available to make
such payment shall be paid first to each Holder of the Securities pro rata
according to the aggregate liquidation amount of Securities held by the
relevant Holder relative to the aggregate liquidation amount of all
Securities outstanding, and only after satisfaction of all amounts owed to
the Holders of the Securities, to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by
the relevant Holder relative to the aggregate liquidation amount of all
Common Securities outstanding.
9. Ranking.
-------
The Securities rank pari passu and payment thereon shall be made
Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing, the rights of Holders of the Common Securities
and the rights of the Sponsor or any Affiliate of the Sponsor, to the
extent of their beneficial ownership of Securities, to payment in respect
of Distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights to payment of other Holders of the
Securities.
10. Listing.
-------
The Regular Trustees shall use all reasonable efforts to cause
the Securities to be listed for quotation on the New York Stock Exchange.
11. Acceptance of Guarantee and Indenture.
-------------------------------------
Each Holder of Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Securities Guarantee,
the Common Securities Guarantee and the Indenture, respectively, including
the subordination provisions therein.
12. No Preemptive Rights.
--------------------
The Holders of the Trust Securities shall have no preemptive
rights to subscribe for any additional securities.
13. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written
request to the Sponsor at its principal place of business.
EXHIBIT A-1
EXHIBIT A-1
FORM OF SECURITY CERTIFICATE
This Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Security is exchangeable for Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Security
(other than a transfer of this Security as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary) may be registered except
in limited circumstances.
Unless this Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to
the Trust or its agent for registration of transfer, exchange or payment,
and any Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Securities
CUSIP NO.
-----------
Certificate Evidencing Securities
of
WASHINGTON WATER POWER CAPITAL I
% Securities, Series A
---- ---------
(liquidation amount $ per Security)
---
WASHINGTON WATER POWER CAPITAL I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that (the "Holder") is the registered owner of
-----------
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the % Securities, Series A
---- ---------
(liquidation amount $ per Security) (the "Securities"). The Securities
---
are transferable on the books and records of the Trust, in person or by a
duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of , 199 , as the same may be amended from time to time (the
------ -
"Declaration"), including the designation of the terms of the Securities as
set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the
Declaration, the Securities Guarantee and the Indenture to a Holder without
charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 199 .
---- ------- -
WASHINGTON WATER POWER CAPITAL I
By:
------------------------------------------
Name:
Title: Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Security will be fixed at a rate
per annum of % (the "Coupon Rate") of the stated liquidation amount of
----
$ per Security, such rate being the rate of interest payable on the
---
Debentures to be held by the Institutional Trustee. Distributions in
arrears for more than one Distribution period will bear interest thereon
compounded at the Coupon Rate (to the extent permitted by
---------
applicable law). The term "Distributions" as used herein includes such
cash distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full
Distribution period on the basis of a 360-day year of twelve
---------
30-day months, and for any period shorter than a full
---------
Distribution period for which Distributions are computed, Distributions
will be computed on the basis of the actual number of days elapsed per
-day Distribution period.
---
Except as otherwise described below, distributions on the
Securities will be cumulative, will accrue from the date of original
issuance and will be payable in arrears, on of each
--------- -----------
year, commencing on , 199 , to , 20 , to holders of
-------- -- - -------- -- --
record on the relevant record dates (as specified in the Declaration) next
preceding such payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period
not exceeding consecutive Distribution periods (each an "Extension
--
Period") and as a consequence of such deferral, Distributions will also be
deferred, provided, however, that no Extension Period shall last beyond the
date of the maturity of the Debentures. Despite such deferral, _________
---------
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded during
---------
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period;
provided, however, that such Extension Period together with all such
previous and further extensions thereof may not exceed consecutive
--
Distribution periods or extend beyond the maturity of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
The Securities shall be redeemable as provided in the
Declaration.
The Declaration and the Securities shall be governed by and
construed in accordance with the laws of the State of Delaware, and all
rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
-------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security
Certificate to:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-------------------------------------------------------------------------
-------------------------------------------------------------------------
------------------------------------------------------------------- agent
to transfer this Security Certificate on the books of the Trust. The agent
may substitute another to act for him or her.
Date:
-------------------
Signature:
---------------
(Sign exactly as your name appears on the other side of this Security
Certificate)
Signature Guarantee*
------------------------------------
-----------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
EXHIBIT A-2
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
WASHINGTON WATER POWER CAPITAL I
% Trust Originated Common Securities, Series A
----
(liquidation amount $ per Common Security)
---
WASHINGTON WATER POWER CAPITAL I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that The Washington Water Power Company (the "Holder") is the
registered owner of common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the % Trust
----
Originated Common Securities, Series A (liquidation amount $ per Common
---
Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of , 199 , as the same may be amended from
-------- -
time to time (the "Declaration"), including the designation of the terms of
the Common Securities as set forth in Annex I to the Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the
Common Securities Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Common Securities Guarantee and
the Indenture to a Holder without charge upon written request to the
Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 199 .
--- ------------- -
WASHINGTON WATER POWER CAPITAL I
By:
------------------------------------------
Name:
Title: Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a
rate per annum of % (the "Coupon Rate") of the stated liquidation
----
amount of $ per Common Security, such rate being the rate of interest
---
payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears for more than one Distribution period will bear
interest thereon compounded at the Coupon Rate (to the extent
---------
permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds available
therefor. The amount of Distributions payable for any period will be
computed for any full Distribution period on the basis of a
---------
360-day year of twelve 30-day months, and for any period shorter than a
full Distribution period for which Distributions are computed,
---------
Distributions will be computed on the basis of the actual number of days
elapsed per -day Distribution period.
---
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original
issuance and will be payable in arrears, on of each
--------- -----------
year, commencing on , 199 , to , 20 , to Holders of
-------- -- - -------- -- --
record on the relevant record dates (as specified in the Declaration) next
preceding such payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period
not exceeding consecutive Distribution periods (each an "Extension
--
Period") and as a consequence of such deferral, Distributions will also be
deferred; provided, however, that no Extension Period shall last beyond the
date of the maturity of the Debentures. Despite such deferral,
---------
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded during
---------
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period;
provided, however, that such Extension Period together with all such
previous and further extensions thereof may not exceed consecutive
--
Distribution periods or extend beyond the maturity date of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Declaration and the Common Securities shall be governed by
and construed in accordance with the laws of the State of Delaware, and all
rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
------------------------------------------------
-------------------------------------------------------------------------
agent to transfer
-------------------------------------------------------
this Common Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
---------------------
Signature:
---------------
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
Signature Guarantee*:
------------------------------------------------
----------------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as amended.
Exhibit 4(a)-8
========================================================================
AMENDED AND RESTATED DECLARATION
OF TRUST
WASHINGTON WATER POWER CAPITAL II
Dated as of , 199
-------- -
========================================================================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . -2-
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . -8-
SECTION 2.2 Lists of Holders of Trust Securities . . . . . . . -8-
SECTION 2.3 Reports by the Institutional Trustee . . . . . . . -9-
SECTION 2.4 Periodic Reports to Institutional
Trustee . . . . . . . . . . . . . . . . . . . . . . -9-
SECTION 2.5 Evidence of Compliance with Conditions Precedent . -9-
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . -9-
SECTION 2.7 Notice of Event of Default . . . . . . . . . . . -10-
ARTICLE III
ORGANIZATION
SECTION 3.1 Name . . . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.2 Office . . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.3 Purpose . . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.4 Authority . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.5 Title to Property of the Trust . . . . . . . . . -12-
SECTION 3.6 Powers and Duties of the Regular
Trustees . . . . . . . . . . . . . . . . . . . . -12-
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees . . . . . . . . . . . . . . . . . . . . -15-
SECTION 3.8 Powers and Duties of the Institutional
Trustee . . . . . . . . . . . . . . . . . . . . . -16-
SECTION 3.9 Certain Duties and Responsibilities. . . . . . . -19-
SECTION 3.10 Certain Rights of Institutional Trustee . . . . . -21-
SECTION 3.11 Delaware Trustee . . . . . . . . . . . . . . . . -24-
SECTION 3.12 Execution of Documents . . . . . . . . . . . . . -25-
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust
Securities . . . . . . . . . . . . . . . . . . . -25-
SECTION 3.14 Duration of Trust . . . . . . . . . . . . . . . . -25-
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . -25-
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities . . . . . -27-
SECTION 4.2 Responsibilities of the Sponsor . . . . . . . . . -28-
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees . . . . . . . . . . . . . . . -28-
SECTION 5.2 Delaware Trustee . . . . . . . . . . . . . . . . -29-
SECTION 5.3 Institutional Trustee; Eligibility . . . . . . . -29-
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally . . . . . . . . . . . -30-
SECTION 5.5 Regular Trustees . . . . . . . . . . . . . . . . -31-
SECTION 5.6 Delaware Trustee. . . . . . . . . . . . . . . . . -31-
SECTION 5.7 Appointment, Removal and Resignation of Trustees. -31-
SECTION 5.8 Vacancies among Trustees . . . . . . . . . . . . -33-
SECTION 5.9 Effect of Vacancies . . . . . . . . . . . . . . . -33-
SECTION 5.10 Meetings. . . . . . . . . . . . . . . . . . . . . -33-
SECTION 5.11 Delegation of Power . . . . . . . . . . . . . . . -34-
Section 5.12 Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . -34-
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions . . . . . . . . . . . . . . . . . . -35-
ARTICLE VII
ISSUANCE OF TRUST SECURITIES
SECTION 7.1 General Provisions Regarding Trust Securities . . -35-
SECTION 7.2 Paying Agent . . . . . . . . . . . . . . . . . . -36-
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust . . . . . . . . . . . . . . -37-
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Trust Securities . . . . . . . . . . -38-
SECTION 9.2 Transfer of Certificates . . . . . . . . . . . . -39-
SECTION 9.3 Deemed Trust Security Holders . . . . . . . . . . -39-
SECTION 9.4 Security Certificates . . . . . . . . . . . . . . -40-
SECTION 9.5 Mutilated, Destroyed, Lost or Stolen Certificates -40-
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF Trust SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability . . . . . . . . . . . . . . . . . . . . -41-
SECTION 10.2 Exculpation . . . . . . . . . . . . . . . . . . . -41-
SECTION 10.3 Fiduciary Duty . . . . . . . . . . . . . . . . . -42-
SECTION 10.4 Indemnification . . . . . . . . . . . . . . . . . -43-
SECTION 10.5 Outside Businesses . . . . . . . . . . . . . . . -46-
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year . . . . . . . . . . . . . . . . . . . -47-
SECTION 11.2 Certain Accounting Matters . . . . . . . . . . . -47-
SECTION 11.3 Banking . . . . . . . . . . . . . . . . . . . . . -48-
SECTION 11.4 Withholding . . . . . . . . . . . . . . . . . . . -48-
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments . . . . . . . . . . . . . . . . . . . -49-
SECTION 12.2 Meetings of the Holders of Trust Securities;
Action by Written Consent . . . . . . . . . . . . -51-
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional
Trustee . . . . . . . . . . . . . . . . . . . . . -53-
SECTION 13.2 Representations and Warranties of Delaware
Trustee . . . . . . . . . . . . . . . . . . . . . -54-
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices. . . . . . . . . . . . . . . . . . . . . -54-
SECTION 14.2 Governing Law . . . . . . . . . . . . . . . . . . -56-
SECTION 14.3 Intention of the Parties . . . . . . . . . . . . -56-
SECTION 14.4 Headings . . . . . . . . . . . . . . . . . . . . -56-
SECTION 14.5 Successors and Assigns . . . . . . . . . . . . . -56-
SECTION 14.6 Partial Enforceability . . . . . . . . . . . . . -56-
SECTION 14.7 Counterparts . . . . . . . . . . . . . . . . . . -57-
ANNEX I TERMS OF TRUST SECURITIES . . . . . . . . . . . . . . . I-1
EXHIBIT A-1 FORM OF SECURITY CERTIFICATE . . . . . . . . . . . . . A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE . . . . . . . . . A2-1
CROSS-REFERENCE TABLE*
----------------------
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
------------------- -----------
310(a) . . . . . . . . . . . . . . . . . . 5.3(a)
310(b) . . . . . . . . . . . . . . . . . . 5.3(c)
310(c) . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . 1.1 (Definition
of Officer's Certificate)
314(f) . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . 3.9(a)
315(b) . . . . . . . . . . . . . . . . . . 2.7
315(c) . . . . . . . . . . . . . . . . . . 3.9(b)
315(d) . . . . . . . . . . . . . . . . . . 3.9(c)
316(a) . . . . . . . . . . . . . . . . . . 2.6; Annex I,
Section 5
316(c) . . . . . . . . . . . . . . . . . . 3.6(e)
317(a) . . . . . . . . . . . . . . . . . . 3.8(h)
317(b) . . . . . . . . . . . . . . . . . . 3.8(i)
318 . . . . . . . . . . . . . . . . . . . . 2.1
---------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
WASHINGTON WATER POWER CAPITAL II
, 199
--------- -
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated
and effective as of , 199 , by the Trustees (as defined herein),
--------- -
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established Washington
Water Power Capital II (the "Trust"), a trust under the Delaware Business
Trust Act pursuant to a Declaration of Trust dated as of November 4, 1996
(the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on November 4, 1996, for the
sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have
been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the
Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and
that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will
be held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
-----------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes
and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
---------
405 of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
-----
"Authorized Officer" of a Person means any Person that is
------------------
authorized to legally bind such Person.
"Business Day" means any day other than Saturday, Sunday or any
------------
other day on which banking institutions in the City of Wilmington, Delaware
and The City of New York are authorized or required by any applicable law
to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to
------------ -- ---
time, or any successor legislation.
"Certificate" means a Common Security Certificate or a Security
-----------
Certificate.
"Closing Date" means the "Closing Time" and each "Date of
------------
Delivery" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
----
time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
----------
"Common Securities" has the meaning specified in Section 7.1.(a).
-----------------
"Common Securities Guarantee" means the guarantee agreement to be
---------------------------
dated as of ________, 199_ of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a certificate in fully
---------------------------
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b)
--------------------------
any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of
any Regular Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Institutional
----------------------
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at
the date of execution of this Agreement is located at Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii)
the Trust's Affiliates; and (b) any Holder of Trust Securities.
"Debenture Issuer" means The Washington Water Power Company, a
----------------
Washington corporation, or any successor entity resulting from any
consolidation, amalgamation, merger or other business combination, in its
capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a Delaware
-----------------
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
----------
Debenture Issuer under the Indenture to be held by the Institutional
Trustee.
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Depositary" has the meaning set forth in Section 9.1.
----------
"Distribution" means a distribution payable to Holders of Trust
------------
Securities in accordance with Section 6.1.
"Event of Default", in respect of the Trust Securities, means an
----------------
Event of Default as defined in the Indenture, so long as the same shall be
continuing under the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
----------------------------
Section 10.4(b).
"Guarantees" means the Common Securities Guarantee and the
----------
Securities Guarantee.
"Holder" means a Person in whose name a Certificate representing
------
a Trust Security is registered, such Person being a beneficial owner within
the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
------------------
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of _______ 1, 199_,
---------
between the Debenture Issuer and the Debenture Trustee, as supplemented.
"Institutional Trustee" has the meaning set forth in Section 5.3.
---------------------
"Institutional Trustee Account" has the meaning set forth in
-----------------------------
Section 3.8(c)(i).
"Investment Company" means an investment company as defined in
------------------
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
----------------------
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"Majority in liquidation amount of the Trust Securities" means,
------------------------------------------------------
except as provided in the terms of the Securities or by the Trust Indenture
Act, Holder(s) of outstanding Trust Securities voting together as a single
class or, as the context may require, Holders of outstanding Securities or
Holders of outstanding Common Securities voting separately as a class, who
are the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) of all outstanding Trust Securities
of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of
------------------
the Trust Securities as set forth in Annex I.
"Officer's Certificate" means, with respect to any Person, a
---------------------
certificate signed by an Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement of the nature and scope of the examination or
investigation upon which the statements contained in such Officer's
Certificate are based;
(c) a statement that, in the opinion of such officer, such officer
has made such examination or investigation as is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
------------
"Person" means a legal person, including any individual,
------
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Quorum" means a majority of the Regular Trustees or, if there
------
are only two Regular Trustees, both of them.
"Registrar" means the registrar for the Securities appointed by
---------
the Trust and shall initially be Wilmington Trust Company.
"Regular Trustee" has the meaning set forth in Section 5.1.
---------------
"Related Party" means, with respect to the Sponsor, any direct or
-------------
indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of
the Sponsor.
"Responsible Officer" means, with respect to the Institutional
-------------------
Trustee, any officer of the Institutional Trustee assigned by the
Institutional Trustee to administer its corporate trust matters.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or
---------
any successor rule or regulation.
"Securities" has the meaning specified in Section 7.1(a).
----------
"Securities Act" means the Securities Act of 1933, as amended
--------------
from time to time, or any successor legislation.
"Security Certificate" means a certificate representing a
--------------------
Security substantially in the form of Exhibit A-1.
"Securities Guarantee" means the guarantee agreement to be dated
--------------------
as of ________, 199_, of the Sponsor in respect of the Securities.
"Sponsor" means The Washington Water Power Company, a Washington
-------
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as
sponsor of the Trust.
"Tax Event" has the meaning set forth in Annex I hereto.
---------
"10% in liquidation amount of the Trust Securities" means, except
-------------------------------------------------
as provided in the terms of the Securities or by the Trust Indenture Act,
Holder(s) of outstanding Trust Securities voting together as a single class
or, as the context may require, Holders of outstanding Securities or
Holders of outstanding Common Securities voting separately as a class, who
are the record owners of 10% or more of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) of all outstanding Trust Securities
of the relevant class.
"Transfer Agent" means the transfer agent for the Securities
--------------
appointed by the Trust and shall initially be Wilmington Trust Company.
"Treasury Regulations" means the income tax regulations,
--------------------
including temporary and proposed regulations, promulgated under the Code by
the United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee
or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended from time to time, or any successor legislation.
"Trust Property" means (i) the Debentures, (ii) any cash or
--------------
deposit in, or owing to, the Institutional Trustee Account and (iii) all
proceeds and rights in respect of the foregoing and any other property and
assets for the time being held by the Institutional Trustee pursuant to the
trusts of this Declaration.
"Trust Securities" means the Common Securities and the
----------------
Securities.
"Underwriting Agreement" means the Underwriting Agreement for the
----------------------
offering and sale of Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall,
to the extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is
a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
SECTION 2.2 Lists of Holders of Trust Securities.
------------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Institutional Trustee (i) within 14 days after
each record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of
the Holders of the Trust Securities ("List of Holders") as of such record
date; provided, however, that neither the Sponsor nor the Regular Trustees
on behalf of the Trust shall be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most recent List
of Holders given to the Institutional Trustee by the Sponsor and the
Regular Trustees on behalf of the Trust; and provided, further, that in any
event such List of Holders will be provided to the Institutional Trustee
not less than once every 6 months pursuant to this Section 2.2(a)(i), and
(ii) at any other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days before such
List of Holders is given to the Institutional Trustee. The Institutional
Trustee shall preserve, in as current a form as is reasonably practicable,
all information contained in Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such capacity)
provided, however, that the Institutional Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
------------------------------------
Within 60 days after May 15 of each year, the Institutional
Trustee shall provide to the Holders of the Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act.
The Institutional Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
-----------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such documents, reports
and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Declaration that relate to any of the matters set forth in Section 314(c)
of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the
form of an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of
Securities may, by vote, on behalf of the Holders of all of the Securities,
waive any past Event of Default in respect of the Securities and its
consequences; provided, however, that if the underlying Event of Default
under the Indenture is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable.
Upon such waiver, any such default shall cease to exist, and any
Event of Default with respect to the Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Securities or impair any right consequent
thereon. Any waiver by the Holders of the Securities of an Event of
Default with respect to the Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Event of Default
with respect to the Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of the Common
Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the
Common Securities and its consequences; provided, however, that if the
underlying Event of Default under the Indenture is not waivable under the
Indenture, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided below
in this Section 2.6(b), the Event of Default under the Declaration shall
also not be waivable; and
provided, further, that, each Holder of Common Securities will be deemed to
have waived any such Event of Default and all Events of Default with
respect to the Common Securities and its consequences until all Events of
Default with respect to the Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the Holders of the Securities and only the Holders of
the Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Trust Securities. Subject to the
foregoing provisions of this Section 2.6(b), upon such waiver, any such
default shall cease to exist and any Event of Default with respect to the
Common Securities arising therefrom shall be deemed to have been cured for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Securities
shall constitute a waiver of the corresponding Event of Default under this
Declaration.
SECTION 2.7 Notice of Event of Default.
--------------------------
The Institutional Trustee shall give notice of any default
hereunder to the Holders of Trust Securities in the manner and to the
extent required to do so by the Trust Indenture Act, unless such default
shall have been cured or waived; provided, however, that in the case of any
default hereunder arising out of a default of the character specified in
Section 701(c) of the Indenture, no such notice to Holders shall be given
until at least seventy-five (75) days after the occurrence thereof; and
provided, further, that, subject to the provisions of Section 3.9, the
Institutional Trustee shall not be deemed to have knowledge of such default
unless either (i) a Responsible Officer of the Institutional Trustee shall
have actual knowledge of such default or (ii) the Institutional Trustee
shall have received written notice thereof from the Debenture Issuer, the
Sponsor, any Regular Trustee or any Holder. For the purpose of this
Section, the term "default" means any event which is, or after notice or
lapse of time, or both, would become, an Event of Default.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust is named "Washington Water Power Capital II," as such
name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by
the Regular Trustees.
SECTION 3.2 Office.
------
The address of the principal office of the Trust is c/o The
Washington Water Power Company, 1411 East Mission Avenue, Spokane,
Washington 99202. On ten Business Days' written notice to the Holders of
Trust Securities, the Regular Trustees may designate another principal
office.
SECTION 3.3 Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale to
acquire the Debentures, and (b) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to
be undertaken) any activity that would cause the Trust to be treated for
United States federal income tax purposes as an association taxable as a
corporation.
SECTION 3.4 Authority.
---------
Subject to the limitations provided in this Declaration and to
the specific duties of the Institutional Trustee, the Regular Trustees
shall have exclusive and complete authority to carry out the purposes of
the Trust. An action taken by the Regular Trustees in accordance with
their powers shall constitute the act of and serve to bind the Trust and an
action taken by the Institutional Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind
the Trust. In dealing with the Trustees acting on behalf of the Trust, no
person shall be required to inquire into the authority of the Trustees to
bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Debentures
and the Institutional Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of
the Trust, but shall have an undivided beneficial interest in the assets of
the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
-----------------------------------------
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities and the Common Securities
in accordance with this Declaration; provided, however, that, the Trust may
issue no more than one series of Securities and no more than one series of
Common Securities and, provided further, that there shall be no interests
in the Trust other than the Trust Securities, and the issuance of Trust
Securities shall be limited to a simultaneous issuance of both Securities
and Common Securities on each Closing Date;
(b) in connection with the issuance and sale of the Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Securities in any state in
which the Sponsor has determined to qualify or register such
Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to The New York Stock Exchange, Inc. or any other national stock
exchange or the Nasdaq Stock Market's National Market for listing upon
notice of issuance of any Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Securities under
Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement providing
for the sale of the Securities;
(c) to acquire the Debentures with the proceeds of the sale of
the Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause the Debentures to be registered in the name of
the Institutional Trustee as a Trustee hereunder;
(d) to give the Sponsor and the Institutional Trustee prompt
written notice of the occurrence of a Tax Event; provided, however, that
the Regular Trustees shall consult with the Sponsor and the Institutional
Trustee before taking or refraining from taking any Ministerial Action in
relation to a Tax Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and
with respect to, for the purposes of 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Securities and Holders of Common
Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the Trust
Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against
the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by 314(a)(4) of
the Trust Indenture Act to the Institutional Trustee, which certificate may
be executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar
and Transfer Agent for the Securities or to appoint a Paying Agent for the
Trust Securities as provided in Section 7.2;
(m) to give prompt written notice to the Holders of the Trust
Securities of any notice received from the Debenture Issuer of its election
to defer payments of interest on the Debentures by extending the interest
payment period under the Indenture;
(n) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the
laws of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust not to be treated for United States
federal income tax purposes as an association taxable as a
corporation; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes;
provided, however, that such action does not materially and adversely
affect the interests of Holders; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular Trustees,
on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none
of the powers or the authority of the Institutional Trustee set forth in
Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
The Trust shall not, and the Trustees (including the
Institutional Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall
not and the Trustees (including the Institutional Trustee) shall cause the
Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Trust
Securities pursuant to the terms of this Declaration and of the Trust
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Trust Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Trust Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures,
(B) waive any past default that is waivable under the Indenture, (C)
exercise any right to rescind or annul any declaration that the
principal of all the Debentures shall be immediately due and payable,
or (D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required
unless the Trust shall have received an opinion of counsel to the
effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes
the Trust will be treated as an association taxable as a corporation.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
----------------------------------------------
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Institutional Trustee in trust for the
benefit of the Holders of the Trust Securities. The right, title and
interest of the Institutional Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as
Institutional Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right,
title and interest in the Debentures to the Regular Trustees or to the
Delaware Trustee (it being understood, however, that the entity acting as
Institutional Trustee may also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name of and
under the exclusive control of the Institutional Trustee on behalf of
the Holders of the Trust Securities and, upon the receipt of payments
of funds made in respect of the Debentures held by the Institutional
Trustee, deposit such funds into the Institutional Trustee Account and
make payments to the Holders of the Trust Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds
in the Institutional Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Institutional
Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Securities by a nationally
recognized statistical rating organization, within the meaning of Rule
436(g)(2) under the Securities Act or any successor rule or
regulation;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Securities and the
Common Securities to the extent the Debentures are redeemed or mature;
and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Trust Securities, engage
in such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of Trust
Securities upon the occurrence of certain special events (as may be
defined in the terms of the Trust Securities) arising from a change in
law or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Trust Securities.
(d) The Institutional Trustee shall take all actions and
perform all duties that may be specifically required of the Institutional
Trustee pursuant to the terms of the Trust Securities.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration
or the Trust Indenture Act, and if such Institutional Trustee shall have
failed to take such Legal Action, the Holders of the Securities may take
such Legal Action, to the same extent as if such Holders of Securities held
a principal amount of Debentures equal to the liquidation amount of such
Securities, without first proceeding against the Institutional Trustee or
the Trust; provided, however, that if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on the date
such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Securities may
directly institute a proceeding for enforcement of payment to such Holder
of the principal of or interest on the Debentures having a principal amount
equal to the aggregate liquidation amount of the Securities of such Holder
(a "Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the
Holders of the Common Securities will be subrogated to the rights of such
Holder of Securities to the extent of any payment made by the Issuer to
such Holder of Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee
unless either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Trust Securities
pursuant to the terms of the Trust Securities; or
(ii) a Successor Institutional Trustee has been appointed and
has accepted that appointment in accordance with Section 5.7.
(g) The Institutional Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Institutional Trustee occurs and is continuing,
the Institutional Trustee shall, for the benefit of Holders of the Trust
Securities, enforce its rights as holder of the Debentures subject to the
rights of the Holders pursuant to the terms of such Trust Securities.
(h) The Institutional Trustee shall be authorized to undertake
all actions set forth in Section 317(a) of the Trust Indenture Act.
(i) The Institutional Trustee may, with the consent of the
Regular Trustees, authorize one or more Persons (each, a "Paying Agent") to
pay Distributions, redemption payments or liquidation payments on behalf of
the Trust with respect to all Trust Securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any Paying
Agent may be removed by the Institutional Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at
any time by the Institutional Trustee.
(j) Subject to this Section 3.8, the Institutional Trustee
shall have none of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Institutional
Trustee shall not take any action that is inconsistent with the purposes
and functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities.
-----------------------------------
(a) The Institutional Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and in the terms of the Trust
Securities and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived), the Institutional Trustee
shall exercise such of the rights and powers vesting in it by this
Declaration, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Institutional Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Institutional
Trustee shall be determined solely by the express provisions of
this Declaration and in the terms of the Trust Securities, and
the Institutional Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Declaration, and no implied covenants or
obligations shall be read into this Declaration against the
Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; provided, however, that in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform
to the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the
Institutional Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Institutional Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of at least a Majority in
liquidation amount of the outstanding Trust Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee or exercising any trust or
power conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require any of the
Trustees 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;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Trust Property
shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to
the Institutional Trustee under this Declaration, the Trust Indenture
Act and, to the extent applicable, Rule 3a-7 under the Investment
Company Act;
(vi) the Institutional Trustee shall have no duty or liability
for, or with respect to the value, genuineness, existence or
sufficiency of, the Trust Property or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account established by the Institutional Trustee
pursuant to this Declaration and except to the extent otherwise
required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for the default or misconduct of the
Regular Trustees or the Sponsor.
(c) All payments made by the Institutional Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the income
and proceeds from the Trust Property to enable the Institutional Trustee or
Paying Agent to make payments in accordance with the terms hereof. Each
Holder, by its acceptance of a Trust Security, agrees that it will look
solely to the income and proceeds from the Trust Property to the extent
available for distribution to it as herein provided and that the Trustees
are not personally liable to it for any amount distributable in respect of
any Trust Security or for any other liability in respect of any Trust
Security. This Section 3.9(c) does not limit the liability of the Trustees
expressly set forth elsewhere in this Declaration or, in the case of the
Institutional Trustee, in the Trust Indenture Act.
(d) No Regular Trustee shall be liable for any act or omission
to act hereunder, except for its own gross negligence or wilful misconduct.
SECTION 3.10 Certain Rights of Institutional Trustee.
---------------------------------------
Subject to the provisions of Section 3.9 and to the applicable
provisions of the Trust Indenture Act:
(a) the Institutional Trustee may rely and shall be protected
in acting or refraining from acting in good faith upon any resolution,
opinion of counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, appraisal, 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) if (A) in performing its duties under this Declaration the
Institutional Trustee is required to decide between alternative
courses of action or (B) in construing any of the provisions in this
Declaration the Institutional Trustee finds the same ambiguous or
inconsistent with any other provisions contained herein or (C) the
Institutional Trustee is unsure of the application of any provision of
this Declaration, then, except as to any matter as to which the
Holders of Securities are entitled to vote under the terms of this
Declaration, the Institutional Trustee shall deliver a notice to the
Sponsor requesting written instructions of the Sponsor as to the
course of action to be taken. The Institutional Trustee shall take
such action, or refrain from taking such action, as the Institutional
Trustee shall be instructed in writing to take, or to refrain from
taking, by the Sponsor; provided, however, that if the Institutional
Trustee does not receive such instructions of the Sponsor within 10
Business Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which to the extent
practicable shall not be less than 2 Business Days), it may, but shall
be under no duty to, take or refrain from taking such action not
inconsistent with this Declaration as it shall deem advisable and in
the best interests of the Holders, in which event the Institutional
Trustee shall have no liability except for its own bad faith,
negligence or wilful misconduct;
(c) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Institutional Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officer's Certificate;
(d) the Institutional Trustee may consult with counsel of its
selection, 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 Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any of the Holders pursuant to this
Declaration, unless such Holders shall have offered to the
Institutional Trustee reasonable security or indemnity against the
costs, expenses (including reasonable attorneys' fees and expenses)
and liabilities which might be incurred by it in complying with such
request or direction;
(f) the Institutional 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, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine, unless requested in writing to do so by
one or more Holders, but the Institutional Trustee, in its discretion,
may make such further inquiry or investigation into such facts or
matters as it may see fit;
(g) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Institutional 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;
provided, however, that the Institutional Trustee shall be responsible
for its own negligence or recklessness with respect to selection of
any agent or attorney appointed by it hereunder;
(h) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration;
(i) the Institutional Trustee shall not be charged with
knowledge of any default or Event of Default with respect to the Trust
Securities unless either (A) a Responsible Officer of the
Institutional Trustee shall have actual knowledge of the default or
Event of Default or (B) written notice of such default or Event of
Default shall have been given to the Institutional Trustee by the
Sponsor, the Regular Trustees or any Holder;
(j) no provision of this Declaration shall be deemed to impose
any duty or obligation on the Institutional 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 Institutional 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; and no permissive
or discretionary power or authority available to the Institutional
Trustee shall be construed to be a duty;
(k) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Institutional Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured to
it under the terms of this Declaration or adequate indemnity against
such risk or liability is not reasonably assured to it;
(l) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any securities) (or any
rerecording, refiling or reregistration thereof);
(m) the Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction; and
(n) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Institutional Trustee (A) may request
instructions from the Holders, which instructions may only be given by
the Holders of the same amount of the Trust Securities as would be
entitled to direct the Institutional Trustee under the terms of this
Declaration in respect of such remedies, rights or actions, (B) may
refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Institutional Trustee
described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
----------------------
Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act, a majority of or, if there
are only two, any Regular Trustee or, if there is only one, such Regular
Trustee is authorized to execute on behalf of the Trust any documents that
the Regular Trustees have the power and authority to execute pursuant to
Section 3.6; provided that, the registration statement referred to in
-------- ----
Section 3.6(b)(i), including any amendments thereto, shall be signed by all
of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust
-------------------------------------------------
Securities.
----------
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not
assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust
or any part thereof. The Trustees make no representations as to the
validity or sufficiency of this Declaration or the Trust Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for forty-five (45) years from
the Closing Date.
SECTION 3.15 Mergers.
-------
(a) The Trust may not merge, consolidate or amalgamate with or
into, or enter into any other business combination with, or be replaced by,
or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other body, except as described in Section
3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees and without
the consent of the Holders of the Trust Securities, the Delaware Trustee or
the Institutional Trustee, merge, consolidate or amalgamate with or into,
or enter into any other business combination with, or be replaced by, or
convey, transfer or lease its properties and assets substantially as an
entirety to, a trust organized as such under the laws of any state;
provided, however, that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Trust Securities; or
(B) substitutes for the Trust Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities rank
the same as the Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly appoints a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Securities or any Successor Securities are listed, or
any Successor Securities will be listed upon notification of issuance,
on any national securities exchange or with another organization on
which the Securities are then listed or quoted, if any;
(iv) such merger, consolidation, amalgamation, other business
combination, replacement, conveyance, transfer or lease does not cause
the Securities (including any Successor Securities) to be downgraded
by any nationally recognized statistical rating organization within
the meaning of Rule 436(g)(12) under the Securities Act or any
successor rule or regulation;
(v) such merger, consolidation, amalgamation, other business
combination, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders
of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of such
Holders' interests in the Securities as a result of such merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation, other
business combination, replacement, conveyance, transfer or lease, the
Sponsor has received an opinion of counsel to the effect that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the Trust
Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders'
interest in the new entity);
(B) following such merger, consolidation, amalgamation,
other business combination, replacement, conveyance, transfer or
lease, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation,
other business combination, replacement, conveyance, transfer or
lease the Trust (or the Successor Entity) will continue not to be
treated as an association taxable as a corporation for United
States federal income tax purposes; and
(viii) the Sponsor or any permitted successor guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Trust
Securities, merge, consolidate or amalgamate with or into, enter into any
other business combination with or be replaced by, or convey, transfer or
lease its properties and assets substantially as an entirety to, any other
entity or permit any other entity to merge, consolidate or amalgamate,
merge with or into, enter into any other business combination with or
replace it if such merger, consolidation, amalgamation, other business
combination, replacement, conveyance, transfer or lease would cause the
Trust or Successor Entity to be treated as an association taxable as a
corporation for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issuance and sale of the Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission
a registration statement on Form S-3 in relation to the Securities,
including any amendments thereto;
(b) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Securities
and to do any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and
filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such states;
(c) to prepare for filing by the Trust an application to
the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing upon notice of issuance of any
Securities;
(d) to prepare for filing by the Trust with the Commission
a registration statement on Form 8-A relating to the registration of
the Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement
providing for the sale of the Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
------------------
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Trust Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities; provided,
however, that the number of Trustees shall in no event be less than
two (2); and provided, further, that, (1) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the
Sponsor (a "Regular Trustee"); (2) one Trustee shall be the
Institutional Trustee for so long as this Declaration is required to
qualify as an indenture under the Trust Indenture Act, and such
Trustee may also serve as Delaware Trustee if it meets the applicable
requirements; and (3) there shall be a Delaware Trustee to the extent
required under Section 5.2.
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the state of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law;
provided, however, that if the Institutional Trustee has its principal
place of business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Institutional Trustee may also be
the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
----------------------------------
(a) There shall at all times be one Trustee which shall act as
"Institutional Trustee" which shall be:
(i) not an Affiliate of the Sponsor; and
(ii) a corporation organized and doing business under the laws
of the United States, any state or territory thereof or the District
of Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least Fifty
Million Dollars ($50,000,000) and subject to supervision or
examination by federal, state, territorial or District of Columbia
authority, or
(iii)if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least Fifty Million Dollars
($50,000,000) or the United States Dollar equivalent of the applicable
foreign currency and subject to supervision or examination by
authority of such foreign government or a political subdivision
thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,
and, in either case, qualified and eligible under this Article and the
Trust Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of such supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of
the Trust Indenture Act) shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
(d) The Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company.
SECTION 5.4 Certain Qualifications of Regular Trustees and Delaware
-------------------------------------------------------
Trustee Generally.
-----------------
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that shall
act through one or more Authorized Officers.
SECTION 5.5 Regular Trustees.
----------------
The initial Regular Trustees shall be:
Lawrence J. Pierce
Dorothy K. Mercer.
(a) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any
matter over which the Regular Trustees have power to act, any power of the
Regular Trustees may be exercised by, or with the consent of, any one such
Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable law,
any Regular Trustee is authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power and authority to cause
the Trust to execute pursuant to Section 3.6, provided, however, that the
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by all of the Regular Trustees.
(c) A Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Regular
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 5.6 Delaware Trustee.
-----------------
The initial Delaware Trustee shall be:
Wilmington Trust Company.
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
-------------------------------------------------
(a) Subject to Section 5.7(b), Trustees may be appointed or
removed without cause at any time except during an Event of Default:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities.
(b) (i) The Institutional Trustee shall not be removed in
accordance with Section 5.7(a) until a Successor Institutional Trustee has
been appointed and has accepted such appointment by written instrument
executed by such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Delaware Trustee shall not be removed in
accordance with this Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee
and delivered to the Sponsor and the Trust, which resignation shall take
effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) no such resignation of the Institutional Trustee shall be
effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered to
the Trust, the Sponsor and the resigning Institutional Trustee;
or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Trust Securities; and
(ii) no such resignation of the Delaware Trustee shall be
effective until a Successor Delaware Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use all
reasonable efforts to promptly appoint a Successor Delaware Trustee or
Successor Institutional Trustee as the case may be if the Institutional
Trustee or the Delaware Trustee delivers an instrument of resignation in
accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in
this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Institutional Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Institutional Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper and prescribe, appoint a
Successor Institutional Trustee or Successor Delaware Trustee, as the case
may be.
(f) No Institutional Trustee or Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Institutional
Trustee or Successor Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number
of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties
of a Trustee shall not operate to annul the Trust. Whenever a vacancy in
the number of Regular Trustees shall occur, until such vacancy is filled by
the appointment of Regular Trustee in accordance with Section 5.7, the
Regular Trustees in office, regardless of their number, shall have all the
powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
SECTION 5.10 Meetings.
--------
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any
Regular Trustee. Regular meetings of the Regular Trustees may be held at a
time and place fixed by resolution of the Regular Trustees. Notice of any
in-person meetings of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Regular Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours
before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Regular Trustee at a meeting shall constitute
a waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees.
In the event there is only one Regular Trustee, any and all action of such
Regular Trustee shall be evidenced by a written consent of such Regular
Trustee.
SECTION 5.11 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of
21 his or her power for the purpose of executing any documents contemplated
in Section 3.6, including any registration statement or amendment thereto
filed with the Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as
set forth herein.
Section 5.12 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any corporation into which the Institutional Trustee or the
Delaware Trustee, as the case may be, may be merged or converted or with
which either may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of the Institutional Trustee or the Delaware Trustee, as the case
may be, shall be the successor of the Institutional Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the Trust Securities.
Distributions shall be made on the Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If
and to the extent that the Debenture Issuer makes a payment of interest
(including Compounded Interest (as defined in the Indenture) and Additional
Interest (as defined in the Indenture)), premium and/or principal on the
Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Trust Securities.
---------------------------------------------
(a) The Regular Trustees shall on behalf of the Trust issue one
class of securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are
set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust
by a Regular Trustee. Such signature shall be the manual or facsimile
signature of any present or any future Regular Trustee. In case any
Regular Trustee of the Trust who shall have signed any of the Trust
Securities shall cease to be such Regular Trustee before the Certificates
so signed shall be delivered by the Trust, such Certificates nevertheless
may be delivered as though the person who signed such Certificates had not
ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of
such Trust Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation of any stock exchange on which Trust
Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of
the Trust Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Trust Securities as provided in this
Declaration and the receipt of the consideration to be received therefor,
the Trust Securities so issued shall be deemed to be validly issued, fully
paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
SECTION 7.2 Paying Agent.
------------
The Trust shall appoint a paying agent (the "Paying Agent") and
may appoint one or more additional paying agents in such other locations as
it shall determine. The term "Paying Agent" includes any additional paying
agent. The Trust may change any Paying Agent without prior notice to any
Holder. The Trust shall notify the Institutional Trustee of the name and
address of any Agent not a party to this Declaration. If the Trust fails
to appoint or maintain another entity as Paying Agent, the Institutional
Trustee shall act as such. The Trust or any of its Affiliates may act as
Paying Agent. Wilmington Trust Company shall initially act as Paying Agent
for the Securities and the Common Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
--------------------
(a) The Trust shall terminate:
(i) upon the occurrence of an Event of Default described in
clause (d) or (e) of Section 701 of the Indenture;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the filing of a certificate of
cancellation with respect to the Trust after having obtained the
consent of a majority in liquidation amount of the Trust Securities
voting together as a single class to file such certificate of
cancellation; or the revocation of the Sponsor's charter and the
expiration of 90 days after the date of revocation without a
reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Trust Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Trust
Securities;
(v) upon the occurrence and continuation of a Tax Event in
connection with which the Trust shall have been dissolved in
accordance with the terms of the Trust Securities and all of the
Debentures endorsed thereon shall have been distributed to the Holders
of Securities in exchange for all of the Trust Securities; or
(vi) before the issuance of any Trust Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust except as contemplated in Section 1005 of the
Indenture.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Trust Securities.
----------------------------
(a) Trust Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Trust Securities. Any transfer or
purported transfer of any Trust Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Securities shall be freely
transferable.
(c) The Securities are to be initially registered in the name
of Cede & Co., as nominee for The Depository Trust Company (the
"Depositary") and the Security Certificates so initially registered shall
bear such legends as required by the Depositary. Such Securities shall not
be transferable or exchangeable, nor shall any purported transfer be
registered, except as follows:
(i) such Securities may be transferred in whole, and
appropriate registration of transfer effected, if such transfer is by
such nominee to the Depositary, or by the Depositary to another
nominee thereof, or by any nominee of the Depositary to any other
nominee thereof, or by the Depositary or any nominee thereof to any
successor securities depositary or any nominee thereof; and
(ii) such Securities shall be exchanged for Securities
Certificates registered in the respective names of the beneficial
holders thereof, and thereafter shall be transferable without
restriction, if:
(A) the Depositary, or any successor securities depositary,
shall have notified the Company and the Institutional Trustee that it
is unwilling or unable to continue to act as securities depositary
with respect to such Securities and the Institutional Trustee shall
not have been notified by the Company within ninety (90) days of the
identity of a successor securities depositary with respect to such
Securities;
(B) the Company shall have delivered to the Institutional
Trustee an Officer's Certificate to the effect that such Securities
shall be so exchangeable on and after a date specified therein; or
(C) (1) an Event of Default shall have occurred and be
continuing, (2) the Institutional Trustee shall have given notice of
such Event of Default pursuant to Section 2.7 of this Declaration and
(3) there shall have been delivered to the Company and the
Institutional Trustee an opinion of counsel to the effect that the
interests of the beneficial owners of such Securities in respect
thereof will be materially impaired unless such owners become Holders
of Securities Certificates.
(d) The Sponsor shall maintain 100% direct ownership of the
Common Securities by the Sponsor or any Affiliate thereof, except as
otherwise provided in Section 1005 of the Indenture.
SECTION 9.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may reasonably require) in respect of any documentary stamp tax or
other similar governmental charges that may be imposed in relation to it.
Upon surrender for registration of transfer of any Certificate, the Regular
Trustees shall cause one or more new Certificates to be issued in the name
of the designated transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a written instrument
of transfer in form satisfactory to the Regular Trustees duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to
the rights and be subject to the obligations of a Holder hereunder upon the
receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 9.3 Deemed Trust Security Holders.
-----------------------------
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole
holder of such Certificate and of the Trust Securities represented by such
Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the Trust
Securities represented by such Certificate on the part of any Person,
whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Security Certificates.
---------------------
(a) Security Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such Securities; and
(b) Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Securities
may be listed, or to conform to usage.
SECTION 9.5 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate;
and
(b) there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep each of them
harmless,
then, in the absence of notice that such Certificate shall have been
acquired by a person purporting to be a bona fide purchaser, any Regular
Trustee on behalf of the Trust shall execute and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like denomination. In connection with the issuance of
any new Certificate under this Section 9.5, the Regular Trustees may
require the payment of a sum sufficient to cover any documentary stamp tax
or other similar governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Trust Securities which shall be made solely from assets of the Trust;
or
(ii) required to pay to the Trust or to any Holder of Trust
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of the Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Trust
Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than the duties imposed on the
Institutional Trustee under the Trust Indenture Act), are agreed by the
parties hereto to replace such other duties and liabilities of such
Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Trust Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at law or in
equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have
no duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not
be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4 Indemnification.
---------------
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no reason-
able cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment
in its favor by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged
to be liable to the Trust unless and only to the extent that the Court
of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such expenses which such Court of Chancery or such other court shall
deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor only as authorized in the specific case upon a determination
that indemnification of the Company Indemnified Person is proper in
the circumstances because he has met the applicable standard of con-
duct set forth in paragraphs (i) and (ii). Such determination shall
be made (1) by the Regular Trustees by a majority vote of a quorum
consisting of such Regular Trustees who were not parties to such
action, suit or proceeding, (2) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees
so directs, by independent legal counsel in a written opinion, or (3)
by the Holders of the Common Securities.
(v) Expenses (including attorneys' fees and expenses) incurred
by a Company Indemnified Person in defending civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by
the Sponsor in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf such
Company Indemnified Person to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the Sponsor
as authorized in this Section 10.4(a). Notwithstanding the foregoing,
no advance shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by a majority
vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of
the Trust, that, based upon the facts known to the Regular Trustees,
counsel or the Common Security Holder at the time such determination
is made, such Company Indemnified Person acted in bad faith or in a
manner that such person did not believe to be in or not opposed to the
best interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event
shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Holders of the Common Securities
reasonably determine that such person deliberately breached his duty
to the Trust or the Holders of the Securities.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor or vote of Holders of Securities or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Sponsor and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then
existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a merger, consolidation, amalgamation or
other business combination so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or
is or was serving at the request of such constituent entity as a
director, trustee, officer, employee or agent of another entity, shall
stand in the same position under the provisions of this Section
10.4(a) with respect to the resulting or surviving entity as he would
have with respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Sponsor agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the
Institutional Trustee and the Delaware Trustee, and (iv) any officers,
directors, shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Institutional Trustee and the
Delaware Trustee (each of the Persons in (i) through (iv) being referred to
as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense including taxes (other than taxes based on the income of
such Fiduciary Indemnified Person) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration or the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 10.4(b) shall survive
the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust
and the Holders of Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive
with the business of the Trust, shall not be deemed wrongful or improper.
No Covered Person, the Sponsor, the Delaware Trustee, or the Institutional
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered
Person, the Sponsor, the Delaware Trustee and the Institutional Trustee
shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee
and the Institutional Trustee may engage or be interested in any financial
or other transaction with the Sponsor or any Affiliate of the Sponsor, or
may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records
and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted
accounting principles, consistently applied. The Trust shall use the
accrual method of accounting for United States federal income tax purposes.
The books of account and the records of the Trust shall be examined by and
reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Trust Securities, within 90 days after
the end of each Fiscal Year of the Trust, annual financial statements of
the Trust, including a balance sheet of the Trust as of the end of such
Fiscal Year, and the related statements of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Trust Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Trust Securities held by
each Holder as is required by the Code and the Treasury Regulations.
Notwithstanding any right under the Code to deliver any such statement at a
later date, the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each calendar year.
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax
returns required to be filed by the Regular Trustees on behalf of the Trust
with any state or local taxing authority.
SECTION 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments
of funds in respect of the Debentures held by the Institutional Trustee
shall be made directly to the Institutional Trustee Account and no other
funds of the Trust shall be deposited in the Institutional Trustee Account.
The sole signatories for such accounts shall be designated by the Regular
Trustees; provided, however, that the Institutional Trustee shall designate
the signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
-----------
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Trust to assist it in determining
the extent of, and in fulfilling, its withholding obligations. The Regular
Trustees shall file required forms with applicable jurisdictions and,
unless an exemption from withholding is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and
pay over any amounts to any authority with respect to distributions or
allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event
of any claimed over withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be withheld
was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Trust Securities, this Declaration may only be
amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the
Institutional Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee;
(b) no amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officer's
Certificate from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have first
received:
(A) an Officer's Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Trust
Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms
of the Trust Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to be classified for purposes of United
States federal income taxation as an association taxable as a
corporation;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture
Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(c) at such time after the Trust has issued any Trust
Securities that remain outstanding, any amendment that would adversely
affect the rights, privileges or preferences of any Holder of Trust
Securities may be effected only with such additional requirements as may be
set forth in the terms of such Trust Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Trust Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Trust Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority which amendment does
not have a material adverse effect on the right, preferences or
privileges of the Holders; and
(v) modify, eliminate and/or add any provision of, from or to
this Declaration in any other respect so long as such modification,
elimination or addition shall not adversely affect the interests of
the Holders of Securities in any material respect.
SECTION 12.2 Meetings of the Holders of Trust Securities;
--------------------------------------------
Action by Written Consent.
-------------------------
(a) Meetings of the Holders of any class of Trust Securities
may be called at any time by the Regular Trustees (or as provided in the
terms of the Trust Securities) to consider and act on any matter on which
Holders of such class of Trust Securities are entitled to act under the
terms of this Declaration, the terms of the Trust Securities or the rules
of any stock exchange on which the Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of such
class if directed to do so by the Holders of at least 33% in liquidation
amount of such class of Trust Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a writing stating
that the signing Holders of Trust Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Trust Securities calling a meeting shall specify in
writing the Trust Security Certificates held by the Holders of Trust
Securities exercising the right to call a meeting and only those Trust
Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph
has been met.
(b) Except to the extent otherwise provided in the terms of the
Trust Securities, the following provisions shall apply to meetings of
Holders of Trust Securities:
(i) notice of any such meeting shall be given to all the
Holders of Trust Securities having a right to vote thereat at least 21
days and not more than 18 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Trust
Securities is permitted or required under this Declaration or the
rules of any stock exchange on which the Securities are listed or
admitted for trading, such vote, consent or approval may be given at a
meeting of the Holders of Trust Securities. Any action that may be
taken at a meeting of the Holders of Trust Securities may be taken
without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Trust Securities owning not less
than the minimum amount in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Trust Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall
be given to the Holders of Trust Securities entitled to vote who have
not consented in writing. The Regular Trustees may specify that any
written ballot submitted to the Trust Security Holder for the purpose
of taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;
(ii) each Holder of a Trust Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Trust
Securities is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. No proxy shall be
valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Trust Securities executing it. Except
as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Trust Securities were stockholders
of a Delaware corporation;
(iii) each meeting of the Holders of the Trust Securities shall
be conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms
of the Trust Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Securities are then listed or
trading, otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings
of Holders of Trust Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any
Holders of Trust Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
-------------------------------------------------------
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor
Institutional Trustee's acceptance of its appointment as Institutional
Trustee, that:
(a) the Institutional Trustee is a Delaware banking corporation
with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the
Institutional Trustee of the Declaration has been duly authorized by
all necessary corporate action on the part of the Institutional
Trustee. The Declaration has been duly executed and delivered by the
Institutional Trustee, and it constitutes a legal, valid and binding
obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of this Declaration
by the Institutional Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration
with or notice to, any Delaware or other state or any federal banking
authority is required for the execution, delivery or performance by
the Institutional Trustee of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Delaware Trustee's acceptance
of its appointment as Delaware Trustee, that:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) No consent, approval or authorization of, or registration
with or notice to, any Delaware or other state or any federal banking
authority is required for the execution, delivery or performance by
the Delaware Trustee of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
-------
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Trust may give notice of to the Holders of the Trust Securities):
Washington Water Power Capital II
c/o The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Telecopy: (509) 489-4879
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Trust Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: (302) 651-1576
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as
the Institutional Trustee may give notice of to the Holders of the
Trust Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: (302) 651-1576
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Trust):
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Telecopy: (509) 482-4879
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when received
in person 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 14.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware, and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor
trust. The provisions of this Declaration shall be interpreted to further
this intention of the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns.
----------------------
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to
be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
---------------------------------------------
LAWRENCE J. PIERCE,
as Regular Trustee
---------------------------------------------
DOROTHY K. MERCER,
as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
------------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By:
------------------------------------------
Name:
Title:
THE WASHINGTON WATER POWER COMPANY,
as Sponsor
By:
------------------------------------------
Name:
Title:
ANNEX I
ANNEX I
TERMS OF
% SECURITIES, SERIES B
---- ---------
% TRUST ORIGINATED COMMON SECURITIES, SERIES B
----
Pursuant to Section 7.1 of the Amended and Restated Declaration
of Trust, dated as of , 199 (as amended from time to time, the
-------- -
"Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Securities and the Common
Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in
such Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
----------------------
(a) Securities. Securities of the Trust with an
---------- ----------
aggregate liquidation amount with respect to the assets of the Trust of
($ ) and a liquidation amount with respect
--------------------- -----------
to the assets of the Trust of $ per security, are hereby designated for
---
the purposes of identification only as " % Securities, Series
---- ---------
B" (the "Securities"). The Security Certificates evidencing the Securities
shall be substantially in the form of Exhibit A-1 to the Declaration, with
such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Securities are listed.
(b) Common Securities. Common Securities of the Trust
----------------- -------
with an aggregate liquidation amount with respect to the assets of the
Trust of dollars ($ ) and a liquidation
---------------------- ---------
amount with respect to the assets of the Trust of $ per common security,
---
are hereby designated for the purposes of identification only as " %
----
Trust Originated Common Securities, Series B" (the "Common Securities").
The Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a
rate of % per annum (the "Coupon Rate") of the stated liquidation
----
amount of $ per Security, such rate being the rate of interest payable
---
on the Debentures to be held by the Institutional Trustee. Distributions
in arrears for more than one Distribution period will bear interest thereon
compounded at the Coupon Rate (to the extent permitted by
---------
applicable law). The term "Distributions" as used herein includes such
cash distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full
Distribution period on the basis of a 360-day year of twelve
---------
30-day months, and for any period shorter than a full
---------
Distribution period for which Distributions are computed, Distributions
will be computed on the basis of the actual number of days elapsed per
-day Distribution period.
---
(b) Distributions on the Securities will be cumulative, will
accrue from , 199 , and will be payable in arrears, on
------ - ---------
of each year, commencing on , 199 , except as
--------- -------- -- -
otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not exceeding
--
consecutive Distribution periods (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debentures,
provided, however, that no Extension Period shall last beyond the date of
maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral,
---------
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded during
---------
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period;
provided, however, that such Extension Period, together with all such
previous and further extensions thereof, may not exceed consecutive
--
Distribution periods or extend beyond the maturity of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. The relevant record dates for the Securities shall
conform to the rules of any securities exchange on which the securities are
listed and, if none, shall be selected by the Regular Trustees, which dates
shall be at least one Business Day but less than 50 Business Days before
the relevant payment dates, which payment dates correspond to the interest
payment dates on the Debentures. The relevant record dates for the Common
Securities shall be the same record date as for the Securities.
Distributions payable on any Trust Securities that are not punctually paid
on any Distribution payment date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Trust Securities are registered on
the relevant record date, and such defaulted Distribution will instead be
payable to the Person in whose name such Trust Securities are registered on
the special record date or other specified date determined in accordance
with the Indenture. If any date on which Distributions are payable on the
Trust Securities is not a Business Day, then payment of the Distribution
payable on such date will be made on the next succeeding day that is a
Business Day except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date.
(d) In the event that there is any money or other property held
by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders of the
Trust Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Trust Securities
on the date of the dissolution, winding-up or termination, as the case may
be, will be entitled to receive out of the assets of the Trust available
for distribution to Holders of Trust Securities after satisfaction of
liabilities of creditors an amount equal to the aggregate of the stated
liquidation amount of $ per Trust Security plus accrued and unpaid
---
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, in connection with such dissolution,
winding-up or termination, Debentures in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of such Trust
Securities, with an interest rate equal to the Coupon Rate of, accrued and
unpaid interest in an amount equal to the accrued and unpaid Distributions
on, such Trust Securities, shall be distributed on a Pro Rata basis to the
Holders of the Trust Securities in exchange for such Trust Securities.
If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts
payable directly by the Trust on the Trust Securities shall be paid on a
Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the
Debenture Issuer or pursuant to a Tax Event as described below), the
proceeds from such repayment shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption
price of $ per Trust Security plus an amount equal to accrued and unpaid
---
Distributions thereon at the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more than
60 days' notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Securities will be redeemed Pro
Rata and the Securities to be redeemed will be as described in Section
4(f)(ii) below.
(c) If, at any time, a Tax Event (as defined below) shall occur
and be continuing, at the option of the Sponsor, within 90 days following
the occurrence of such Tax Event, either (i) the Regular Trustees may
dissolve the Trust, and, after satisfaction of creditors, cause Debentures
held by the Institutional Trustee, having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on, and having the same record date for
payment as the Trust Securities, to be distributed to the Holders of the
Trust Securities in liquidation of such Holders' interests in the Trust on
a Pro Rata basis, or (ii) the Debenture Issuer may, upon not less than 30
nor more than 60 days' notice, redeem the Debentures, in whole but not in
part, for cash, and, following such redemption, Trust Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the Redemption
Price on a Pro Rata basis; and provided, however, further, that, if at the
time there is available to the Trust the opportunity to eliminate, within
the 90 day period, the Tax Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar
reasonable measure that has no adverse effect on the Trust, the Debenture
Issuer, the Sponsor or the Holders of the Trust Securities ("Ministerial
Action"), the Trust or the Debenture Issuer will pursue such Ministerial
Action in lieu of such dissolution and distribution or redemption.
"Tax Event" means the receipt by the Sponsor of an opinion of
counsel to the effect that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting
taxation, (b) any judicial decision, official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice
or announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or
change in the official position or the interpretation of such
Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative
body, court, governmental authority or regulatory body, irrespective of the
manner in which such amendment, clarification or change is made known,
which amendment, clarification, or change is effective or such
pronouncement or decision is announced, in each case, on or after, the date
of the original issuance of the Debentures (including the enactment of any
legislation and the publication of any judicial decision or regulatory
determination on or after such date), there is more than an insubstantial
risk that (i) the Trust is or will be within 90 days of the date of such
amendment, clarification or change, subject to United States federal income
tax with respect to interest accrued or received on the Debentures, (ii)
the Trust is, or will be within 90 days of the date of such amendment,
clarification or change, subject to more than a de minimis amount of taxes,
duties or other governmental charges, or (iii) interest payable by the
Debenture Issuer to the Trust on the Debentures is not, or within 90 days
of the date of such amendment, clarification or change will not be,
deductible, in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Trust
Securities will be deemed to be no longer outstanding and (ii) any
certificates representing Trust Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on, and having the same record date for
payment as such Trust Securities until such certificates are presented to
the Debenture Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Trust Securities unless all accrued and unpaid Distributions have been paid
on all Trust Securities for all Distribution periods terminating
---------
on or before the date of redemption.
(e) If the Debentures are distributed to holders of the Trust
Securities, the Debenture Issuer will use all reasonable efforts to have
the Debentures listed on the New York Stock Exchange or on such other
exchange as the Securities were listed immediately prior to the
distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Trust Securities (a "Re-
demption/Distribution Notice"), will be given by the Trust by mail to
each Holder of Trust Securities to be redeemed or exchanged not fewer
than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date
fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Trust Securities. Each Redemption/Distribution Notice
shall be addressed to the Holders of Trust Securities at the address
of each such Holder appearing in the books and records of the Trust.
No defect in the Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the validity of
the redemption or exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding Trust
Securities are to be redeemed, the Trust Securities to be redeemed
shall be redeemed Pro Rata from each Holder of Securities. The
particular Securities to be redeemed shall be selected on a Pro Rata
basis not more than 60 days prior to the redemption date by the
Institutional Trustee from the outstanding Securities not previously
called for redemption, by such method as the Institutional Trustee
shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $ or an integral
---
multiple of $___ in excess thereof) of the liquidation preference
amount of Securities of a denomination larger than $ . The
---
Institutional Trustee shall notify the Transfer Agent and Registrar in
writing of the Securities selected for redemption, and in the case of
any Securities selected for partial redemption, the liquidation
preference amount thereof to be redeemed. For all purposes of the
Declaration, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part, or to the
portion of the aggregate liquidation preference amount of Securities
which has been or is to be redeemed.
(iii) If Trust Securities are to be redeemed and the Trust gives
a Redemption/Distribution Notice, then provided that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will pay the relevant Redemption
Price to the holders of such Trust Securities by check mailed to the
address of the relevant Holders appearing on the books and records of
the Trust on the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, if applicable,
then immediately prior to the close of business on the date of such
deposit, or on the redemption date, as applicable, distributions will
cease to accrue on the Trust Securities so called for redemption and
all rights of Holders of such Trust Securities so called for
redemption will cease, except the right of the Holders of such Trust
Securities to receive the Redemption Price, but without interest on
such Redemption Price. Neither the Regular Trustees nor the Trust
shall be required to register or cause to be registered the transfer
of any Trust Securities that have been so called for redemption. If
any date fixed for redemption of Trust Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any
Trust Securities is improperly withheld or refused and not paid either
by the Institutional Trustee or by the Sponsor as guarantor pursuant
to the relevant Guarantee, Distributions on such Trust Securities will
continue to accrue from the original redemption date to the actual
date of payment, in which case the actual payment date will be consid-
ered the date fixed for redemption for purposes of calculating the
Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the
Securities, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided
the acquiror is not the Holder of the Common Securities or the obligor
under the Indenture, the Sponsor or any of its subsidiaries may at any
time and from time to time purchase outstanding Securities by tender,
in the open market or by private agreement.
5. Voting Rights - Securities.
--------------------------
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a majority in aggregate liquidation amount of the
Securities, voting separately as a class, may direct the time, method, and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct
the Institutional Trustee, as holder of the Debentures, to (i) exercise the
remedies available under the Indenture of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii)
waive any past default and its consequences that is waivable under
Section 813 of the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due
and payable. The Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or
the Debenture Trustee as set forth above, the Institutional Trustee shall
not take any action in accordance with the directions of the Holders of the
Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be treated as an
association taxable as a corporation on account of such action. If an
Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date),
then a holder of Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on
the Debentures having a principal amount equal to the aggregate liquidation
amount of the Securities of such holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such
Direct Action, the rights of the holders of the Common Securities Holder
will be subrogated to the rights of such holder of Securities to the extent
of any payment made by the Issuer to such holder of Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders
of Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Securities may be given
at a separate meeting of Holders of Securities convened for such purpose,
at a meeting of all of the Holders of Trust Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at which Holders of Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Securities will be
required for the Trust to redeem and cancel Securities or to distribute the
Debentures in accordance with the Declaration and the terms of the Trust
Securities.
Notwithstanding that Holders of Securities are entitled to vote
or consent under any of the circumstances described above, any of the
Securities that are owned by the Sponsor or any Affiliate of the Sponsor
shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
the Event of Default with respect to the Securities has been cured, waived,
or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under the Declaration, including
(i) directing the time, method, place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii)
waive any past default and its consequences that is waivable under Section
713 of the Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and
payable. Pursuant to this Section 6(c), the Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the
Holders of the Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional
Trustee shall not take any action in accordance with the directions of the
Holders of the Common Securities under this paragraph unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will
not be treated as an association taxable as a corporation on account of
such action. If the Institutional Trustee fails to enforce its rights
under the Declaration, any Holder of Common Securities may institute a
legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice
of any meeting at which Holders of Common Securities are entitled to vote,
or of any matter upon which action by written consent of such Holders is to
be taken, to be mailed to each Holder of record of Common Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will
be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms
of the Trust Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the
Securities in any material respect, whether by way of amendment to the
Declaration or otherwise, or (ii) the dissolution, winding-up or
termination of the Trust, other than as described in Section 8.1 of the
Declaration, then the Holders of outstanding Trust Securities voting
together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of
at least a Majority in liquidation amount of the Trust Securities, affected
thereby, provided, however, that if any amendment or proposal referred to
in clause (i) above would so adversely affect only the Securities or only
the Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of a Majority in liquidation amount
of such class of Trust Securities.
(b) In the event the consent of the Institutional Trustee as
the holder of the Debentures is required under the Indenture with respect
to any amendment, modification or termination on the Indenture or the
Debentures, the Institutional Trustee shall request the written approval of
the Holders of the Trust Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in liquidation amount
of the Trust Securities voting together as a single class; provided,
however, that where a consent under the Indenture would require the consent
of each holder of the Debentures, the Institutional Trustee may only give
such consent with the approval of each Holder of outstanding Trust
Securities; and provided, further, that, the Institutional Trustee shall
not take any action in accordance with the directions of the Holders of the
Trust Securities under this Section 7(b) unless the Institutional Trustee
has obtained an opinion of tax counsel to the effect that for the purposes
of United States federal income tax the Trust will not be treated as an
association taxable as a corporation on account of such action.
8. Pro Rata.
--------
A reference in these terms of the Trust Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata
to each Holder of Trust Securities according to the aggregate liquidation
amount of the Trust Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Trust Securities outstanding
unless, in relation to a payment, an Event of Default under the Declaration
has occurred and is continuing, in which case any funds available to make
such payment shall be paid first to each Holder of the Securities pro rata
according to the aggregate liquidation amount of Securities held by the
relevant Holder relative to the aggregate liquidation amount of all
Securities outstanding, and only after satisfaction of all amounts owed to
the Holders of the Securities, to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by
the relevant Holder relative to the aggregate liquidation amount of all
Common Securities outstanding.
9. Ranking.
-------
The Securities rank pari passu and payment thereon shall be made
Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing, the rights of Holders of the Common Securities
and the rights of the Sponsor or any Affiliate of the Sponsor, to the
extent of their beneficial ownership of Securities, to payment in respect
of Distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights to payment of other Holders of the
Securities.
10. Listing.
-------
The Regular Trustees shall use all reasonable efforts to cause
the Securities to be listed for quotation on the New York Stock Exchange.
11. Acceptance of Guarantee and Indenture.
-------------------------------------
Each Holder of Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Securities Guarantee,
the Common Securities Guarantee and the Indenture, respectively, including
the subordination provisions therein.
12. No Preemptive Rights.
--------------------
The Holders of the Trust Securities shall have no preemptive
rights to subscribe for any additional securities.
13. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written
request to the Sponsor at its principal place of business.
EXHIBIT A-1
EXHIBIT A-1
FORM OF SECURITY CERTIFICATE
This Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Security is exchangeable for Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Security
(other than a transfer of this Security as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary) may be registered except
in limited circumstances.
Unless this Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to
the Trust or its agent for registration of transfer, exchange or payment,
and any Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Securities
CUSIP NO.
-----------
Certificate Evidencing Securities
of
WASHINGTON WATER POWER CAPITAL II
% Securities, Series B
---- ---------
(liquidation amount $ per Security)
---
WASHINGTON WATER POWER CAPITAL II, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that (the "Holder") is the registered owner of
-----------
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the % Securities, Series B
---- ---------
(liquidation amount $ per Security) (the "Securities"). The Securities
---
are transferable on the books and records of the Trust, in person or by a
duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of , 199 , as the same may be amended from time to time (the
------ -
"Declaration"), including the designation of the terms of the Securities as
set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the
Declaration, the Securities Guarantee and the Indenture to a Holder without
charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 199 .
---- ------- -
WASHINGTON WATER POWER CAPITAL II
By:
------------------------------------------
Name:
Title: Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Security will be fixed at a rate
per annum of % (the "Coupon Rate") of the stated liquidation amount of
----
$ per Security, such rate being the rate of interest payable on the
---
Debentures to be held by the Institutional Trustee. Distributions in
arrears for more than one Distribution period will bear interest thereon
compounded at the Coupon Rate (to the extent permitted by
---------
applicable law). The term "Distributions" as used herein includes such
cash distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full
Distribution period on the basis of a 360-day year of twelve
---------
30-day months, and for any period shorter than a full
---------
Distribution period for which Distributions are computed, Distributions
will be computed on the basis of the actual number of days elapsed per
-day Distribution period.
---
Except as otherwise described below, distributions on the
Securities will be cumulative, will accrue from the date of original
issuance and will be payable in arrears, on of each
--------- -----------
year, commencing on , 199 , to , 20 , to holders of
-------- -- - -------- -- --
record on the relevant record dates (as specified in the Declaration) next
preceding such payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period
not exceeding consecutive Distribution periods (each an "Extension
--
Period") and as a consequence of such deferral, Distributions will also be
deferred, provided, however, that no Extension Period shall last beyond the
date of the maturity of the Debentures. Despite such deferral, _________
---------
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded during
---------
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period;
provided, however, that such Extension Period together with all such
previous and further extensions thereof may not exceed consecutive
--
Distribution periods or extend beyond the maturity of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
The Securities shall be redeemable as provided in the
Declaration.
The Declaration and the Securities shall be governed by and
construed in accordance with the laws of the State of Delaware, and all
rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
-------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security
Certificate to:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-------------------------------------------------------------------------
-------------------------------------------------------------------------
------------------------------------------------------------------- agent
to transfer this Security Certificate on the books of the Trust. The agent
may substitute another to act for him or her.
Date:
-------------------
Signature:
---------------
(Sign exactly as your name appears on the other side of this Security
Certificate)
Signature Guarantee*
------------------------------------
-----------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
EXHIBIT A-2
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
WASHINGTON WATER POWER CAPITAL II
% Trust Originated Common Securities, Series B
----
(liquidation amount $ per Common Security)
---
WASHINGTON WATER POWER CAPITAL II, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that The Washington Water Power Company (the "Holder") is the
registered owner of common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the % Trust
----
Originated Common Securities, Series B (liquidation amount $ per Common
---
Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of , 199 , as the same may be amended from
-------- -
time to time (the "Declaration"), including the designation of the terms of
the Common Securities as set forth in Annex I to the Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the
Common Securities Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Common Securities Guarantee and
the Indenture to a Holder without charge upon written request to the
Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 199 .
--- ------------- -
WASHINGTON WATER POWER CAPITAL II
By:
------------------------------------------
Name:
Title: Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a
rate per annum of % (the "Coupon Rate") of the stated liquidation
----
amount of $ per Common Security, such rate being the rate of interest
---
payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears for more than one Distribution period will bear
interest thereon compounded at the Coupon Rate (to the extent
---------
permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds available
therefor. The amount of Distributions payable for any period will be
computed for any full Distribution period on the basis of a
---------
360-day year of twelve 30-day months, and for any period shorter than a
full Distribution period for which Distributions are computed,
---------
Distributions will be computed on the basis of the actual number of days
elapsed per -day Distribution period.
---
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original
issuance and will be payable in arrears, on of each
--------- -----------
year, commencing on , 199 , to , 20 , to Holders of
-------- -- - -------- -- --
record on the relevant record dates (as specified in the Declaration) next
preceding such payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period
not exceeding consecutive Distribution periods (each an "Extension
--
Period") and as a consequence of such deferral, Distributions will also be
deferred; provided, however, that no Extension Period shall last beyond the
date of the maturity of the Debentures. Despite such deferral,
---------
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded during
---------
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period;
provided, however, that such Extension Period together with all such
previous and further extensions thereof may not exceed consecutive
--
Distribution periods or extend beyond the maturity date of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Declaration and the Common Securities shall be governed by
and construed in accordance with the laws of the State of Delaware, and all
rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
------------------------------------------------
-------------------------------------------------------------------------
agent to transfer
-------------------------------------------------------
this Common Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
---------------------
Signature:
---------------
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
Signature Guarantee*:
------------------------------------------------
----------------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as amended.
Exhibit 4(a)-9
========================================================================
AMENDED AND RESTATED DECLARATION
OF TRUST
WASHINGTON WATER POWER CAPITAL III
Dated as of , 199
-------- -
========================================================================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . -2-
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . -8-
SECTION 2.2 Lists of Holders of Trust Securities . . . . . . . -8-
SECTION 2.3 Reports by the Institutional Trustee . . . . . . . -9-
SECTION 2.4 Periodic Reports to Institutional
Trustee . . . . . . . . . . . . . . . . . . . . . . -9-
SECTION 2.5 Evidence of Compliance with Conditions Precedent . -9-
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . -9-
SECTION 2.7 Notice of Event of Default . . . . . . . . . . . -10-
ARTICLE III
ORGANIZATION
SECTION 3.1 Name . . . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.2 Office . . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.3 Purpose . . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.4 Authority . . . . . . . . . . . . . . . . . . . . -11-
SECTION 3.5 Title to Property of the Trust . . . . . . . . . -12-
SECTION 3.6 Powers and Duties of the Regular
Trustees . . . . . . . . . . . . . . . . . . . . -12-
SECTION 3.7 Prohibition of Actions by the Trust and the
Trustees . . . . . . . . . . . . . . . . . . . . -15-
SECTION 3.8 Powers and Duties of the Institutional
Trustee . . . . . . . . . . . . . . . . . . . . . -16-
SECTION 3.9 Certain Duties and Responsibilities. . . . . . . -19-
SECTION 3.10 Certain Rights of Institutional Trustee . . . . . -21-
SECTION 3.11 Delaware Trustee . . . . . . . . . . . . . . . . -24-
SECTION 3.12 Execution of Documents . . . . . . . . . . . . . -25-
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust
Securities . . . . . . . . . . . . . . . . . . . -25-
SECTION 3.14 Duration of Trust . . . . . . . . . . . . . . . . -25-
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . -25-
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities . . . . . -27-
SECTION 4.2 Responsibilities of the Sponsor . . . . . . . . . -28-
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees . . . . . . . . . . . . . . . -28-
SECTION 5.2 Delaware Trustee . . . . . . . . . . . . . . . . -29-
SECTION 5.3 Institutional Trustee; Eligibility . . . . . . . -29-
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally . . . . . . . . . . . -30-
SECTION 5.5 Regular Trustees . . . . . . . . . . . . . . . . -31-
SECTION 5.6 Delaware Trustee. . . . . . . . . . . . . . . . . -31-
SECTION 5.7 Appointment, Removal and Resignation of Trustees. -31-
SECTION 5.8 Vacancies among Trustees . . . . . . . . . . . . -33-
SECTION 5.9 Effect of Vacancies . . . . . . . . . . . . . . . -33-
SECTION 5.10 Meetings. . . . . . . . . . . . . . . . . . . . . -33-
SECTION 5.11 Delegation of Power . . . . . . . . . . . . . . . -34-
Section 5.12 Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . -34-
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions . . . . . . . . . . . . . . . . . . -35-
ARTICLE VII
ISSUANCE OF TRUST SECURITIES
SECTION 7.1 General Provisions Regarding Trust Securities . . -35-
SECTION 7.2 Paying Agent . . . . . . . . . . . . . . . . . . -36-
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust . . . . . . . . . . . . . . -37-
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Trust Securities . . . . . . . . . . -38-
SECTION 9.2 Transfer of Certificates . . . . . . . . . . . . -39-
SECTION 9.3 Deemed Trust Security Holders . . . . . . . . . . -39-
SECTION 9.4 Security Certificates . . . . . . . . . . . . . . -40-
SECTION 9.5 Mutilated, Destroyed, Lost or Stolen Certificates -40-
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF Trust SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability . . . . . . . . . . . . . . . . . . . . -41-
SECTION 10.2 Exculpation . . . . . . . . . . . . . . . . . . . -41-
SECTION 10.3 Fiduciary Duty . . . . . . . . . . . . . . . . . -42-
SECTION 10.4 Indemnification . . . . . . . . . . . . . . . . . -43-
SECTION 10.5 Outside Businesses . . . . . . . . . . . . . . . -46-
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year . . . . . . . . . . . . . . . . . . . -47-
SECTION 11.2 Certain Accounting Matters . . . . . . . . . . . -47-
SECTION 11.3 Banking . . . . . . . . . . . . . . . . . . . . . -48-
SECTION 11.4 Withholding . . . . . . . . . . . . . . . . . . . -48-
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments . . . . . . . . . . . . . . . . . . . -49-
SECTION 12.2 Meetings of the Holders of Trust Securities;
Action by Written Consent . . . . . . . . . . . . -51-
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional
Trustee . . . . . . . . . . . . . . . . . . . . . -53-
SECTION 13.2 Representations and Warranties of Delaware
Trustee . . . . . . . . . . . . . . . . . . . . . -54-
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices. . . . . . . . . . . . . . . . . . . . . -54-
SECTION 14.2 Governing Law . . . . . . . . . . . . . . . . . . -56-
SECTION 14.3 Intention of the Parties . . . . . . . . . . . . -56-
SECTION 14.4 Headings . . . . . . . . . . . . . . . . . . . . -56-
SECTION 14.5 Successors and Assigns . . . . . . . . . . . . . -56-
SECTION 14.6 Partial Enforceability . . . . . . . . . . . . . -56-
SECTION 14.7 Counterparts . . . . . . . . . . . . . . . . . . -57-
ANNEX I TERMS OF TRUST SECURITIES . . . . . . . . . . . . . . . I-1
EXHIBIT A-1 FORM OF SECURITY CERTIFICATE . . . . . . . . . . . . . A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE . . . . . . . . . A2-1
CROSS-REFERENCE TABLE*
----------------------
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
------------------- -----------
310(a) . . . . . . . . . . . . . . . . . . 5.3(a)
310(b) . . . . . . . . . . . . . . . . . . 5.3(c)
310(c) . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . 1.1 (Definition
of Officer's Certificate)
314(f) . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . 3.9(a)
315(b) . . . . . . . . . . . . . . . . . . 2.7
315(c) . . . . . . . . . . . . . . . . . . 3.9(b)
315(d) . . . . . . . . . . . . . . . . . . 3.9(c)
316(a) . . . . . . . . . . . . . . . . . . 2.6; Annex I,
Section 5
316(c) . . . . . . . . . . . . . . . . . . 3.6(e)
317(a) . . . . . . . . . . . . . . . . . . 3.8(h)
317(b) . . . . . . . . . . . . . . . . . . 3.8(i)
318 . . . . . . . . . . . . . . . . . . . . 2.1
---------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
WASHINGTON WATER POWER CAPITAL III
, 199
--------- -
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated
and effective as of , 199 , by the Trustees (as defined herein),
--------- -
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established Washington
Water Power Capital III (the "Trust"), a trust under the Delaware Business
Trust Act pursuant to a Declaration of Trust dated as of November 4, 1996
(the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on November 4, 1996, for the
sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have
been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the
Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and
that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will
be held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
-----------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes
and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
---------
405 of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
-----
"Authorized Officer" of a Person means any Person that is
------------------
authorized to legally bind such Person.
"Business Day" means any day other than Saturday, Sunday or any
------------
other day on which banking institutions in the City of Wilmington, Delaware
and The City of New York are authorized or required by any applicable law
to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to
------------ -- ---
time, or any successor legislation.
"Certificate" means a Common Security Certificate or a Security
-----------
Certificate.
"Closing Date" means the "Closing Time" and each "Date of
------------
Delivery" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
----
time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
----------
"Common Securities" has the meaning specified in Section 7.1.(a).
-----------------
"Common Securities Guarantee" means the guarantee agreement to be
---------------------------
dated as of ________, 199_ of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a certificate in fully
---------------------------
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b)
--------------------------
any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of
any Regular Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Institutional
----------------------
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at
the date of execution of this Agreement is located at Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii)
the Trust's Affiliates; and (b) any Holder of Trust Securities.
"Debenture Issuer" means The Washington Water Power Company, a
----------------
Washington corporation, or any successor entity resulting from any
consolidation, amalgamation, merger or other business combination, in its
capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a Delaware
-----------------
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
----------
Debenture Issuer under the Indenture to be held by the Institutional
Trustee.
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Depositary" has the meaning set forth in Section 9.1.
----------
"Distribution" means a distribution payable to Holders of Trust
------------
Securities in accordance with Section 6.1.
"Event of Default", in respect of the Trust Securities, means an
----------------
Event of Default as defined in the Indenture, so long as the same shall be
continuing under the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
----------------------------
Section 10.4(b).
"Guarantees" means the Common Securities Guarantee and the
----------
Securities Guarantee.
"Holder" means a Person in whose name a Certificate representing
------
a Trust Security is registered, such Person being a beneficial owner within
the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
------------------
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of _______ 1, 199_,
---------
between the Debenture Issuer and the Debenture Trustee, as supplemented.
"Institutional Trustee" has the meaning set forth in Section 5.3.
---------------------
"Institutional Trustee Account" has the meaning set forth in
-----------------------------
Section 3.8(c)(i).
"Investment Company" means an investment company as defined in
------------------
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
----------------------
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"Majority in liquidation amount of the Trust Securities" means,
------------------------------------------------------
except as provided in the terms of the Securities or by the Trust Indenture
Act, Holder(s) of outstanding Trust Securities voting together as a single
class or, as the context may require, Holders of outstanding Securities or
Holders of outstanding Common Securities voting separately as a class, who
are the record owners of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) of all outstanding Trust Securities
of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of
------------------
the Trust Securities as set forth in Annex I.
"Officer's Certificate" means, with respect to any Person, a
---------------------
certificate signed by an Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement of the nature and scope of the examination or
investigation upon which the statements contained in such Officer's
Certificate are based;
(c) a statement that, in the opinion of such officer, such officer
has made such examination or investigation as is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
------------
"Person" means a legal person, including any individual,
------
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Quorum" means a majority of the Regular Trustees or, if there
------
are only two Regular Trustees, both of them.
"Registrar" means the registrar for the Securities appointed by
---------
the Trust and shall initially be Wilmington Trust Company.
"Regular Trustee" has the meaning set forth in Section 5.1.
---------------
"Related Party" means, with respect to the Sponsor, any direct or
-------------
indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of
the Sponsor.
"Responsible Officer" means, with respect to the Institutional
-------------------
Trustee, any officer of the Institutional Trustee assigned by the
Institutional Trustee to administer its corporate trust matters.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or
---------
any successor rule or regulation.
"Securities" has the meaning specified in Section 7.1(a).
----------
"Securities Act" means the Securities Act of 1933, as amended
--------------
from time to time, or any successor legislation.
"Security Certificate" means a certificate representing a
--------------------
Security substantially in the form of Exhibit A-1.
"Securities Guarantee" means the guarantee agreement to be dated
--------------------
as of ________, 199_, of the Sponsor in respect of the Securities.
"Sponsor" means The Washington Water Power Company, a Washington
-------
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as
sponsor of the Trust.
"Tax Event" has the meaning set forth in Annex I hereto.
---------
"10% in liquidation amount of the Trust Securities" means, except
-------------------------------------------------
as provided in the terms of the Securities or by the Trust Indenture Act,
Holder(s) of outstanding Trust Securities voting together as a single class
or, as the context may require, Holders of outstanding Securities or
Holders of outstanding Common Securities voting separately as a class, who
are the record owners of 10% or more of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) of all outstanding Trust Securities
of the relevant class.
"Transfer Agent" means the transfer agent for the Securities
--------------
appointed by the Trust and shall initially be Wilmington Trust Company.
"Treasury Regulations" means the income tax regulations,
--------------------
including temporary and proposed regulations, promulgated under the Code by
the United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee
or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended from time to time, or any successor legislation.
"Trust Property" means (i) the Debentures, (ii) any cash or
--------------
deposit in, or owing to, the Institutional Trustee Account and (iii) all
proceeds and rights in respect of the foregoing and any other property and
assets for the time being held by the Institutional Trustee pursuant to the
trusts of this Declaration.
"Trust Securities" means the Common Securities and the
----------------
Securities.
"Underwriting Agreement" means the Underwriting Agreement for the
----------------------
offering and sale of Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall,
to the extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is
a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
SECTION 2.2 Lists of Holders of Trust Securities.
------------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Institutional Trustee (i) within 14 days after
each record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of
the Holders of the Trust Securities ("List of Holders") as of such record
date; provided, however, that neither the Sponsor nor the Regular Trustees
on behalf of the Trust shall be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most recent List
of Holders given to the Institutional Trustee by the Sponsor and the
Regular Trustees on behalf of the Trust; and provided, further, that in any
event such List of Holders will be provided to the Institutional Trustee
not less than once every 6 months pursuant to this Section 2.2(a)(i), and
(ii) at any other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days before such
List of Holders is given to the Institutional Trustee. The Institutional
Trustee shall preserve, in as current a form as is reasonably practicable,
all information contained in Lists of Holders given to it or which it
receives in the capacity as Paying Agent (if acting in such capacity)
provided, however, that the Institutional Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
------------------------------------
Within 60 days after May 15 of each year, the Institutional
Trustee shall provide to the Holders of the Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act.
The Institutional Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
-----------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such documents, reports
and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Declaration that relate to any of the matters set forth in Section 314(c)
of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the
form of an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of
Securities may, by vote, on behalf of the Holders of all of the Securities,
waive any past Event of Default in respect of the Securities and its
consequences; provided, however, that if the underlying Event of Default
under the Indenture is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable.
Upon such waiver, any such default shall cease to exist, and any
Event of Default with respect to the Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Securities or impair any right consequent
thereon. Any waiver by the Holders of the Securities of an Event of
Default with respect to the Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Event of Default
with respect to the Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of the Common
Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the
Common Securities and its consequences; provided, however, that if the
underlying Event of Default under the Indenture is not waivable under the
Indenture, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided below
in this Section 2.6(b), the Event of Default under the Declaration shall
also not be waivable; and
provided, further, that, each Holder of Common Securities will be deemed to
have waived any such Event of Default and all Events of Default with
respect to the Common Securities and its consequences until all Events of
Default with respect to the Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the Holders of the Securities and only the Holders of
the Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Trust Securities. Subject to the
foregoing provisions of this Section 2.6(b), upon such waiver, any such
default shall cease to exist and any Event of Default with respect to the
Common Securities arising therefrom shall be deemed to have been cured for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Securities
shall constitute a waiver of the corresponding Event of Default under this
Declaration.
SECTION 2.7 Notice of Event of Default.
--------------------------
The Institutional Trustee shall give notice of any default
hereunder to the Holders of Trust Securities in the manner and to the
extent required to do so by the Trust Indenture Act, unless such default
shall have been cured or waived; provided, however, that in the case of any
default hereunder arising out of a default of the character specified in
Section 701(c) of the Indenture, no such notice to Holders shall be given
until at least seventy-five (75) days after the occurrence thereof; and
provided, further, that, subject to the provisions of Section 3.9, the
Institutional Trustee shall not be deemed to have knowledge of such default
unless either (i) a Responsible Officer of the Institutional Trustee shall
have actual knowledge of such default or (ii) the Institutional Trustee
shall have received written notice thereof from the Debenture Issuer, the
Sponsor, any Regular Trustee or any Holder. For the purpose of this
Section, the term "default" means any event which is, or after notice or
lapse of time, or both, would become, an Event of Default.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust is named "Washington Water Power Capital III," as such
name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by
the Regular Trustees.
SECTION 3.2 Office.
------
The address of the principal office of the Trust is c/o The
Washington Water Power Company, 1411 East Mission Avenue, Spokane,
Washington 99202. On ten Business Days' written notice to the Holders of
Trust Securities, the Regular Trustees may designate another principal
office.
SECTION 3.3 Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale to
acquire the Debentures, and (b) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to
be undertaken) any activity that would cause the Trust to be treated for
United States federal income tax purposes as an association taxable as a
corporation.
SECTION 3.4 Authority.
---------
Subject to the limitations provided in this Declaration and to
the specific duties of the Institutional Trustee, the Regular Trustees
shall have exclusive and complete authority to carry out the purposes of
the Trust. An action taken by the Regular Trustees in accordance with
their powers shall constitute the act of and serve to bind the Trust and an
action taken by the Institutional Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind
the Trust. In dealing with the Trustees acting on behalf of the Trust, no
person shall be required to inquire into the authority of the Trustees to
bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Debentures
and the Institutional Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of
the Trust, but shall have an undivided beneficial interest in the assets of
the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
-----------------------------------------
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities and the Common Securities
in accordance with this Declaration; provided, however, that, the Trust may
issue no more than one series of Securities and no more than one series of
Common Securities and, provided further, that there shall be no interests
in the Trust other than the Trust Securities, and the issuance of Trust
Securities shall be limited to a simultaneous issuance of both Securities
and Common Securities on each Closing Date;
(b) in connection with the issuance and sale of the Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Securities in any state in
which the Sponsor has determined to qualify or register such
Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to The New York Stock Exchange, Inc. or any other national stock
exchange or the Nasdaq Stock Market's National Market for listing upon
notice of issuance of any Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Securities under
Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement providing
for the sale of the Securities;
(c) to acquire the Debentures with the proceeds of the sale of
the Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause the Debentures to be registered in the name of
the Institutional Trustee as a Trustee hereunder;
(d) to give the Sponsor and the Institutional Trustee prompt
written notice of the occurrence of a Tax Event; provided, however, that
the Regular Trustees shall consult with the Sponsor and the Institutional
Trustee before taking or refraining from taking any Ministerial Action in
relation to a Tax Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and
with respect to, for the purposes of 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Securities and Holders of Common
Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of the Trust
Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against
the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by 314(a)(4) of
the Trust Indenture Act to the Institutional Trustee, which certificate may
be executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar
and Transfer Agent for the Securities or to appoint a Paying Agent for the
Trust Securities as provided in Section 7.2;
(m) to give prompt written notice to the Holders of the Trust
Securities of any notice received from the Debenture Issuer of its election
to defer payments of interest on the Debentures by extending the interest
payment period under the Indenture;
(n) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the
laws of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust not to be treated for United States
federal income tax purposes as an association taxable as a
corporation; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes;
provided, however, that such action does not materially and adversely
affect the interests of Holders; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular Trustees,
on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none
of the powers or the authority of the Institutional Trustee set forth in
Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
The Trust shall not, and the Trustees (including the
Institutional Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall
not and the Trustees (including the Institutional Trustee) shall cause the
Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Trust
Securities pursuant to the terms of this Declaration and of the Trust
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Trust Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Trust Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures,
(B) waive any past default that is waivable under the Indenture, (C)
exercise any right to rescind or annul any declaration that the
principal of all the Debentures shall be immediately due and payable,
or (D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required
unless the Trust shall have received an opinion of counsel to the
effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes
the Trust will be treated as an association taxable as a corporation.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
----------------------------------------------
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Institutional Trustee in trust for the
benefit of the Holders of the Trust Securities. The right, title and
interest of the Institutional Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as
Institutional Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right,
title and interest in the Debentures to the Regular Trustees or to the
Delaware Trustee (it being understood, however, that the entity acting as
Institutional Trustee may also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name of and
under the exclusive control of the Institutional Trustee on behalf of
the Holders of the Trust Securities and, upon the receipt of payments
of funds made in respect of the Debentures held by the Institutional
Trustee, deposit such funds into the Institutional Trustee Account and
make payments to the Holders of the Trust Securities from the
Institutional Trustee Account in accordance with Section 6.1. Funds
in the Institutional Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Institutional
Trustee Account shall be an account that is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Securities by a nationally
recognized statistical rating organization, within the meaning of Rule
436(g)(2) under the Securities Act or any successor rule or
regulation;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Securities and the
Common Securities to the extent the Debentures are redeemed or mature;
and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Trust Securities, engage
in such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of Trust
Securities upon the occurrence of certain special events (as may be
defined in the terms of the Trust Securities) arising from a change in
law or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Trust Securities.
(d) The Institutional Trustee shall take all actions and
perform all duties that may be specifically required of the Institutional
Trustee pursuant to the terms of the Trust Securities.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration
or the Trust Indenture Act, and if such Institutional Trustee shall have
failed to take such Legal Action, the Holders of the Securities may take
such Legal Action, to the same extent as if such Holders of Securities held
a principal amount of Debentures equal to the liquidation amount of such
Securities, without first proceeding against the Institutional Trustee or
the Trust; provided, however, that if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on the date
such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Securities may
directly institute a proceeding for enforcement of payment to such Holder
of the principal of or interest on the Debentures having a principal amount
equal to the aggregate liquidation amount of the Securities of such Holder
(a "Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the
Holders of the Common Securities will be subrogated to the rights of such
Holder of Securities to the extent of any payment made by the Issuer to
such Holder of Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee
unless either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Trust Securities
pursuant to the terms of the Trust Securities; or
(ii) a Successor Institutional Trustee has been appointed and
has accepted that appointment in accordance with Section 5.7.
(g) The Institutional Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Institutional Trustee occurs and is continuing,
the Institutional Trustee shall, for the benefit of Holders of the Trust
Securities, enforce its rights as holder of the Debentures subject to the
rights of the Holders pursuant to the terms of such Trust Securities.
(h) The Institutional Trustee shall be authorized to undertake
all actions set forth in Section 317(a) of the Trust Indenture Act.
(i) The Institutional Trustee may, with the consent of the
Regular Trustees, authorize one or more Persons (each, a "Paying Agent") to
pay Distributions, redemption payments or liquidation payments on behalf of
the Trust with respect to all Trust Securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any Paying
Agent may be removed by the Institutional Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at
any time by the Institutional Trustee.
(j) Subject to this Section 3.8, the Institutional Trustee
shall have none of the duties, liabilities, powers or the authority of the
Regular Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Institutional
Trustee shall not take any action that is inconsistent with the purposes
and functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities.
-----------------------------------
(a) The Institutional Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and in the terms of the Trust
Securities and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived), the Institutional Trustee
shall exercise such of the rights and powers vesting in it by this
Declaration, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Institutional Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Institutional
Trustee shall be determined solely by the express provisions of
this Declaration and in the terms of the Trust Securities, and
the Institutional Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Declaration, and no implied covenants or
obligations shall be read into this Declaration against the
Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; provided, however, that in the
case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform
to the requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the
Institutional Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Institutional Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of at least a Majority in
liquidation amount of the outstanding Trust Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee or exercising any trust or
power conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require any of the
Trustees 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;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Trust Property
shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to
the Institutional Trustee under this Declaration, the Trust Indenture
Act and, to the extent applicable, Rule 3a-7 under the Investment
Company Act;
(vi) the Institutional Trustee shall have no duty or liability
for, or with respect to the value, genuineness, existence or
sufficiency of, the Trust Property or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account established by the Institutional Trustee
pursuant to this Declaration and except to the extent otherwise
required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for the default or misconduct of the
Regular Trustees or the Sponsor.
(c) All payments made by the Institutional Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the income
and proceeds from the Trust Property to enable the Institutional Trustee or
Paying Agent to make payments in accordance with the terms hereof. Each
Holder, by its acceptance of a Trust Security, agrees that it will look
solely to the income and proceeds from the Trust Property to the extent
available for distribution to it as herein provided and that the Trustees
are not personally liable to it for any amount distributable in respect of
any Trust Security or for any other liability in respect of any Trust
Security. This Section 3.9(c) does not limit the liability of the Trustees
expressly set forth elsewhere in this Declaration or, in the case of the
Institutional Trustee, in the Trust Indenture Act.
(d) No Regular Trustee shall be liable for any act or omission
to act hereunder, except for its own gross negligence or wilful misconduct.
SECTION 3.10 Certain Rights of Institutional Trustee.
---------------------------------------
Subject to the provisions of Section 3.9 and to the applicable
provisions of the Trust Indenture Act:
(a) the Institutional Trustee may rely and shall be protected
in acting or refraining from acting in good faith upon any resolution,
opinion of counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, appraisal, 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) if (A) in performing its duties under this Declaration the
Institutional Trustee is required to decide between alternative
courses of action or (B) in construing any of the provisions in this
Declaration the Institutional Trustee finds the same ambiguous or
inconsistent with any other provisions contained herein or (C) the
Institutional Trustee is unsure of the application of any provision of
this Declaration, then, except as to any matter as to which the
Holders of Securities are entitled to vote under the terms of this
Declaration, the Institutional Trustee shall deliver a notice to the
Sponsor requesting written instructions of the Sponsor as to the
course of action to be taken. The Institutional Trustee shall take
such action, or refrain from taking such action, as the Institutional
Trustee shall be instructed in writing to take, or to refrain from
taking, by the Sponsor; provided, however, that if the Institutional
Trustee does not receive such instructions of the Sponsor within 10
Business Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which to the extent
practicable shall not be less than 2 Business Days), it may, but shall
be under no duty to, take or refrain from taking such action not
inconsistent with this Declaration as it shall deem advisable and in
the best interests of the Holders, in which event the Institutional
Trustee shall have no liability except for its own bad faith,
negligence or wilful misconduct;
(c) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Institutional Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officer's Certificate;
(d) the Institutional Trustee may consult with counsel of its
selection, 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 Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any of the Holders pursuant to this
Declaration, unless such Holders shall have offered to the
Institutional Trustee reasonable security or indemnity against the
costs, expenses (including reasonable attorneys' fees and expenses)
and liabilities which might be incurred by it in complying with such
request or direction;
(f) the Institutional 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, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine, unless requested in writing to do so by
one or more Holders, but the Institutional Trustee, in its discretion,
may make such further inquiry or investigation into such facts or
matters as it may see fit;
(g) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Institutional 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;
provided, however, that the Institutional Trustee shall be responsible
for its own negligence or recklessness with respect to selection of
any agent or attorney appointed by it hereunder;
(h) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration;
(i) the Institutional Trustee shall not be charged with
knowledge of any default or Event of Default with respect to the Trust
Securities unless either (A) a Responsible Officer of the
Institutional Trustee shall have actual knowledge of the default or
Event of Default or (B) written notice of such default or Event of
Default shall have been given to the Institutional Trustee by the
Sponsor, the Regular Trustees or any Holder;
(j) no provision of this Declaration shall be deemed to impose
any duty or obligation on the Institutional 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 Institutional 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; and no permissive
or discretionary power or authority available to the Institutional
Trustee shall be construed to be a duty;
(k) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Institutional Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured to
it under the terms of this Declaration or adequate indemnity against
such risk or liability is not reasonably assured to it;
(l) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any securities) (or any
rerecording, refiling or reregistration thereof);
(m) the Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction; and
(n) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Institutional Trustee (A) may request
instructions from the Holders, which instructions may only be given by
the Holders of the same amount of the Trust Securities as would be
entitled to direct the Institutional Trustee under the terms of this
Declaration in respect of such remedies, rights or actions, (B) may
refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Institutional Trustee
described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
----------------------
Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act, a majority of or, if there
are only two, any Regular Trustee or, if there is only one, such Regular
Trustee is authorized to execute on behalf of the Trust any documents that
the Regular Trustees have the power and authority to execute pursuant to
Section 3.6; provided that, the registration statement referred to in
-------- ----
Section 3.6(b)(i), including any amendments thereto, shall be signed by all
of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust
-------------------------------------------------
Securities.
----------
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not
assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust
or any part thereof. The Trustees make no representations as to the
validity or sufficiency of this Declaration or the Trust Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence for forty-five (45) years from
the Closing Date.
SECTION 3.15 Mergers.
-------
(a) The Trust may not merge, consolidate or amalgamate with or
into, or enter into any other business combination with, or be replaced by,
or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other body, except as described in Section
3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees and without
the consent of the Holders of the Trust Securities, the Delaware Trustee or
the Institutional Trustee, merge, consolidate or amalgamate with or into,
or enter into any other business combination with, or be replaced by, or
convey, transfer or lease its properties and assets substantially as an
entirety to, a trust organized as such under the laws of any state;
provided, however, that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Trust Securities; or
(B) substitutes for the Trust Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities rank
the same as the Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly appoints a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Securities or any Successor Securities are listed, or
any Successor Securities will be listed upon notification of issuance,
on any national securities exchange or with another organization on
which the Securities are then listed or quoted, if any;
(iv) such merger, consolidation, amalgamation, other business
combination, replacement, conveyance, transfer or lease does not cause
the Securities (including any Successor Securities) to be downgraded
by any nationally recognized statistical rating organization within
the meaning of Rule 436(g)(12) under the Securities Act or any
successor rule or regulation;
(v) such merger, consolidation, amalgamation, other business
combination, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders
of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of such
Holders' interests in the Securities as a result of such merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation, other
business combination, replacement, conveyance, transfer or lease, the
Sponsor has received an opinion of counsel to the effect that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the Trust
Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders'
interest in the new entity);
(B) following such merger, consolidation, amalgamation,
other business combination, replacement, conveyance, transfer or
lease, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation,
other business combination, replacement, conveyance, transfer or
lease the Trust (or the Successor Entity) will continue not to be
treated as an association taxable as a corporation for United
States federal income tax purposes; and
(viii) the Sponsor or any permitted successor guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Trust
Securities, merge, consolidate or amalgamate with or into, enter into any
other business combination with or be replaced by, or convey, transfer or
lease its properties and assets substantially as an entirety to, any other
entity or permit any other entity to merge, consolidate or amalgamate,
merge with or into, enter into any other business combination with or
replace it if such merger, consolidation, amalgamation, other business
combination, replacement, conveyance, transfer or lease would cause the
Trust or Successor Entity to be treated as an association taxable as a
corporation for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issuance and sale of the Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission
a registration statement on Form S-3 in relation to the Securities,
including any amendments thereto;
(b) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Securities
and to do any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and
filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such states;
(c) to prepare for filing by the Trust an application to
the New York Stock Exchange or any other national stock exchange or
the Nasdaq National Market for listing upon notice of issuance of any
Securities;
(d) to prepare for filing by the Trust with the Commission
a registration statement on Form 8-A relating to the registration of
the Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement
providing for the sale of the Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
------------------
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Trust Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities; provided,
however, that the number of Trustees shall in no event be less than
two (2); and provided, further, that, (1) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the
Sponsor (a "Regular Trustee"); (2) one Trustee shall be the
Institutional Trustee for so long as this Declaration is required to
qualify as an indenture under the Trust Indenture Act, and such
Trustee may also serve as Delaware Trustee if it meets the applicable
requirements; and (3) there shall be a Delaware Trustee to the extent
required under Section 5.2.
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the state of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law;
provided, however, that if the Institutional Trustee has its principal
place of business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Institutional Trustee may also be
the Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
----------------------------------
(a) There shall at all times be one Trustee which shall act as
"Institutional Trustee" which shall be:
(i) not an Affiliate of the Sponsor; and
(ii) a corporation organized and doing business under the laws
of the United States, any state or territory thereof or the District
of Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least Fifty
Million Dollars ($50,000,000) and subject to supervision or
examination by federal, state, territorial or District of Columbia
authority, or
(iii)if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least Fifty Million Dollars
($50,000,000) or the United States Dollar equivalent of the applicable
foreign currency and subject to supervision or examination by
authority of such foreign government or a political subdivision
thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,
and, in either case, qualified and eligible under this Article and the
Trust Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of such supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of
the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
(d) The Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be:
Wilmington Trust Company.
SECTION 5.4 Certain Qualifications of Regular Trustees and Delaware
-------------------------------------------------------
Trustee Generally.
-----------------
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that shall
act through one or more Authorized Officers.
SECTION 5.5 Regular Trustees.
----------------
The initial Regular Trustees shall be:
Lawrence J. Pierce
Dorothy K. Mercer.
(a) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any
matter over which the Regular Trustees have power to act, any power of the
Regular Trustees may be exercised by, or with the consent of, any one such
Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable law,
any Regular Trustee is authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power and authority to cause
the Trust to execute pursuant to Section 3.6, provided, however, that the
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by all of the Regular Trustees.
(c) A Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Regular
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 5.6 Delaware Trustee.
-----------------
The initial Delaware Trustee shall be:
Wilmington Trust Company.
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
-------------------------------------------------
(a) Subject to Section 5.7(b), Trustees may be appointed or
removed without cause at any time except during an Event of Default:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities.
(b) (i) The Institutional Trustee shall not be removed in
accordance with Section 5.7(a) until a Successor Institutional Trustee has
been appointed and has accepted such appointment by written instrument
executed by such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Delaware Trustee shall not be removed in
accordance with this Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee
and delivered to the Sponsor and the Trust, which resignation shall take
effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) no such resignation of the Institutional Trustee shall be
effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered to
the Trust, the Sponsor and the resigning Institutional Trustee;
or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Trust Securities; and
(ii) no such resignation of the Delaware Trustee shall be
effective until a Successor Delaware Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use all
reasonable efforts to promptly appoint a Successor Delaware Trustee or
Successor Institutional Trustee as the case may be if the Institutional
Trustee or the Delaware Trustee delivers an instrument of resignation in
accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in
this Section 5.7 within 60 days after delivery of an instrument of
resignation or removal, the Institutional Trustee or Delaware Trustee
resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Institutional Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper and prescribe, appoint a
Successor Institutional Trustee or Successor Delaware Trustee, as the case
may be.
(f) No Institutional Trustee or Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Institutional
Trustee or Successor Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number
of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees
or, if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties
of a Trustee shall not operate to annul the Trust. Whenever a vacancy in
the number of Regular Trustees shall occur, until such vacancy is filled by
the appointment of Regular Trustee in accordance with Section 5.7, the
Regular Trustees in office, regardless of their number, shall have all the
powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
SECTION 5.10 Meetings.
--------
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any
Regular Trustee. Regular meetings of the Regular Trustees may be held at a
time and place fixed by resolution of the Regular Trustees. Notice of any
in-person meetings of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Regular Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours
before a meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Regular Trustee at a meeting shall constitute
a waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees.
In the event there is only one Regular Trustee, any and all action of such
Regular Trustee shall be evidenced by a written consent of such Regular
Trustee.
SECTION 5.11 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of
21 his or her power for the purpose of executing any documents contemplated
in Section 3.6, including any registration statement or amendment thereto
filed with the Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as
set forth herein.
Section 5.12 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any corporation into which the Institutional Trustee or the
Delaware Trustee, as the case may be, may be merged or converted or with
which either may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of the Institutional Trustee or the Delaware Trustee, as the case
may be, shall be the successor of the Institutional Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the Trust Securities.
Distributions shall be made on the Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If
and to the extent that the Debenture Issuer makes a payment of interest
(including Compounded Interest (as defined in the Indenture) and Additional
Interest (as defined in the Indenture)), premium and/or principal on the
Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Trust Securities.
---------------------------------------------
(a) The Regular Trustees shall on behalf of the Trust issue one
class of securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are
set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust
by a Regular Trustee. Such signature shall be the manual or facsimile
signature of any present or any future Regular Trustee. In case any
Regular Trustee of the Trust who shall have signed any of the Trust
Securities shall cease to be such Regular Trustee before the Certificates
so signed shall be delivered by the Trust, such Certificates nevertheless
may be delivered as though the person who signed such Certificates had not
ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of
such Trust Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation of any stock exchange on which Trust
Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of
the Trust Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Trust Securities as provided in this
Declaration and the receipt of the consideration to be received therefor,
the Trust Securities so issued shall be deemed to be validly issued, fully
paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
SECTION 7.2 Paying Agent.
------------
The Trust shall appoint a paying agent (the "Paying Agent") and
may appoint one or more additional paying agents in such other locations as
it shall determine. The term "Paying Agent" includes any additional paying
agent. The Trust may change any Paying Agent without prior notice to any
Holder. The Trust shall notify the Institutional Trustee of the name and
address of any Agent not a party to this Declaration. If the Trust fails
to appoint or maintain another entity as Paying Agent, the Institutional
Trustee shall act as such. The Trust or any of its Affiliates may act as
Paying Agent. Wilmington Trust Company shall initially act as Paying Agent
for the Securities and the Common Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
--------------------
(a) The Trust shall terminate:
(i) upon the occurrence of an Event of Default described in
clause (d) or (e) of Section 701 of the Indenture;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the filing of a certificate of
cancellation with respect to the Trust after having obtained the
consent of a majority in liquidation amount of the Trust Securities
voting together as a single class to file such certificate of
cancellation; or the revocation of the Sponsor's charter and the
expiration of 90 days after the date of revocation without a
reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Trust Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Trust
Securities;
(v) upon the occurrence and continuation of a Tax Event in
connection with which the Trust shall have been dissolved in
accordance with the terms of the Trust Securities and all of the
Debentures endorsed thereon shall have been distributed to the Holders
of Securities in exchange for all of the Trust Securities; or
(vi) before the issuance of any Trust Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive
the termination of the Trust except as contemplated in Section 1005 of the
Indenture.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Trust Securities.
----------------------------
(a) Trust Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Trust Securities. Any transfer or
purported transfer of any Trust Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article IX, Securities shall be freely
transferable.
(c) The Securities are to be initially registered in the name
of Cede & Co., as nominee for The Depository Trust Company (the
"Depositary") and the Security Certificates so initially registered shall
bear such legends as required by the Depositary. Such Securities shall not
be transferable or exchangeable, nor shall any purported transfer be
registered, except as follows:
(i) such Securities may be transferred in whole, and
appropriate registration of transfer effected, if such transfer is by
such nominee to the Depositary, or by the Depositary to another
nominee thereof, or by any nominee of the Depositary to any other
nominee thereof, or by the Depositary or any nominee thereof to any
successor securities depositary or any nominee thereof; and
(ii) such Securities shall be exchanged for Securities
Certificates registered in the respective names of the beneficial
holders thereof, and thereafter shall be transferable without
restriction, if:
(A) the Depositary, or any successor securities depositary,
shall have notified the Company and the Institutional Trustee that it
is unwilling or unable to continue to act as securities depositary
with respect to such Securities and the Institutional Trustee shall
not have been notified by the Company within ninety (90) days of the
identity of a successor securities depositary with respect to such
Securities;
(B) the Company shall have delivered to the Institutional
Trustee an Officer's Certificate to the effect that such Securities
shall be so exchangeable on and after a date specified therein; or
(C) (1) an Event of Default shall have occurred and be
continuing, (2) the Institutional Trustee shall have given notice of
such Event of Default pursuant to Section 2.7 of this Declaration and
(3) there shall have been delivered to the Company and the
Institutional Trustee an opinion of counsel to the effect that the
interests of the beneficial owners of such Securities in respect
thereof will be materially impaired unless such owners become Holders
of Securities Certificates.
(d) The Sponsor shall maintain 100% direct ownership of the
Common Securities by the Sponsor or any Affiliate thereof, except as
otherwise provided in Section 1005 of the Indenture.
SECTION 9.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected
without charge but only upon payment (with such indemnity as the Regular
Trustees may reasonably require) in respect of any documentary stamp tax or
other similar governmental charges that may be imposed in relation to it.
Upon surrender for registration of transfer of any Certificate, the Regular
Trustees shall cause one or more new Certificates to be issued in the name
of the designated transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a written instrument
of transfer in form satisfactory to the Regular Trustees duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to
the rights and be subject to the obligations of a Holder hereunder upon the
receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 9.3 Deemed Trust Security Holders.
-----------------------------
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole
holder of such Certificate and of the Trust Securities represented by such
Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the Trust
Securities represented by such Certificate on the part of any Person,
whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Security Certificates.
---------------------
(a) Security Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such Securities; and
(b) Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Securities
may be listed, or to conform to usage.
SECTION 9.5 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate;
and
(b) there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep each of them
harmless,
then, in the absence of notice that such Certificate shall have been
acquired by a person purporting to be a bona fide purchaser, any Regular
Trustee on behalf of the Trust shall execute and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like denomination. In connection with the issuance of
any new Certificate under this Section 9.5, the Regular Trustees may
require the payment of a sum sufficient to cover any documentary stamp tax
or other similar governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Trust Securities which shall be made solely from assets of the Trust;
or
(ii) required to pay to the Trust or to any Holder of Trust
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of the Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence or willful misconduct with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Trust
Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than the duties imposed on the
Institutional Trustee under the Trust Indenture Act), are agreed by the
parties hereto to replace such other duties and liabilities of such
Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Trust Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at law or in
equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have
no duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not
be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4 Indemnification.
---------------
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no reason-
able cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment
in its favor by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged
to be liable to the Trust unless and only to the extent that the Court
of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such expenses which such Court of Chancery or such other court shall
deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the
Sponsor only as authorized in the specific case upon a determination
that indemnification of the Company Indemnified Person is proper in
the circumstances because he has met the applicable standard of con-
duct set forth in paragraphs (i) and (ii). Such determination shall
be made (1) by the Regular Trustees by a majority vote of a quorum
consisting of such Regular Trustees who were not parties to such
action, suit or proceeding, (2) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees
so directs, by independent legal counsel in a written opinion, or (3)
by the Holders of the Common Securities.
(v) Expenses (including attorneys' fees and expenses) incurred
by a Company Indemnified Person in defending civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by
the Sponsor in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf such
Company Indemnified Person to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the Sponsor
as authorized in this Section 10.4(a). Notwithstanding the foregoing,
no advance shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by a majority
vote of a quorum of disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of
the Trust, that, based upon the facts known to the Regular Trustees,
counsel or the Common Security Holder at the time such determination
is made, such Company Indemnified Person acted in bad faith or in a
manner that such person did not believe to be in or not opposed to the
best interests of the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event
shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Holders of the Common Securities
reasonably determine that such person deliberately breached his duty
to the Trust or the Holders of the Securities.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor or vote of Holders of Securities or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Sponsor and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then
existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a merger, consolidation, amalgamation or
other business combination so that any person who is or was a
director, trustee, officer or employee of such constituent entity, or
is or was serving at the request of such constituent entity as a
director, trustee, officer, employee or agent of another entity, shall
stand in the same position under the provisions of this Section
10.4(a) with respect to the resulting or surviving entity as he would
have with respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Sponsor agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the
Institutional Trustee and the Delaware Trustee, and (iv) any officers,
directors, shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Institutional Trustee and the
Delaware Trustee (each of the Persons in (i) through (iv) being referred to
as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any and all loss, liability, damage,
claim or expense including taxes (other than taxes based on the income of
such Fiduciary Indemnified Person) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration or the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 10.4(b) shall survive
the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust
and the Holders of Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive
with the business of the Trust, shall not be deemed wrongful or improper.
No Covered Person, the Sponsor, the Delaware Trustee, or the Institutional
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered
Person, the Sponsor, the Delaware Trustee and the Institutional Trustee
shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee
and the Institutional Trustee may engage or be interested in any financial
or other transaction with the Sponsor or any Affiliate of the Sponsor, or
may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records
and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted
accounting principles, consistently applied. The Trust shall use the
accrual method of accounting for United States federal income tax purposes.
The books of account and the records of the Trust shall be examined by and
reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Trust Securities, within 90 days after
the end of each Fiscal Year of the Trust, annual financial statements of
the Trust, including a balance sheet of the Trust as of the end of such
Fiscal Year, and the related statements of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Trust Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Trust Securities held by
each Holder as is required by the Code and the Treasury Regulations.
Notwithstanding any right under the Code to deliver any such statement at a
later date, the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each calendar year.
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States
federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax
returns required to be filed by the Regular Trustees on behalf of the Trust
with any state or local taxing authority.
SECTION 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments
of funds in respect of the Debentures held by the Institutional Trustee
shall be made directly to the Institutional Trustee Account and no other
funds of the Trust shall be deposited in the Institutional Trustee Account.
The sole signatories for such accounts shall be designated by the Regular
Trustees; provided, however, that the Institutional Trustee shall designate
the signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
-----------
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Trust to assist it in determining
the extent of, and in fulfilling, its withholding obligations. The Regular
Trustees shall file required forms with applicable jurisdictions and,
unless an exemption from withholding is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and
pay over any amounts to any authority with respect to distributions or
allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event
of any claimed over withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be withheld
was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Trust Securities, this Declaration may only be
amended by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the
Institutional Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee;
(b) no amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officer's
Certificate from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have first
received:
(A) an Officer's Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Trust
Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms
of the Trust Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to be classified for purposes of United
States federal income taxation as an association taxable as a
corporation;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture
Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(c) at such time after the Trust has issued any Trust
Securities that remain outstanding, any amendment that would adversely
affect the rights, privileges or preferences of any Holder of Trust
Securities may be effected only with such additional requirements as may be
set forth in the terms of such Trust Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Trust Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders of the Trust Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority which amendment does
not have a material adverse effect on the right, preferences or
privileges of the Holders; and
(v) modify, eliminate and/or add any provision of, from or to
this Declaration in any other respect so long as such modification,
elimination or addition shall not adversely affect the interests of
the Holders of Securities in any material respect.
SECTION 12.2 Meetings of the Holders of Trust Securities;
--------------------------------------------
Action by Written Consent.
-------------------------
(a) Meetings of the Holders of any class of Trust Securities
may be called at any time by the Regular Trustees (or as provided in the
terms of the Trust Securities) to consider and act on any matter on which
Holders of such class of Trust Securities are entitled to act under the
terms of this Declaration, the terms of the Trust Securities or the rules
of any stock exchange on which the Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of such
class if directed to do so by the Holders of at least 33% in liquidation
amount of such class of Trust Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a writing stating
that the signing Holders of Trust Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Trust Securities calling a meeting shall specify in
writing the Trust Security Certificates held by the Holders of Trust
Securities exercising the right to call a meeting and only those Trust
Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph
has been met.
(b) Except to the extent otherwise provided in the terms of the
Trust Securities, the following provisions shall apply to meetings of
Holders of Trust Securities:
(i) notice of any such meeting shall be given to all the
Holders of Trust Securities having a right to vote thereat at least 21
days and not more than 18 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Trust
Securities is permitted or required under this Declaration or the
rules of any stock exchange on which the Securities are listed or
admitted for trading, such vote, consent or approval may be given at a
meeting of the Holders of Trust Securities. Any action that may be
taken at a meeting of the Holders of Trust Securities may be taken
without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Trust Securities owning not less
than the minimum amount in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Trust Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall
be given to the Holders of Trust Securities entitled to vote who have
not consented in writing. The Regular Trustees may specify that any
written ballot submitted to the Trust Security Holder for the purpose
of taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;
(ii) each Holder of a Trust Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Trust
Securities is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. No proxy shall be
valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Trust Securities executing it. Except
as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Trust Securities were stockholders
of a Delaware corporation;
(iii) each meeting of the Holders of the Trust Securities shall
be conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms
of the Trust Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Securities are then listed or
trading, otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings
of Holders of Trust Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any
Holders of Trust Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
-------------------------------------------------------
The Trustee that acts as initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and
warrants to the Trust and the Sponsor at the time of the Successor
Institutional Trustee's acceptance of its appointment as Institutional
Trustee, that:
(a) the Institutional Trustee is a Delaware banking corporation
with trust powers and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the
Institutional Trustee of the Declaration has been duly authorized by
all necessary corporate action on the part of the Institutional
Trustee. The Declaration has been duly executed and delivered by the
Institutional Trustee, and it constitutes a legal, valid and binding
obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of this Declaration
by the Institutional Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration
with or notice to, any Delaware or other state or any federal banking
authority is required for the execution, delivery or performance by
the Institutional Trustee of this Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Delaware Trustee's acceptance
of its appointment as Delaware Trustee, that:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) No consent, approval or authorization of, or registration
with or notice to, any Delaware or other state or any federal banking
authority is required for the execution, delivery or performance by
the Delaware Trustee of this Declaration.
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
-------
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Trust may give notice of to the Holders of the Trust Securities):
Washington Water Power Capital III
c/o The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Telecopy: (509) 489-4879
(b) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Trust Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: (302) 651-1576
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as
the Institutional Trustee may give notice of to the Holders of the
Trust Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: (302) 651-1576
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Trust):
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Telecopy: (509) 482-4879
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when received
in person 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 14.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware, and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor
trust. The provisions of this Declaration shall be interpreted to further
this intention of the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns.
----------------------
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to
be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused these presents to
be executed as of the day and year first above written.
---------------------------------------------
LAWRENCE J. PIERCE,
as Regular Trustee
---------------------------------------------
DOROTHY K. MERCER,
as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
------------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By:
------------------------------------------
Name:
Title:
THE WASHINGTON WATER POWER COMPANY,
as Sponsor
By:
------------------------------------------
Name:
Title:
ANNEX I
ANNEX I
TERMS OF
% SECURITIES, SERIES C
---- ---------
% TRUST ORIGINATED COMMON SECURITIES, SERIES C
----
Pursuant to Section 7.1 of the Amended and Restated Declaration
of Trust, dated as of , 199 (as amended from time to time, the
-------- -
"Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Securities and the Common
Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in
such Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
----------------------
(a) Securities. Securities of the Trust with an
---------- ----------
aggregate liquidation amount with respect to the assets of the Trust of
($ ) and a liquidation amount with respect
--------------------- -----------
to the assets of the Trust of $ per security, are hereby designated for
---
the purposes of identification only as " % Securities, Series
---- ---------
C" (the "Securities"). The Security Certificates evidencing the Securities
shall be substantially in the form of Exhibit A-1 to the Declaration, with
such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Securities are listed.
(b) Common Securities. Common Securities of the Trust
----------------- -------
with an aggregate liquidation amount with respect to the assets of the
Trust of dollars ($ ) and a liquidation
---------------------- ---------
amount with respect to the assets of the Trust of $ per common security,
---
are hereby designated for the purposes of identification only as " %
----
Trust Originated Common Securities, Series C" (the "Common Securities").
The Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a
rate of % per annum (the "Coupon Rate") of the stated liquidation
----
amount of $ per Security, such rate being the rate of interest payable
---
on the Debentures to be held by the Institutional Trustee. Distributions
in arrears for more than one Distribution period will bear interest thereon
compounded at the Coupon Rate (to the extent permitted by
---------
applicable law). The term "Distributions" as used herein includes such
cash distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full
Distribution period on the basis of a 360-day year of twelve
---------
30-day months, and for any period shorter than a full
---------
Distribution period for which Distributions are computed, Distributions
will be computed on the basis of the actual number of days elapsed per
-day Distribution period.
---
(b) Distributions on the Securities will be cumulative, will
accrue from , 199 , and will be payable in arrears, on
------ - ---------
of each year, commencing on , 199 , except as
--------- -------- -- -
otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not exceeding
--
consecutive Distribution periods (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debentures,
provided, however, that no Extension Period shall last beyond the date of
maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral,
---------
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded during
---------
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period;
provided, however, that such Extension Period, together with all such
previous and further extensions thereof, may not exceed consecutive
--
Distribution periods or extend beyond the maturity of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. The relevant record dates for the Securities shall
conform to the rules of any securities exchange on which the securities are
listed and, if none, shall be selected by the Regular Trustees, which dates
shall be at least one Business Day but less than 50 Business Days before
the relevant payment dates, which payment dates correspond to the interest
payment dates on the Debentures. The relevant record dates for the Common
Securities shall be the same record date as for the Securities.
Distributions payable on any Trust Securities that are not punctually paid
on any Distribution payment date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Trust Securities are registered on
the relevant record date, and such defaulted Distribution will instead be
payable to the Person in whose name such Trust Securities are registered on
the special record date or other specified date determined in accordance
with the Indenture. If any date on which Distributions are payable on the
Trust Securities is not a Business Day, then payment of the Distribution
payable on such date will be made on the next succeeding day that is a
Business Day except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date.
(d) In the event that there is any money or other property held
by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders of the
Trust Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Trust Securities
on the date of the dissolution, winding-up or termination, as the case may
be, will be entitled to receive out of the assets of the Trust available
for distribution to Holders of Trust Securities after satisfaction of
liabilities of creditors an amount equal to the aggregate of the stated
liquidation amount of $ per Trust Security plus accrued and unpaid
---
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, in connection with such dissolution,
winding-up or termination, Debentures in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of such Trust
Securities, with an interest rate equal to the Coupon Rate of, accrued and
unpaid interest in an amount equal to the accrued and unpaid Distributions
on, such Trust Securities, shall be distributed on a Pro Rata basis to the
Holders of the Trust Securities in exchange for such Trust Securities.
If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts
payable directly by the Trust on the Trust Securities shall be paid on a
Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the
Debenture Issuer or pursuant to a Tax Event as described below), the
proceeds from such repayment shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption
price of $ per Trust Security plus an amount equal to accrued and unpaid
---
Distributions thereon at the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more than
60 days' notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Securities will be redeemed Pro
Rata and the Securities to be redeemed will be as described in Section
4(f)(ii) below.
(c) If, at any time, a Tax Event (as defined below) shall occur
and be continuing, at the option of the Sponsor, within 90 days following
the occurrence of such Tax Event, either (i) the Regular Trustees may
dissolve the Trust, and, after satisfaction of creditors, cause Debentures
held by the Institutional Trustee, having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on, and having the same record date for
payment as the Trust Securities, to be distributed to the Holders of the
Trust Securities in liquidation of such Holders' interests in the Trust on
a Pro Rata basis, or (ii) the Debenture Issuer may, upon not less than 30
nor more than 60 days' notice, redeem the Debentures, in whole but not in
part, for cash, and, following such redemption, Trust Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the Redemption
Price on a Pro Rata basis; and provided, however, further, that, if at the
time there is available to the Trust the opportunity to eliminate, within
the 90 day period, the Tax Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar
reasonable measure that has no adverse effect on the Trust, the Debenture
Issuer, the Sponsor or the Holders of the Trust Securities ("Ministerial
Action"), the Trust or the Debenture Issuer will pursue such Ministerial
Action in lieu of such dissolution and distribution or redemption.
"Tax Event" means the receipt by the Sponsor of an opinion of
counsel to the effect that, as a result of (a) any amendment to,
clarification of or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting
taxation, (b) any judicial decision, official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice
or announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or
change in the official position or the interpretation of such
Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative
body, court, governmental authority or regulatory body, irrespective of the
manner in which such amendment, clarification or change is made known,
which amendment, clarification, or change is effective or such
pronouncement or decision is announced, in each case, on or after, the date
of the original issuance of the Debentures (including the enactment of any
legislation and the publication of any judicial decision or regulatory
determination on or after such date), there is more than an insubstantial
risk that (i) the Trust is or will be within 90 days of the date of such
amendment, clarification or change, subject to United States federal income
tax with respect to interest accrued or received on the Debentures, (ii)
the Trust is, or will be within 90 days of the date of such amendment,
clarification or change, subject to more than a de minimis amount of taxes,
duties or other governmental charges, or (iii) interest payable by the
Debenture Issuer to the Trust on the Debentures is not, or within 90 days
of the date of such amendment, clarification or change will not be,
deductible, in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Trust
Securities will be deemed to be no longer outstanding and (ii) any
certificates representing Trust Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on, and having the same record date for
payment as such Trust Securities until such certificates are presented to
the Debenture Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Trust Securities unless all accrued and unpaid Distributions have been paid
on all Trust Securities for all Distribution periods terminating
---------
on or before the date of redemption.
(e) If the Debentures are distributed to holders of the Trust
Securities, the Debenture Issuer will use all reasonable efforts to have
the Debentures listed on the New York Stock Exchange or on such other
exchange as the Securities were listed immediately prior to the
distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Trust Securities (a "Re-
demption/Distribution Notice"), will be given by the Trust by mail to
each Holder of Trust Securities to be redeemed or exchanged not fewer
than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date
fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to
Holders of Trust Securities. Each Redemption/Distribution Notice
shall be addressed to the Holders of Trust Securities at the address
of each such Holder appearing in the books and records of the Trust.
No defect in the Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the validity of
the redemption or exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding Trust
Securities are to be redeemed, the Trust Securities to be redeemed
shall be redeemed Pro Rata from each Holder of Securities. The
particular Securities to be redeemed shall be selected on a Pro Rata
basis not more than 60 days prior to the redemption date by the
Institutional Trustee from the outstanding Securities not previously
called for redemption, by such method as the Institutional Trustee
shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $ or an integral
---
multiple of $___ in excess thereof) of the liquidation preference
amount of Securities of a denomination larger than $ . The
---
Institutional Trustee shall notify the Transfer Agent and Registrar in
writing of the Securities selected for redemption, and in the case of
any Securities selected for partial redemption, the liquidation
preference amount thereof to be redeemed. For all purposes of the
Declaration, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part, or to the
portion of the aggregate liquidation preference amount of Securities
which has been or is to be redeemed.
(iii) If Trust Securities are to be redeemed and the Trust gives
a Redemption/Distribution Notice, then provided that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will pay the relevant Redemption
Price to the holders of such Trust Securities by check mailed to the
address of the relevant Holders appearing on the books and records of
the Trust on the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, if applicable,
then immediately prior to the close of business on the date of such
deposit, or on the redemption date, as applicable, distributions will
cease to accrue on the Trust Securities so called for redemption and
all rights of Holders of such Trust Securities so called for
redemption will cease, except the right of the Holders of such Trust
Securities to receive the Redemption Price, but without interest on
such Redemption Price. Neither the Regular Trustees nor the Trust
shall be required to register or cause to be registered the transfer
of any Trust Securities that have been so called for redemption. If
any date fixed for redemption of Trust Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any
Trust Securities is improperly withheld or refused and not paid either
by the Institutional Trustee or by the Sponsor as guarantor pursuant
to the relevant Guarantee, Distributions on such Trust Securities will
continue to accrue from the original redemption date to the actual
date of payment, in which case the actual payment date will be consid-
ered the date fixed for redemption for purposes of calculating the
Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the
Securities, to the Holder thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided
the acquiror is not the Holder of the Common Securities or the obligor
under the Indenture, the Sponsor or any of its subsidiaries may at any
time and from time to time purchase outstanding Securities by tender,
in the open market or by private agreement.
5. Voting Rights - Securities.
--------------------------
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph,
the Holders of a majority in aggregate liquidation amount of the
Securities, voting separately as a class, may direct the time, method, and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct
the Institutional Trustee, as holder of the Debentures, to (i) exercise the
remedies available under the Indenture of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii)
waive any past default and its consequences that is waivable under
Section 813 of the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due
and payable. The Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or
the Debenture Trustee as set forth above, the Institutional Trustee shall
not take any action in accordance with the directions of the Holders of the
Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be treated as an
association taxable as a corporation on account of such action. If an
Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date),
then a holder of Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on
the Debentures having a principal amount equal to the aggregate liquidation
amount of the Securities of such holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such
Direct Action, the rights of the holders of the Common Securities Holder
will be subrogated to the rights of such holder of Securities to the extent
of any payment made by the Issuer to such holder of Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders
of Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Securities may be given
at a separate meeting of Holders of Securities convened for such purpose,
at a meeting of all of the Holders of Trust Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at which Holders of Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Securities will be
required for the Trust to redeem and cancel Securities or to distribute the
Debentures in accordance with the Declaration and the terms of the Trust
Securities.
Notwithstanding that Holders of Securities are entitled to vote
or consent under any of the circumstances described above, any of the
Securities that are owned by the Sponsor or any Affiliate of the Sponsor
shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), (c), 7(a) and 8 as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
the Event of Default with respect to the Securities has been cured, waived,
or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under the Declaration, including
(i) directing the time, method, place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii)
waive any past default and its consequences that is waivable under Section
713 of the Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and
payable. Pursuant to this Section 6(c), the Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the
Holders of the Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional
Trustee shall not take any action in accordance with the directions of the
Holders of the Common Securities under this paragraph unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will
not be treated as an association taxable as a corporation on account of
such action. If the Institutional Trustee fails to enforce its rights
under the Declaration, any Holder of Common Securities may institute a
legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice
of any meeting at which Holders of Common Securities are entitled to vote,
or of any matter upon which action by written consent of such Holders is to
be taken, to be mailed to each Holder of record of Common Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will
be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms
of the Trust Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the
Securities in any material respect, whether by way of amendment to the
Declaration or otherwise, or (ii) the dissolution, winding-up or
termination of the Trust, other than as described in Section 8.1 of the
Declaration, then the Holders of outstanding Trust Securities voting
together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of
at least a Majority in liquidation amount of the Trust Securities, affected
thereby, provided, however, that if any amendment or proposal referred to
in clause (i) above would so adversely affect only the Securities or only
the Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of a Majority in liquidation amount
of such class of Trust Securities.
(b) In the event the consent of the Institutional Trustee as
the holder of the Debentures is required under the Indenture with respect
to any amendment, modification or termination on the Indenture or the
Debentures, the Institutional Trustee shall request the written approval of
the Holders of the Trust Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in liquidation amount
of the Trust Securities voting together as a single class; provided,
however, that where a consent under the Indenture would require the consent
of each holder of the Debentures, the Institutional Trustee may only give
such consent with the approval of each Holder of outstanding Trust
Securities; and provided, further, that, the Institutional Trustee shall
not take any action in accordance with the directions of the Holders of the
Trust Securities under this Section 7(b) unless the Institutional Trustee
has obtained an opinion of tax counsel to the effect that for the purposes
of United States federal income tax the Trust will not be treated as an
association taxable as a corporation on account of such action.
8. Pro Rata.
--------
A reference in these terms of the Trust Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata
to each Holder of Trust Securities according to the aggregate liquidation
amount of the Trust Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Trust Securities outstanding
unless, in relation to a payment, an Event of Default under the Declaration
has occurred and is continuing, in which case any funds available to make
such payment shall be paid first to each Holder of the Securities pro rata
according to the aggregate liquidation amount of Securities held by the
relevant Holder relative to the aggregate liquidation amount of all
Securities outstanding, and only after satisfaction of all amounts owed to
the Holders of the Securities, to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by
the relevant Holder relative to the aggregate liquidation amount of all
Common Securities outstanding.
9. Ranking.
-------
The Securities rank pari passu and payment thereon shall be made
Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing, the rights of Holders of the Common Securities
and the rights of the Sponsor or any Affiliate of the Sponsor, to the
extent of their beneficial ownership of Securities, to payment in respect
of Distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights to payment of other Holders of the
Securities.
10. Listing.
-------
The Regular Trustees shall use all reasonable efforts to cause
the Securities to be listed for quotation on the New York Stock Exchange.
11. Acceptance of Guarantee and Indenture.
-------------------------------------
Each Holder of Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Securities Guarantee,
the Common Securities Guarantee and the Indenture, respectively, including
the subordination provisions therein.
12. No Preemptive Rights.
--------------------
The Holders of the Trust Securities shall have no preemptive
rights to subscribe for any additional securities.
13. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written
request to the Sponsor at its principal place of business.
EXHIBIT A-1
EXHIBIT A-1
FORM OF SECURITY CERTIFICATE
This Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Security is exchangeable for Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Security
(other than a transfer of this Security as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary) may be registered except
in limited circumstances.
Unless this Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to
the Trust or its agent for registration of transfer, exchange or payment,
and any Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Securities
CUSIP NO.
-----------
Certificate Evidencing Securities
of
WASHINGTON WATER POWER CAPITAL III
% Securities, Series C
---- ---------
(liquidation amount $ per Security)
---
WASHINGTON WATER POWER CAPITAL III, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that (the "Holder") is the registered owner of
-----------
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the % Securities, Series C
---- ---------
(liquidation amount $ per Security) (the "Securities"). The Securities
---
are transferable on the books and records of the Trust, in person or by a
duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of , 199 , as the same may be amended from time to time (the
------ -
"Declaration"), including the designation of the terms of the Securities as
set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the
Declaration, the Securities Guarantee and the Indenture to a Holder without
charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 199 .
---- ------- -
WASHINGTON WATER POWER CAPITAL III
By:
------------------------------------------
Name:
Title: Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Security will be fixed at a rate
per annum of % (the "Coupon Rate") of the stated liquidation amount of
----
$ per Security, such rate being the rate of interest payable on the
---
Debentures to be held by the Institutional Trustee. Distributions in
arrears for more than one Distribution period will bear interest thereon
compounded at the Coupon Rate (to the extent permitted by
---------
applicable law). The term "Distributions" as used herein includes such
cash distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full
Distribution period on the basis of a 360-day year of twelve
---------
30-day months, and for any period shorter than a full
---------
Distribution period for which Distributions are computed, Distributions
will be computed on the basis of the actual number of days elapsed per
-day Distribution period.
---
Except as otherwise described below, distributions on the
Securities will be cumulative, will accrue from the date of original
issuance and will be payable in arrears, on of each
--------- -----------
year, commencing on , 199 , to , 20 , to holders of
-------- -- - -------- -- --
record on the relevant record dates (as specified in the Declaration) next
preceding such payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period
not exceeding consecutive Distribution periods (each an "Extension
--
Period") and as a consequence of such deferral, Distributions will also be
deferred, provided, however, that no Extension Period shall last beyond the
date of the maturity of the Debentures. Despite such deferral, _________
---------
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded during
---------
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period;
provided, however, that such Extension Period together with all such
previous and further extensions thereof may not exceed consecutive
--
Distribution periods or extend beyond the maturity of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
The Securities shall be redeemable as provided in the
Declaration.
The Declaration and the Securities shall be governed by and
construed in accordance with the laws of the State of Delaware, and all
rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
-------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security
Certificate to:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-------------------------------------------------------------------------
-------------------------------------------------------------------------
------------------------------------------------------------------- agent
to transfer this Security Certificate on the books of the Trust. The agent
may substitute another to act for him or her.
Date:
-------------------
Signature:
---------------
(Sign exactly as your name appears on the other side of this Security
Certificate)
Signature Guarantee*
------------------------------------
-----------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
EXHIBIT A-2
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
WASHINGTON WATER POWER CAPITAL III
% Trust Originated Common Securities, Series C
----
(liquidation amount $ per Common Security)
---
WASHINGTON WATER POWER CAPITAL III, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that The Washington Water Power Company (the "Holder") is the
registered owner of common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the % Trust
----
Originated Common Securities, Series C (liquidation amount $ per Common
---
Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of , 199 , as the same may be amended from
-------- -
time to time (the "Declaration"), including the designation of the terms of
the Common Securities as set forth in Annex I to the Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the
Common Securities Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Common Securities Guarantee and
the Indenture to a Holder without charge upon written request to the
Sponsor at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this
day of , 199 .
--- ------------- -
WASHINGTON WATER POWER CAPITAL III
By:
------------------------------------------
Name:
Title: Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a
rate per annum of % (the "Coupon Rate") of the stated liquidation
----
amount of $ per Common Security, such rate being the rate of interest
---
payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears for more than one Distribution period will bear
interest thereon compounded at the Coupon Rate (to the extent
---------
permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds available
therefor. The amount of Distributions payable for any period will be
computed for any full Distribution period on the basis of a
---------
360-day year of twelve 30-day months, and for any period shorter than a
full Distribution period for which Distributions are computed,
---------
Distributions will be computed on the basis of the actual number of days
elapsed per -day Distribution period.
---
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original
issuance and will be payable in arrears, on of each
--------- -----------
year, commencing on , 199 , to , 20 , to Holders of
-------- -- - -------- -- --
record on the relevant record dates (as specified in the Declaration) next
preceding such payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period
not exceeding consecutive Distribution periods (each an "Extension
--
Period") and as a consequence of such deferral, Distributions will also be
deferred; provided, however, that no Extension Period shall last beyond the
date of the maturity of the Debentures. Despite such deferral,
---------
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded during
---------
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period;
provided, however, that such Extension Period together with all such
previous and further extensions thereof may not exceed consecutive
--
Distribution periods or extend beyond the maturity date of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear
on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence
a new Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Declaration and the Common Securities shall be governed by
and construed in accordance with the laws of the State of Delaware, and all
rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
--------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
------------------------------------------------
-------------------------------------------------------------------------
agent to transfer
-------------------------------------------------------
this Common Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
---------------------
Signature:
---------------
(Sign exactly as your name appears on the other side of this Common
Security Certificate)
Signature Guarantee*:
------------------------------------------------
----------------------------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as amended.
Exhibit 4(a)-10
------------------------------
THE WASHINGTON WATER POWER COMPANY
TO
WILMINGTON TRUST COMPANY,
TRUSTEE
_______________
INDENTURE
DATED AS OF _______ 1, 199_
_______________
------------------------------
THE WASHINGTON WATER POWER COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
INDENTURE, DATED AS OF ________ 1, 199_
--------------------------------------------------------------
TRUST INDENTURE ACT SECTION INDENTURE SECTION(S)
--------------------------- --------------------
Section 310(a)(1) . . . . . . . . . . . . . . . . 809
(a)(2) . . . . . . . . . . . . . . . . 809
(a)(3) . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . 808, 810
Section 311(a) . . . . . . . . . . . . . . . . . 813
(b) . . . . . . . . . . . . . . . . . 813
(c) . . . . . . . . . . . . . . . . . 813
Section 312(a) . . . . . . . . . . . . . . . . . 901
(b) . . . . . . . . . . . . . . . . . 901
(c) . . . . . . . . . . . . . . . . . 901
Section 313(a) . . . . . . . . . . . . . . . . . 902
(b) . . . . . . . . . . . . . . . . . 902
(c) . . . . . . . . . . . . . . . . . 902
(d) . . . . . . . . . . . . . . . . . 902
Section 314(a) . . . . . . . . . . . . . . . . . 902, 507
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . 801, 803
(b) . . . . . . . . . . . . . . . . . 802
(c) . . . . . . . . . . . . . . . . . 801
(d) . . . . . . . . . . . . . . . . . 801
(e) . . . . . . . . . . . . . . . . . 714
Section 316(a) . . . . . . . . . . . . . . . . . 712, 713
(a)(1)(A) . . . . . . . . . . . . . . 702, 712
(a)(1)(B) . . . . . . . . . . . . . . 713
(a)(2) . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . 708
Section 317(a)(1) . . . . . . . . . . . . . . . . 703
(a)(2) . . . . . . . . . . . . . . . . 705
(b) . . . . . . . . . . . . . . . . . 503
Section 318(a) . . . . . . . . . . . . . . . . . 107
TABLE OF CONTENTS
-----------------
PAGE
----
Recital of the Company . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. General Definitions . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . 2
Authorized Officer . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . 3
Company Order or Company Request . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . 3
Declaration . . . . . . . . . . . . . . . . . . . . 3
Discount Security . . . . . . . . . . . . . . . . . 3
Interest . . . . . . . . . . . . . . . . . . . . . 3
Dollar or $ . . . . . . . . . . . . . . . . . . . . 3
Eligible Obligations . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . 4
Fair Value . . . . . . . . . . . . . . . . . . . . 4
Governmental Authority . . . . . . . . . . . . . . 4
Government Obligations . . . . . . . . . . . . . . 4
Guarantee . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . 4
Independent Expert's Certificate . . . . . . . . . 4
Institutional Trustee . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . . . . 5
Notice of Default . . . . . . . . . . . . . . . . . 5
Officer's Certificate . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . 6
Periodic Offering . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . 7
Place of Payment . . . . . . . . . . . . . . . . . 7
Predecessor Security . . . . . . . . . . . . . . . 7
Redemption Date . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . 7
Required Currency . . . . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . 7
Security Register . . . . . . . . . . . . . . . . . 7
Security Registrar . . . . . . . . . . . . . . . . 7
Senior Indebtedness . . . . . . . . . . . . . . . . 7
Special Record Date . . . . . . . . . . . . . . . . 8
Stated Interest Rate . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . 8
Successor Corporation . . . . . . . . . . . . . . . 8
Tranche . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . 8
Trust Securities . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . 8
United States . . . . . . . . . . . . . . . . . . . 9
Unpaid Interest . . . . . . . . . . . . . . . . . . 9
Washington Water Power Trust . . . . . . . . . . . 9
SECTION 102. Compliance Certificates and Opinions . . . . . . 9
SECTION 103. Content and Form of Documents Delivered to Trustee 10
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . 11
SECTION 105. Notices, Etc. to Trustee and Company . . . . . . 13
SECTION 106. Notice to Holders of Securities; Waiver . . . . 13
SECTION 107. Conflict with Trust Indenture Act . . . . . . . 14
SECTION 108. Effect of Headings and Table of Contents . . . . 14
SECTION 109. Successors and Assigns . . . . . . . . . . . . . 14
SECTION 110. Separability Clause . . . . . . . . . . . . . . 14
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . 14
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . 15
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . 15
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . 15
SECTION 202. Form of Trustee's Certificate of Authentication 16
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . 16
SECTION 302. Denominations . . . . . . . . . . . . . . . . . 20
SECTION 303. Execution, Dating, Certificate of Authentication 20
SECTION 304. Temporary Securities . . . . . . . . . . . . . . 23
SECTION 305. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . 24
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities 25
SECTION 307. Payment of Interest; Interest Rights Preserved . 26
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . 27
SECTION 309. Cancellation by Security Registrar . . . . . . . 27
SECTION 310. Computation of Interest . . . . . . . . . . . . 28
SECTION 311. Payment to Be in Proper Currency . . . . . . . . 28
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. Applicability of Article . . . . . . . . . . . . 28
SECTION 402. Election to Redeem; Notice to Trustee . . . . . 29
SECTION 403. Selection of Securities to Be Redeemed . . . . . 29
SECTION 404. Notice of Redemption . . . . . . . . . . . . . . 30
SECTION 405. Securities Payable on Redemption Date . . . . . 31
SECTION 406. Securities Redeemed in Part . . . . . . . . . . 31
ARTICLE FIVE
COVENANTS
SECTION 501. Payment of Securities. . . . . . . . . . . . . . 32
SECTION 502. Maintenance of Office or Agency . . . . . . . . 32
SECTION 503. Money for Securities Payments to Be Held in Trust 33
SECTION 504. Corporate Existence . . . . . . . . . . . . . . 34
SECTION 505. Maintenance of Properties . . . . . . . . . . . 34
SECTION 506. Waiver of Certain Covenants . . . . . . . . . . 35
SECTION 507. Annual Officer's Certificate as to Compliance. . 35
SECTION 508. Restriction on Payment of Dividends, Etc. . . . 36
SECTION 509. Washington Water Power Trusts. . . . . . . . . . 36
ARTICLE SIX
SATISFACTION AND DISCHARGE
SECTION 601. Satisfaction and Discharge of Securities . . . . 37
SECTION 602. Satisfaction and Discharge of Indenture . . . . 39
SECTION 603. Application of Trust Money . . . . . . . . . . . 40
ARTICLE SEVEN
EVENTS OF DEFAULT; REMEDIES
SECTION 701. Events of Default . . . . . . . . . . . . . . . 40
SECTION 702. Acceleration of Maturity; Rescission and Annulment 42
SECTION 703. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . 43
SECTION 704. Application of Money Collected . . . . . . . . . 44
SECTION 705. Trustee May File Proofs of Claim . . . . . . . . 44
SECTION 706. Trustee May Enforce Claims without Possession of
Securities . . . . . . . . . . . . . . . . . . 45
SECTION 707. Limitation on Suits . . . . . . . . . . . . . . 46
SECTION 708. Unconditional Right of Holders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . 46
SECTION 709. Restoration of Rights and Remedies . . . . . . . 47
SECTION 710. Rights and Remedies Cumulative . . . . . . . . . 47
SECTION 711. Delay or Omission Not Waiver . . . . . . . . . . 47
SECTION 712. Control by Holders of Securities . . . . . . . . 47
SECTION 713. Waiver of Past Defaults . . . . . . . . . . . . 48
SECTION 714. Undertaking for Costs . . . . . . . . . . . . . 48
SECTION 715. Waiver of Stay or Extension Laws . . . . . . . . 49
SECTION 716. Action by Holders of Certain Trust Securities. . 49
ARTICLE EIGHT
THE TRUSTEE
SECTION 801. Certain Duties and Responsibilities . . . . . . 50
SECTION 802. Notice of Defaults . . . . . . . . . . . . . . . 51
SECTION 803. Certain Rights of Trustee . . . . . . . . . . . 51
SECTION 804. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . 53
SECTION 805. May Hold Securities . . . . . . . . . . . . . . 53
SECTION 806. Money Held in Trust . . . . . . . . . . . . . . 53
SECTION 807. Compensation and Reimbursement . . . . . . . . . 53
SECTION 808. Disqualification; Conflicting Interests . . . . 54
SECTION 809. Corporate Trustee Required; Eligibility . . . . 54
SECTION 810. Resignation and Removal; Appointment of Successor 55
SECTION 811. Acceptance of Appointment by Successor . . . . . 57
SECTION 812. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . 58
SECTION 813. Preferential Collection of Claims against Company 58
SECTION 814. Appointment of Authenticating Agent . . . . . . 59
ARTICLE NINE
LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY
SECTION 901. Lists of Holders . . . . . . . . . . . . . . . . 61
SECTION 902. Reports by Trustee and Company . . . . . . . . . 61
ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE
OR OTHER TRANSFER
SECTION 1001. Company may Consolidate, etc., Only on Certain
Terms . . . . . . . . . . . . . . . . . . . . 62
SECTION 1002. Successor Corporation Substituted . . . . . . . 63
SECTION 1003. Release of Company upon Conveyance or Other
Transfer . . . . . . . . . . . . . . . . . . . 63
SECTION 1004. Merger into Company . . . . . . . . . . . . . . 63
SECTION 1005. Transfer of Less than the Entirety . . . . . . 63
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 1101. Supplemental Indentures without Consent of
Holders . . . . . . . . . . . . . . . . . . . 66
SECTION 1102. Supplemental Indentures with Consent of Holders 68
SECTION 1103. Execution of Supplemental Indentures . . . . . 70
SECTION 1104. Effect of Supplemental Indentures . . . . . . . 70
SECTION 1105. Conformity with Trust Indenture Act . . . . . . 70
SECTION 1106. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . . 70
SECTION 1107. Modification Without Supplemental Indenture . . 70
ARTICLE TWELVE
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1201. Purposes for Which Meetings May Be Called. . . 71
SECTION 1202. Call, Notice and Place of Meetings . . . . . . 71
SECTION 1203. Persons Entitled to Vote at Meetings . . . . . 72
SECTION 1204. Quorum; Action . . . . . . . . . . . . . . . . 72
SECTION 1205. Attendance at Meetings; Determination
of Voting Rights; Conduct and Adjournment
of Meetings . . . . . . . . . . . . . . . . . 73
SECTION 1206. Counting Votes and Recording Action of Meetings 74
SECTION 1207. Action without Meeting . . . . . . . . . . . . 75
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 1301. Liability Solely Corporate . . . . . . . . . . 75
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES
SECTION 1401. Securities Subordinate to Senior Indebtedness. 75
SECTION 1402. Payment Over of Proceeds of Securities. . . . . 76
SECTION 1403. Disputes with Holders of Certain Senior
Indebtedness. . . . . . . . . . . . . . . . . 78
SECTION 1404. Subrogation. . . . . . . . . . . . . . . . . . 78
SECTION 1405. Obligation of the Company Unconditional. . . . 78
SECTION 1406. Priority of Senior Indebtedness Upon Maturity. 79
SECTION 1407. Trustee as Holder of Senior Indebtedness. . . . 79
SECTION 1408. Notice to Trustee to Effectuate Subordination. 79
SECTION 1409. Modification, Extension, etc. of Senior
Indebtedness. . . . . . . . . . . . . . . . . 80
SECTION 1410. Trustee Has No Fiduciary Duty to Holders of
Senior Indebtedness. . . . . . . . . . . . . 80
SECTION 1411. Paying Agents Other Than the Trustee. . . . . . 80
SECTION 1412. Rights of Holders of Senior Indebtedness Not
Impaired. . . . . . . . . . . . . . . . . . . 81
SECTION 1413. Effect of Subordination Provisions; Termination. 81
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 82
INDENTURE, dated as of _________ 1, 199_ between THE WASHINGTON
WATER POWER COMPANY, a corporation organized and existing under the laws of
the State of Washington (hereinafter sometimes called the "Company"), and
Wilmington Trust Company, a Delaware banking corporation, trustee
(hereinafter sometimes called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of unsecured
subordinated debentures, notes or other evidences of indebtedness (herein
called the "Securities"), to be issued in one or more series as
contemplated herein; all acts necessary to make this Indenture a valid
agreement of the Company have been performed.
NOW, THEREFORE, THIS INDENTURE WITNESSETH that, in consideration
of the premises and of the purchase of the Securities by the Holders
thereof, it is hereby covenanted and agreed by and between the Company and
the Trustee that all the Securities are to be authenticated and delivered
subject to the further covenants, conditions and trusts hereinafter set
forth, and the Company hereby covenants and agrees to and with the Trustee,
for the equal and ratable benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. GENERAL DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well
as the singular;
(b) all terms used herein without definition which are
defined in the Trust Indenture Act, either directly or by refer-
ence therein, have the meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally
accepted accounting principles in the United States; and, except
as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting
principles as are generally accepted in the United States at the
date of such computation or, at the election of the Company from
time to time, at the date of the execution and delivery of this
Indenture; provided, however, that in determining generally
accepted accounting principles applicable to the Company, effect
shall be given, to the extent required, to any order, rule or
regulation of any administrative agency, regulatory authority or
other governmental body having jurisdiction over the Company; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
"ACT", when used with respect to any Holder of a Security, has
the meaning specified in Section 104.
"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 generally 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.
"AUTHENTICATING AGENT" means any Person (other than the Company
or an Affiliate of the Company) authorized by the Trustee to act on behalf
of the Trustee to authenticate the Securities of one or more series.
"AUTHORIZED OFFICER" means the Chairman of the Board, the
President, any Vice President, the Treasurer or the Corporate Secretary or
any other duly authorized officer, agent or attorney-in-fact of the Company
named in an Officer's Certificate signed by any of such corporate officers.
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any committee thereof duly authorized to act in respect of
matters relating to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Corporate Secretary or an Assistant Corporate Secretary of the Company to
have been duly adopted by the Board of Directors and to be in full force
and effect on the date of such certification, and delivered to the Trustee.
"BUSINESS DAY", when used with respect to a Place of Payment or
any other particular location specified in the Securities or this
Indenture, means any day, other than a Saturday or Sunday, which is not a
day on which banking institutions or trust companies in such Place of
Payment or other location are generally authorized or required by law,
regulation or executive order to remain closed, except as may be otherwise
specified as contemplated by Section 301.
"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 the execution and
delivery of this Indenture 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.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY ORDER" or "COMPANY REQUEST" means a written request or
order signed in the name of the Company by an Authorized Officer and deliv-
ered to the Trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered, which office at the date of the execution and delivery of
this Indenture is located at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890.
"CORPORATION" means a corporation, association, company, joint
stock company or business trust.
"DECLARATION", with respect to a Washington Water Power Trust,
means the Declaration of Trust establishing such trust, as the same shall
be amended and restated from time to time.
"DISCOUNT SECURITY" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
702. "INTEREST" with respect to a Discount Security means interest, if
any, borne by such Security at a Stated Interest Rate.
"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.
"ELIGIBLE OBLIGATIONS" means:
(a) with respect to Securities denominated in Dollars,
Government Obligations; or
(b) with respect to Securities denominated in a currency
other than Dollars or in a composite currency, such other
obligations or instruments as shall be specified with respect to
such Securities as contemplated by Section 301.
"EVENT OF DEFAULT" has the meaning specified in Section 701.
"FAIR VALUE" has the meaning specified in Section 1005.
"GOVERNMENTAL AUTHORITY" means the government of the United
States or of any State or Territory thereof or of the District of Columbia
or of any county, municipality or other political subdivision of any
thereof, or any department, agency, authority or other instrumentality of
any of the foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the
United States entitled to the benefit of the full faith and
credit thereof; and
(b) certificates, depositary receipts or other instruments
which evidence a direct ownership interest in obligations
described in clause (a) above or in any specific interest or
principal payments due in respect thereof; provided, however,
that the custodian of such obligations or specific interest or
principal payments shall be a bank or trust company (which may
include the Trustee or any Paying Agent) subject to Federal or
State supervision or examination with a combined capital and
surplus of at least Fifty Million Dollars ($50,000,000); and
provided, further, that except as may be otherwise required by
law, such custodian shall be obligated to pay to the holders of
such certificates, depositary receipts or other instruments the
full amount received by such custodian in respect of such
obligations or specific payments and shall not be permitted to
make any deduction therefrom.
"GUARANTEE", with respect to a Washington Water Power Trust,
means a guarantee agreement between the Company and the Institutional
Trustee of such trust for the benefit of the holders from time to time of
any of the Trust Securities of such trust.
"HOLDER" means a Person in whose name a Security is registered in
the Security Register.
"INDENTURE" means the Indenture, dated as of _________ 1, 199_ as
originally executed and delivered and as it has been and may from time to
time be amended and/or supplemented by one or more indentures or other
instruments supplemental thereto or hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of particular
series of Securities established as contemplated by Section 301.
"INDEPENDENT EXPERT'S CERTIFICATE" has the meaning specified in
Section 1005.
"INSTITUTIONAL TRUSTEE", with respect to a Washington Water Power
Trust, has the meaning set forth in the Declaration establishing such
trust.
"INTEREST PAYMENT DATE", when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"MATURITY", when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as provided in such Security or in this Indenture,
whether at the Stated Maturity, by declaration of acceleration, upon call
for redemption or otherwise.
"NOTICE OF DEFAULT" has the meaning specified in Section 701.
"OFFICER'S CERTIFICATE" means a certificate signed by an
Authorized Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may
be counsel for the Company or other counsel acceptable to the Trustee and
who may be an employee or Affiliate of the Company.
"OUTSTANDING", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(a) Securities theretofore canceled or delivered to the
Trustee for cancellation;
(b) Securities deemed to have been paid for all purposes of
this Indenture in accordance with Section 601 (whether or not the
Company's indebtedness in respect thereof shall be satisfied and
discharged for any other purpose); and
(c) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it and the
Company that such Securities are held by a bona fide purchaser or
purchasers in whose hands such Securities are valid obligations
of the Company;
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the Securities Outstanding under this
Indenture, or the Outstanding Securities of any series or Tranche, have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder or whether or not a quorum is present at a meeting of
Holders of Securities,
(x) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such
other obligor (unless the Company, such obligor or such Affiliate
owns all Securities Outstanding under this Indenture, or all
Outstanding Securities of each such series and each such Tranche,
as the case may be, determined without regard to this clause (x))
shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization, direction,
notice, consent or waiver or upon any such determination as to
the presence of a quorum, only Securities which the Trustee knows
to be so owned shall be so disregarded; provided, however, that
Securities so owned which have been pledged in good faith may be
regarded as Outstanding if it is established to the reasonable
satisfaction of the Trustee that the pledgee, and not the
Company, any such other obligor or Affiliate of either thereof,
has the right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other
obligor; and
(y) the principal amount of a Discount Security that shall
be deemed to be Outstanding for such purposes shall be the amount
of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of
the Maturity thereof pursuant to Section 702; and
provided, further, that, in the case of any Security the principal of which
is payable from time to time without presentment or surrender, the
principal amount of such Security that shall be deemed to be Outstanding at
any time for all purposes of this Indenture shall be the original principal
amount thereof less the aggregate amount of principal thereof theretofore
paid.
"PAYING AGENT" means any Person, including the Company,
authorized by the Company to pay the principal of and premium, if any, or
interest, if any, on any Securities on behalf of the Company.
"PERIODIC OFFERING" means an offering of Securities of a series
from time to time any or all of the specific terms of which Securities,
including without limitation the rate or rates of interest, if any,
thereon, the Stated Maturity or Maturities thereof and the redemption pro-
visions, if any, with respect thereto, are to be determined by the Company
or its agents from time to time subsequent to the initial request for the
authentication and delivery of such Securities by the Trustee, all as
contemplated in Section 301 and clause (b) of Section 303.
"PERSON" means any individual, corporation, partnership, limited
liability partnership, limited liability company, joint venture, trust or
unincorporated organization or any Governmental Authority.
"PLACE OF PAYMENT", when used with respect to the Securities of
any series, or any Tranche thereof, means the place or places, specified as
contemplated by Section 301, at which, subject to Section 502, principal of
and premium, if any, and interest, if any, on the Securities of such series
or Tranche are payable.
"PREDECESSOR SECURITY" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed (to the extent lawful) to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.
"REDEMPTION DATE", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for
that purpose as contemplated by Section 301.
"REQUIRED CURRENCY" has the meaning specified in Section 311.
"RESPONSIBLE OFFICER", when used with respect to the Trustee,
means any officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"SECURITIES" means any bonds, notes and other evidences of
indebtedness authenticated and delivered under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in Section 305.
"SENIOR INDEBTEDNESS" means, with respect to any Person (a)
indebtedness (including premium, if any, and interest, if any, thereon) of
such Person for money borrowed or for the deferred purchase price of
property or services; (b) all other indebtedness (including premium, if
any, and interest, if any, thereon) evidenced by bonds, debentures, notes
or other similar instruments (other than Securities) issued by such Person;
(c) all obligations of such Person under lease agreements designating such
Person as lessee, irrespective of the treatment of any such lease agreement
for accounting, tax or other purposes; (d) all obligations of such Person
for reimbursement (including premium, if any, and interest, if any thereon)
in respect of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (e) all obligations of the
character referred to in clauses (a) through (d) above of other Persons for
the payment of which such Person is responsible or liable as obligor,
guarantor or otherwise; and (f) all obligations of the character referred
to in clauses (a) through (d) above of other Persons secured by any lien on
any property or asset of such Person (whether or not such obligation is
assumed by such Person); provided, however, that Senior Indebtedness shall
not include (x) any such indebtedness that is by its terms subordinated to
or pari passu with the Securities or (y) any indebtedness between or among
such Person and its Affiliates, including all other debt securities and
guarantees in respect of such debt securities, issued to (i) any Washington
Water Power Trust or (ii) any other trust, or a trustee of such trust,
partnership or other entity which is a financing vehicle of such Person in
connection with the issuance by such financing vehicle of preferred
securities.
"SPECIAL RECORD DATE" for the payment of any Unpaid Interest on
the Securities of any series means a date fixed by the Trustee pursuant to
Section 307.
"STATED INTEREST RATE" means a rate (whether fixed or variable)
at which an obligation by its terms is stated to bear simple interest. Any
calculation or other determination to be made under this Indenture by
reference to the Stated Interest Rate on an obligation shall be made (a) if
the Company's obligations in respect of any other indebtedness shall be
evidenced or secured in whole or in part by such obligation, by reference
to the lower of the Stated Interest Rate on such obligation and the Stated
Interest Rate on such other indebtedness and (b) without regard to the
effective interest cost to the Company of such obligation or of any such
other indebtedness.
"STATED MATURITY", when used with respect to any obligation or
any installment of principal thereof or interest thereon, means the date on
which the principal of such obligation or such installment of principal or
interest is stated to be due and payable (without regard to any provisions
for redemption, prepayment, acceleration, purchase or extension).
"SUCCESSOR CORPORATION" has the meaning set forth in Section
1001.
"TRANCHE" means a group of Securities which (a) are of the same
series and (b) have identical terms except as to principal amount and/or
date of issuance.
"TRUST INDENTURE ACT" means, as of any time, the Trust Indenture
Act of 1939, or any successor statute, as in effect at such time.
"TRUST SECURITIES", with respect to a Washington Water Power
Trust, means the securities issued by such trust, as established in the
Declaration of such trust.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor trustee shall have become
such with respect to one or more series of Securities pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder, and, if at any
time there is more than one Person acting as trustee hereunder, "Trustee"
shall mean each such Person so acting.
"UNITED STATES" means the United States of America, its
Territories, its possessions and other areas subject to its political
jurisdiction.
"UNPAID INTEREST" has the meaning specified in Section 307.
"WASHINGTON WATER POWER TRUST" means each of Washington Water
Power Capital I, Washington Water Power Capital II and Washington Water
Power Capital III, each a business trust established under the laws of the
State of Delaware, and any other similar trust established for the purpose
of issuing securities upon the issuance and delivery to it of Securities.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Indenture, upon
any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the
Trustee an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action 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, it being understood 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 Indenture 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 Indenture shall include:
(a) a statement that each individual signing such cer-
tificate 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
individual, such individual has made such examination or
investigation as is necessary to enable such individual 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
individual, such condition or covenant has been complied with.
SECTION 103. CONTENT AND FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
(a) Any Officer's Certificate may be based (without further
examination or investigation), insofar as it relates to or is dependent
upon legal matters, upon an opinion of, or representations by, counsel,
unless, in any case, such officer has actual knowledge that the certificate
or opinion or representations with respect to the matters upon which such
Officer's Certificate may be based as aforesaid are erroneous.
Any Opinion of Counsel may be based (without further examination
or investigation), insofar as it relates to or is dependent upon factual
matters, information with respect to which is in the possession of the
Company, upon a certificate of, or representations by, an officer or
officers of the Company, unless such counsel has actual knowledge that the
certificate or opinion or representations with respect to the matters upon
which his opinion may be based as aforesaid are erroneous. In addition,
any Opinion of Counsel may be based (without further examination or
investigation), insofar as it relates to or is dependent upon matters
covered in an Opinion of Counsel rendered by other counsel, upon such other
Opinion of Counsel, unless such counsel has actual knowledge that the
Opinion of Counsel rendered by such other counsel with respect to the
matters upon which his Opinion of Counsel may be based as aforesaid are
erroneous. If, in order to render any Opinion of Counsel provided for
herein, the signer thereof shall deem it necessary that additional facts or
matters be stated in any Officer's Certificate provided for herein, then
such certificate may state all such additional facts or matters as the
signer of such Opinion of Counsel may request.
(b) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only
one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such
matters in one or several documents. Where any Person is required to make,
give or execute two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.
(c) Whenever, subsequent to the receipt by the Trustee of any
Board Resolution, Officer's Certificate, Opinion of Counsel or other
document or instrument, a clerical, typographical or other inadvertent or
unintentional error or omission shall be discovered therein, a new document
or instrument may be substituted therefor in corrected form with the same
force and effect as if originally filed in the corrected form and,
irrespective of the date or dates of the actual execution and/or delivery
thereof, such substitute document or instrument shall be deemed to have
been executed and/or delivered as of the date or dates required with
respect to the document or instrument for which it is substituted.
Anything in this Indenture to the contrary notwithstanding, if any such
corrective document or instrument indicates that action has been taken by
or at the request of the Company which could not have been taken had the
original document or instrument not contained such error or omission, the
action so taken shall not be invalidated or otherwise rendered ineffective
but shall be and remain in full force and effect, except to the extent that
such action was a result of willful misconduct or bad faith. Without
limiting the generality of the foregoing, any Securities issued under the
authority of such defective document or instrument shall nevertheless be
the valid obligations of the Company entitled to the benefits provided by
this Indenture equally and ratably with all other Outstanding Securities,
except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, election, waiver or other action provided by this Indenture to be
made, given or taken by Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in
person or by an agent duly appointed in writing or, alternatively, may be
embodied in and evidenced by the record of Holders voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders duly called and held in accordance with the provisions of Article
Twelve, or a combination of such instruments and any such record. Except
as herein otherwise expressly provided, such action shall become effective
when such instrument or instruments or record or both are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and any such record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the
"ACT" of the Holders signing such instrument or instruments and so voting
at any such meeting. Proof of execution of any such instrument or of a
writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and
(subject to Section 801) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section. The record of any
meeting of Holders shall be proved in the manner provided in Section 1206.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof or may be proved in any other manner which the Trustee
and the Company deem sufficient. Where such execution is by a signer
acting in a capacity other than his individual capacity, such certificate
or affidavit shall also constitute sufficient proof of his authority.
(c) The ownership, principal amount (except as otherwise
contemplated in clause (y) of the first proviso to the definition of
Outstanding) and serial numbers of Securities held by any Person, and the
date of holding the same, shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of a Holder shall bind every future
Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
(e) Until such time as written instruments shall have been
delivered to the Trustee with respect to the requisite percentage of prin-
cipal amount of Securities for the action contemplated by such instruments,
any such instrument executed and delivered by or on behalf of a Holder may
be revoked with respect to any or all of such Securities by written notice
by such Holder or any subsequent Holder, proven in the manner in which such
instrument was proven.
(f) Securities of any series, or any Tranche thereof,
authenticated and delivered after any Act of Holders may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as
to any action taken by such Act of Holders. If the Company shall so
determine, new Securities of any series, or any Tranche thereof, so
modified as to conform, in the opinion of the Trustee and the Company, to
such action may be prepared and executed by the Company and authenticated
and delivered by the Trustee in exchange for Outstanding Securities of such
series or Tranche.
(g) The Company may, at its option, by Company Order, fix in
advance a record date for the determination of Holders entitled to give any
request, demand, authorization, direction, notice, consent, waiver or other
Act solicited by the Company, but the Company shall have no obligation to
do so; provided, however, that the Company may not fix a record date for
the giving or making of any notice, declaration, request or direction
referred to in the next sentence. In addition, the Trustee may, at its
option, fix in advance a record date for the determination of Holders of
Securities of any series entitled to join in the giving or making of any
Notice of Default, any declaration of acceleration referred to in Section
702, any request to institute proceedings referred to in Section 707 or any
direction referred to in Section 712, in each case with respect to
Securities of such series. If any such record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act, or
such notice, declaration, request or direction, may be given before or
after such record date, but only the Holders of record at the close of
business on the record date shall be deemed to be Holders for the purposes
of determining (i) whether Holders of the requisite proportion of the
Outstanding Securities have authorized or agreed or consented to such Act
(and for that purpose the Outstanding Securities shall be computed as of
the record date) and/or (ii) which Holders may revoke any such Act
(notwithstanding subsection (e) of this Section); and any such Act, given
as aforesaid, shall be effective whether or not the Holders which
authorized or agreed or consented to such Act remain Holders after such
record date and whether or not the Securities held by such Holders remain
Outstanding after such record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders or other document provided or permitted
by this Indenture to be made upon, given or furnished to, or filed with,
the Trustee by any Holder or by the Company, or the Company by the Trustee
or by any Holder, shall be sufficient for every purpose hereunder (unless
otherwise expressly provided herein) if the same shall be in writing and
delivered personally to an officer or other responsible employee of the
addressee, or transmitted by facsimile transmission, telex or other direct
written electronic means to such telephone number or other electronic
communications address as the parties hereto shall from time to time
designate, or transmitted by registered mail, charges prepaid, to the
applicable address set opposite such party's name below or to such other
address as either party hereto may from time to time designate:
If to the Trustee, to:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Facsimile: (302) 651-1576
If to the Company, to:
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Facsimile: (509) 482-4879
Any communication contemplated herein shall be deemed to have
been made, given, furnished and filed if personally delivered, on the date
of delivery, if transmitted by facsimile transmission, telex or other
direct written electronic means, on the date of transmission, and if
transmitted by registered mail, on the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given, and shall be deemed given, to Holders if in writing and
mailed, first-class postage prepaid, to each Holder affected by such event,
at the address of such Holder as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders by mail, then such notification as shall be made with the approval
of the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of such notice with
respect to other Holders.
Any notice required by this Indenture may be waived in writing by
the Person entitled to receive such notice, either before or after the
event otherwise to be specified therein, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or conflicts
with another provision hereof which is required or deemed to be included in
this Indenture by, or is otherwise governed by, any provision 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 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture and the Table
of Contents are for convenience only and shall not affect the construction
hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities shall
be held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Securities, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder and the Holders and, to the extent provided in Sections 104(a)
and 716, registered holders of Trust Securities (other than Trust
Securities initially issued and sold to the Company) and, so long as the
notice described in Section 1413 shall not have been given, holders of
Senior Indebtedness, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and
construed in accordance with the law of the State of New York (including
without limitation Section 5-1401 of the New York General Obligations Law
or any successor to such statute), except to the extent that the Trust
Indenture Act shall be applicable.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of
the Securities other than a provision in Securities of any series, or any
Tranche thereof, or in the indenture supplemental hereto, Board Resolution
or Officer's Certificate which establishes the terms of the Securities of
such series or Tranche, which specifically states that such provision shall
apply in lieu of this Section) payment of interest or principal and
premium, if any, need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment
Date or Redemption Date, or at the Stated Maturity, and, if such payment is
made or duly provided for on such Business Day, no interest shall accrue on
the amount so payable for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be, to such
Business Day.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The definitive Securities of each series shall be in
substantially the form or forms established in the indenture supplemental
hereto establishing such series, or in a Board Resolution establishing such
series, or in an Officer's Certificate pursuant to such a supplemental
indenture or Board Resolution, in any case with such appropriate
insertions, omissions, substitutions and other variations as are required
or permitted by this Indenture, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. If the form
or forms of Securities of any series are established in a Board Resolution
or in an Officer's Certificate pursuant to a Board Resolution, such Board
Resolution and Officer's Certificate, if any, shall be delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by
Section 303 for the authentication and delivery of such Securities.
The Securities of each series shall be issuable in registered
form without coupons. The definitive Securities shall be produced in such
manner as shall be determined by the officers executing such Securities, as
evidenced by their execution thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in
substantially the form set forth below:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
_________________________________
as Trustee
By: _____________________________
Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. Subject to
the last paragraph of this Section, prior to the authentication and
delivery of Securities of any series there shall be established by
specification in a supplemental indenture or in a Board Resolution, or in
an Officer's Certificate pursuant to a supplemental indenture or a Board
Resolution:
(a) the title of the Securities of such series (which shall
distinguish the Securities of such series from Securities of all
other series);
(b) any limit upon the aggregate principal amount of the
Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of such series
pursuant to Section 304, 305, 306, 406 or 1106 and except for any
Securities which, pursuant to Section 303, are deemed never to
have been authenticated and delivered hereunder);
(c) the Persons (without specific identification) to whom
interest on Securities of such series, or any Tranche thereof,
shall be payable, if other than the Persons in whose names such
Securities (or one or more Predecessor Securities) are registered
at the close of business on the Regular Record Date for such
interest;
(d) the date or dates on which the principal of the
Securities of such series, or any Tranche thereof, is payable or
any formulary or other method or other means by which such date
or dates shall be determined, by reference to an index or other
fact or event ascertainable outside of this Indenture or
otherwise (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension); and the right,
if any, to extend the Maturity of the Securities of such series,
or any Tranche thereof, and the duration of any such extension;
(e) the rate or rates at which the Securities of such
series, or any Tranche thereof, shall bear interest, if any
(including the rate or rates at which overdue principal shall
bear interest, if different from the rate or rates at which such
Securities shall bear interest prior to Maturity, and, if
applicable, the rate or rates at which overdue premium or
interest shall bear interest, if any), or any formulary or other
method or other means by which such rate or rates shall be
determined, by reference to an index or other fact or event
ascertainable outside of this Indenture or otherwise; the date or
dates from which such interest shall accrue; the Interest Payment
Dates on which such interest shall be payable and the Regular
Record Date, if any, for the interest payable on such Securities
on any Interest Payment Date; the basis of computation of
interest, if other than as provided in Section 310; and the
right, if any, to extend the interest payment periods and the
duration of any such extension;
(f) the place or places at which and/or the methods (if
other than as provided elsewhere in this Indenture) by which (i)
the principal of and premium, if any, and interest, if any, on
Securities of such series, or any Tranche thereof, shall be
payable, (ii) registration of transfer of Securities of such
series, or any Tranche thereof, may be effected, (iii) exchanges
of Securities of such series, or any Tranche thereof, may be
effected and (iv) notices and demands to or upon the Company in
respect of the Securities of such series, or any Tranche thereof,
and this Indenture may be served; the Security Registrar and any
Paying Agent or Agents for such series or Tranche; and, if such
is the case, that the principal of such Securities shall be
payable without the presentment or surrender thereof;
(g) the period or periods within which or the date or dates
on which, the price or prices at which and the terms and
conditions upon which the Securities of such series, or any
Tranche thereof, may be redeemed, in whole or in part, at the
option of the Company;
(h) the obligation or obligations, if any, of the Company
to redeem or purchase the Securities of such series, or any
Tranche thereof, pursuant to any sinking fund or other mandatory
redemption provisions or at the option of a Holder thereof and
the period or periods within which or the date or dates on which,
the price or prices at which and the terms and conditions upon
which such Securities shall be redeemed or purchased, in whole or
in part, pursuant to such obligation, and applicable exceptions
to the requirements of Section 404 in the case of mandatory
redemption or redemption at the option of the Holder;
(i) the denominations in which Securities of such series,
or any Tranche thereof, shall be issuable if other than
denominations of One Thousand Dollars ($1,000) and any integral
multiple thereof (in the case of Securities issued to a
Washington Water Power Trust or a trustee of such trust in
connection with the issuance of Trust Securities by such
Washington Water Power Trust, the denomination in which such
Securities shall be issuable if other than denominations of
Twenty-Five Dollars ($25) and any integral multiple thereof);
(j) the currency or currencies, including composite
currencies, in which payment of the principal of and premium, if
any, and interest, if any, on the Securities of such series, or
any Tranche thereof, shall be payable (if other than in Dollars);
(k) if the principal of or premium, if any, or interest, if
any, on the Securities of such series, or any Tranche thereof,
are to be payable, at the election of the Company or a Holder
thereof, in a coin or currency other than that in which the
Securities are stated to be payable, the period or periods within
which, and the terms and conditions upon which, such election may
be made;
(l) if the principal of or premium, if any, or interest, if
any, on the Securities of such series, or any Tranche thereof,
are to be payable, or are to be payable at the election of the
Company or a Holder thereof, in securities or other property, the
type and amount of such securities or other property, or the
formulary or other method or other means by which such amount
shall be determined, and the period or periods within which, and
the terms and conditions upon which, any such election may be
made;
(m) if the amount payable in respect of the principal of or
premium, if any, or interest, if any, on the Securities of such
series, or any Tranche thereof, may be determined with reference
to an index or other fact or event ascertainable outside of this
Indenture, the manner in which such amounts shall be determined
(to the extent not established pursuant to clause (e) of this
paragraph);
(n) if other than the principal amount thereof, the portion
of the principal amount of Securities of such series, or any
Tranche thereof, which shall be payable upon declaration of ac-
celeration of the Maturity thereof pursuant to Section 702;
(o) the terms, if any, pursuant to which the Securities of
such series, or any Tranche thereof, may be converted into or
exchanged for shares of capital stock or other securities of the
Company or any other Person;
(p) the obligations or instruments, if any, which shall be
considered to be Eligible Obligations in respect of the
Securities of such series, or any Tranche thereof, denominated in
a currency other than Dollars or in a composite currency, and any
additional or alternative provisions for the reinstatement of the
Company's indebtedness in respect of such Securities after the
satisfaction and discharge thereof as provided in Section 601;
(q) if the Securities of such series, or any Tranche
thereof, are to be issued in global form, (i) any limitations on
the rights of the Holder or Holders of such Securities to
transfer or exchange the same or to obtain the registration of
transfer thereof, (ii) any limitations on the rights of the
Holder or Holders thereof to obtain certificates therefor in
definitive form in lieu of temporary form and (iii) any and all
other matters incidental to such Securities;
(r) if the Securities of such series, or any Tranche
thereof, are to be issuable as bearer securities, any and all
matters incidental thereto which are not specifically addressed
in a supplemental indenture as contemplated by clause (f) of
Section 1101;
(s) to the extent not established pursuant to clause (q) of
this paragraph, any limitations on the rights of the Holders of
the Securities of such Series, or any Tranche thereof, to
transfer or exchange such Securities or to obtain the
registration of transfer thereof; and if a service charge will be
made for the registration of transfer or exchange of Securities
of such series, or any Tranche thereof, the amount or terms
thereof;
(t) any exceptions to Section 113, or variation in the
definition of Business Day, with respect to the Securities of
such series, or any Tranche thereof; and
(u) any other terms of the Securities of such series, or
any Tranche thereof.
With respect to Securities of a series subject to a Periodic
Offering, the indenture supplemental hereto or the Board Resolution which
establishes such series, or the Officer's Certificate pursuant to such
supplemental indenture or Board Resolution, as the case may be, may provide
general terms or parameters for Securities of such series and provide
either that the specific terms of Securities of such series, or any Tranche
thereof, shall be specified in a Company Order or that such terms shall be
determined by the Company or its agents in accordance with procedures
specified in a Company Order as contemplated by clause (b) of Section 303.
Anything herein to the contrary notwithstanding, the Trustee
shall be under no obligation to authenticate and deliver Securities of any
series the terms of which, established as contemplated by this Section,
would affect the rights, duties, obligations, liabilities or immunities of
the Trustee under this Indenture or otherwise.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, the Securities
of each series shall be issuable in denominations of One Thousand Dollars
($1,000) and any integral multiple thereof (in the case of securities
issued to a Washington Water Power Trust or a trustee of such trust in
connection with the issuance of Trust Securities by such Washington Water
Power Trust, the Securities of each series shall be issuable in
denominations of Twenty-Five Dollars ($25) and any integral multiple
thereof).
SECTION 303. EXECUTION, DATING, CERTIFICATE OF AUTHENTICATION.
Unless otherwise provided as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, the Securities
shall be executed on behalf of the Company by an Authorized Officer, and
may have the corporate seal of the Company affixed thereto or reproduced
thereon and attested by any other Authorized Officer. The signature of any
or all of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time of execution Authorized Officers of the
Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication
and delivery of such Securities or did not hold such offices at the date of
such Securities.
The Trustee shall authenticate and deliver Securities of a
series, for original issue, at one time or from time to time in accordance
with the Company Order referred to below, upon receipt by the Trustee of:
(a) the instrument or instruments establishing the form or
forms and terms of such series, as provided in Sections 201 and
301;
(b) a Company Order requesting the authentication and
delivery of such Securities and, to the extent that the terms of
such Securities shall not have been established in an indenture
supplemental hereto or in a Board Resolution, or in an Officer's
Certificate pursuant to a supplemental indenture or Board
Resolution, all as contemplated by Sections 201 and 301, either
(i) establishing such terms or (ii) in the case of Securities of
a series subject to a Periodic Offering, specifying procedures,
acceptable to the Trustee, by which such terms are to be
established (which procedures may provide for authentication and
delivery pursuant to oral or electronic instructions from the
Company or any agent or agents thereof, which oral instructions
are to be promptly confirmed electronically or in writing), in
either case in accordance with the instrument or instruments
delivered pursuant to clause (a) above;
(c) the Securities of such series, executed on behalf of
the Company by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) the form or forms of such Securities have been
duly authorized by the Company and have been established in
conformity with the provisions of this Indenture;
(ii) the terms of such Securities have been duly
authorized by the Company and have been established in
conformity with the provisions of this Indenture; and
(iii) when such Securities shall have been
authenticated and delivered by the Trustee and issued and
delivered by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, such
Securities will constitute valid obligations of the Company,
entitled to the benefits provided by this Indenture equally
and ratably with all other Securities then Outstanding;
provided, however, that, with respect to Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to
receive such Opinion of Counsel only once at or prior to the time
of the first authentication and delivery of such Securities
(provided that such Opinion of Counsel addresses the
authentication and delivery of all Securities of such series) and
that, in lieu of the opinions described in clauses (ii) and (iii)
above, Counsel may opine that:
(x) when the terms of such Securities shall have been
established pursuant to a Company Order or Orders or
pursuant to such procedures as may be specified from time to
time by a Company Order or Orders, all as contemplated by
and in accordance with the instrument or instruments
delivered pursuant to clause (a) above, such terms will have
been duly authorized by the Company and will have been
established in conformity with the provisions of this
Indenture; and
(y) when such Securities shall have been authenticated
and delivered by the Trustee in accordance with this
Indenture and the Company Order or Orders or the specified
procedures referred to in paragraph (x) above and issued and
delivered by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, such
Securities will constitute valid obligations of the Company,
entitled to the benefits provided by this Indenture equally
and ratably with all other Securities then Outstanding.
With respect to Securities of a series subject to a Periodic
Offering, the Trustee may conclusively rely, as to the authorization by the
Company of any of such Securities, the forms and terms thereof, the
validity thereof and the compliance of the authentication and delivery
thereof with the terms and conditions of this Indenture, upon the Opinion
or Opinions of Counsel and the certificates and other documents delivered
pursuant to this Article at or prior to the time of the first
authentication and delivery of Securities of such series until any of such
opinions, certificates or other documents have been superseded or revoked
or expire by their terms. In connection with the authentication and
delivery of Securities of a series subject to a Periodic Offering, the
Trustee shall be entitled to assume that the Company's instructions to
authenticate and deliver such Securities do not violate any applicable law
or any applicable rule, regulation or order of any Governmental Authority
having jurisdiction over the Company.
If the form of terms of the Securities of any series have been
established by or pursuant to a Board Resolution or an Officer's
Certificate as permitted by Sections 201 or 301, the Trustee shall not be
required to authenticate such Securities if the issuance of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, each Security
shall be dated the date of its authentication.
Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, or any Tranche thereof, no Security
shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or an Authenticating Agent by manual signature of
an authorized officer thereof, and such certificate upon any Security shall
be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder and is entitled to the benefits
of this Indenture. Notwithstanding the foregoing, if (a) any Security
shall have been authenticated and delivered hereunder to the Company, or
any Person acting on its behalf, but shall never have been issued and sold
by the Company, (b) the Company shall deliver such Security to the Security
Registrar for cancellation or shall cancel such Security and deliver
evidence of such cancellation to the Trustee, in each case as provided in
Section 309, and (c) the Company, at its election, shall deliver to the
Trustee a written statement (which need not comply with Section 102 and
need not be accompanied by an Officer's Certificate or an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, then, for all purposes of this Indenture, such Security shall be
deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits hereof.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series,
or any Tranche thereof, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed, photocopied or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, with such
appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities; provided, however, that temporary Securities
need not recite specific redemption, sinking fund, conversion or exchange
provisions.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, after the
preparation of definitive Securities of such series or Tranche, the
temporary Securities of such series or Tranche shall be exchangeable,
without charge to the Holder thereof, for definitive Securities of such
series or Tranche upon surrender of such temporary Securities at the office
or agency of the Company maintained pursuant to Section 502 in a Place of
Payment for such Securities. Upon such surrender of temporary Securities,
the Company shall, except as aforesaid, execute and the Trustee shall
authenticate and deliver in exchange therefor definitive Securities of the
same series and Tranche, of authorized denominations and of like tenor and
aggregate principal amount.
Until exchanged in full as hereinabove provided, temporary
Securities shall in all respects be entitled to the same benefits under
this Indenture as definitive Securities of the same series and Tranche and
of like tenor authenticated and delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept in one of the offices
designated pursuant to Section 502, with respect to the Securities of each
series, or any Tranche thereof, a register (the "SECURITY REGISTER") in
which, subject to such reasonable regulations as it may prescribe, the Com-
pany shall provide for the registration of Securities of such series or
Tranche and the registration of transfer thereof. The Company shall
designate one Person to maintain the Security Register for the Securities
of each series and such Person is referred to herein, with respect to such
series, as the "SECURITY REGISTRAR". Anything herein to the contrary
notwithstanding, the Company may designate one or more of its offices as an
office in which a register with respect to the Securities of one or more
series, or any Tranche or Tranches thereof, shall be maintained, and the
Company may designate itself the Security Registrar with respect to one or
more of such series. The Security Register shall be open for inspection by
the Trustee and the Company at all reasonable times.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, upon
surrender for registration of transfer of any Security of such series or
Tranche at the office or agency of the Company maintained pursuant to
Section 502 in a Place of Payment for such series or Tranche, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Securities of
the same series and Tranche, of authorized denominations and of like tenor
and aggregate principal amount.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, any
Security of such series or Tranche may be exchanged at the option of the
Holder, for one or more new Securities of the same series and Tranche, of
authorized denominations and of like tenor and aggregate principal amount,
upon surrender of the Securities to be exchanged at any such office or
agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities delivered upon any registration of transfer or
exchange of Securities shall be valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer
or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Trustee
or the Security Registrar) be duly endorsed or shall be accompanied by a
written instrument of transfer in form satisfactory to the Company, the
Trustee or the Security Registrar, as the case may be, duly executed by the
Holder thereof or his attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section 301 with
respect to Securities of any series, or any Tranche thereof, no service
charge shall be made for any registration of transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities,
other than exchanges pursuant to Section 304, 406 or 1106 not involving any
transfer.
The Company shall not be required to execute or to provide for
the registration of transfer of or the exchange of (a) Securities of any
series, or any Tranche thereof, during a period of fifteen (15) days
immediately preceding the date notice is to be given identifying the serial
numbers of the Securities of such series or Tranche called for redemption
or (b) any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in ex-
change therefor a new Security of the same series and Tranche, and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the ownership of and the destruction,
loss or theft of any Security and (b) such security or indemnity as may be
reasonably required by them to save each of them and any agent of either of
them harmless, then, in the absence of notice to the Company or the Trustee
that such Security is held by a Person purporting to be the owner of such
Security, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new
Security of the same series and Tranche, and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
Notwithstanding the foregoing, in case any such mutilated,
destroyed, lost or stolen Security has become or is about to become due and
payable, the Company in its discretion may, but subject to compliance with
the foregoing conditions, instead of issuing a new Security, pay such
Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Security of any series issued pursuant to this Section
in lieu of any destroyed, lost or stolen Security shall constitute an
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone other than the Holder of such new Security, and any such new
Security shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of such series duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, interest
on any Security which is payable, and is punctually paid or duly provided
for, on any Interest Payment Date shall be paid to the Person in whose name
that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date,
including without limitation interest the payment period for which has been
extended as specified with respect to such series as contemplated by
Section 301 (herein called "UNPAID INTEREST"), shall forthwith cease to be
payable to the Holder on the related Regular Record Date by virtue of
having been such Holder, and such Unpaid Interest may be paid by the
Company, at its election in each case, as provided in clause (a) or (b)
below:
(a) The Company may elect to make payment of any Unpaid
Interest to the Persons in whose names the Securities of such
series (or their respective Predecessor Securities) are
registered at the close of business on a date (herein called a
"SPECIAL RECORD DATE") for the payment of such Unpaid Interest,
which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Unpaid Interest
proposed to be paid on each Security of such series and the date
of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggre-
gate amount proposed to be paid in respect of such Unpaid
Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the
Persons entitled to such Unpaid Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Unpaid Interest which shall be not more
than thirty (30) days and not less than ten (10) days prior to
the date of the proposed payment and not less than twenty-five
(25) days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense
of the Company, shall, not less than fifteen (15) days prior to
such Special Record Date, cause notice of the proposed payment of
such Unpaid Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities
of such series at the address of such Holder as it appears in the
Security Register. Notice of the proposed payment of such Unpaid
Interest and the Special Record Date therefor having been so
mailed, such Unpaid Interest shall be paid to the Persons in
whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business
on such Special Record Date.
(b) The Company may make payment of any Unpaid Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which such Securities may be listed, and upon such notice as may
be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section and Section
305, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry
the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Security is registered as
the absolute owner of such Security for the purpose of receiving payment of
principal of and premium, if any, and (subject to Sections 305 and 307)
interest, if any, on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 309. CANCELLATION BY SECURITY REGISTRAR.
All Securities surrendered for payment, redemption, registration
of transfer or exchange shall, if surrendered to any Person other than the
Security Registrar, be delivered to the Security Registrar and, if not
theretofore canceled, shall be promptly canceled by the Security Registrar.
The Company may at any time deliver to the Security Registrar for
cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever or
which the Company shall not have issued and sold, and all Securities so
delivered shall be promptly canceled by the Security Registrar. All
canceled Securities held by the Security Registrar shall be disposed of in
accordance with a Company Order delivered to the Security Registrar and the
Trustee, and the Security Registrar shall promptly deliver a certificate of
disposition to the Trustee and the Company unless, by a Company Order,
similarly delivered, the Company shall direct that canceled Securities be
returned to it. The Security Registrar shall promptly deliver evidence of
any cancellation of a Security in accordance with this Section 309 to the
Trustee and the Company.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, or any Tranche thereof, interest on the
Securities of each series shall be computed on the basis of a three hundred
sixty (360) day year consisting of twelve (12) thirty (30) day months and,
with respect to any period less than a full calendar month, on the basis of
the actual number of days elapsed during such period.
SECTION 311. PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Securities of any series, or any Tranche
thereof, denominated in any currency other than Dollars or in a composite
currency (the "REQUIRED CURRENCY"), except as otherwise specified with
respect to such Securities as contemplated by Section 301, the obligation
of the Company to make any payment of the principal thereof, or the
premium, if any, or interest, if any, thereon, shall not be discharged or
satisfied by any tender by the Company, or recovery by the Trustee, in any
currency other than the Required Currency, except to the extent that such
tender or recovery shall result in the Trustee timely holding the full
amount of the Required Currency then due and payable. If any such tender
or recovery is in a currency other than the Required Currency, the Trustee
may take such actions as it considers appropriate to exchange such currency
for the Required Currency. The costs and risks of any such exchange,
including without limitation the risks of delay and exchange rate fluctua-
tion, shall be borne by the Company, the Company shall remain fully liable
for any shortfall or delinquency in the full amount of Required Currency
then due and payable, and in no circumstances shall the Trustee be liable
therefor except in the case of its negligence or willful misconduct.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series, or any Tranche thereof, which are
redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by
Section 301 for Securities of such series or Tranche) in accordance with
this Article.
SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or an Officer's Certificate. The Company
shall, at least forty-five (45) days prior to the Redemption Date fixed by
the Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee in writing of such Redemption Date and of the principal
amount of such Securities to be redeemed. In the case of any redemption of
Securities (a) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture or (b) pursuant to an election of the Company which is subject to
a condition specified in the terms of such Securities, the Company shall
furnish the Trustee with an Officer's Certificate evidencing compliance
with such restriction or condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series, or any Tranche
thereof, are to be redeemed, the particular Securities to be redeemed shall
be selected by the Security Registrar from the Outstanding Securities of
such series or Tranche not previously called for redemption, by such method
as shall be provided for any particular series or Tranche, or, in the
absence of any such provision, by such method of random selection as the
Security Registrar shall deem fair and appropriate and which may, in any
case, provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of such series or Tranche or
any integral multiple thereof) of the principal amount of Securities of
such series or Tranche having a denomination larger than the minimum
authorized denomination for Securities of such series or Tranche; provided,
however, that if, as indicated in an Officer's Certificate, the Company
shall have offered to purchase all or any principal amount of the
Securities then Outstanding of any series, or any Tranche thereof, and less
than all of such Securities as to which such offer was made shall have been
tendered to the Company for such purchase, the Security Registrar, if so
directed by Company Order, shall select for redemption all or any principal
amount of such Securities which have not been so tendered.
The Security Registrar shall promptly notify the Company and the
Trustee in writing of the Securities selected for redemption and, in the
case of any Securities selected to be redeemed in part, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 404. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in
Section 106 to the Holders of the Securities to be redeemed not less than
thirty (30) nor more than sixty (60) days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Securities of any series or
Tranche are to be redeemed, the identification of the particular
Securities to be redeemed and the portion of the principal amount
of any Security to be redeemed in part,
(d) that on the Redemption Date the Redemption Price,
together with accrued interest, if any, to the Redemption Date,
will become due and payable upon each such Security to be
redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date,
(e) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued
interest, if any, unless it shall have been specified as
contemplated by Section 301 with respect to such Securities that
such surrender shall not be required,
(f) that the redemption is for a sinking or other fund, if
such is the case, and
(g) such other matters as the Company shall deem desirable
or appropriate.
With respect to any notice of redemption of Securities at the
election of the Company, unless, upon the giving of such notice, such
Securities shall be deemed to have been paid in accordance with Section
601, such notice may state that such redemption shall be conditional upon
the receipt by the Paying Agent or Agents for such Securities, on or prior
to the date fixed for such redemption, of money sufficient to pay the
principal of and premium, if any, and interest, if any, on such Securities
and that if such money shall not have been so received such notice shall be
of no force or effect and the Company shall not be required to redeem such
Securities. In the event that such notice of redemption contains such a
condition and such money is not so received, the redemption shall not be
made and within a reasonable time thereafter notice shall be given, in the
manner in which the notice of redemption was given, that such money was not
so received and such redemption was not required to be made, and the Paying
Agent or Agents for the Securities otherwise to have been redeemed shall
promptly return to the Holders thereof any of such Securities which had
been surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the election
of the Company, and any notice of non-satisfaction of a condition for
redemption as aforesaid, shall be given by the Company or, at the Company's
request, by the Security Registrar in the name and at the expense of the
Company. Notice of mandatory redemption of Securities shall be given by
the Security Registrar in the name and at the expense of the Company.
SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the
Securities or portions thereof so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price therein specified, and
from and after such date (unless, in the case of an unconditional notice of
redemption, the Company shall default in the payment of the Redemption
Price and accrued interest, if any) such Securities or portions thereof, if
interest-bearing, shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with such notice, such Security or
portion thereof shall be paid by the Company at the Redemption Price,
together with accrued interest, if any, to the Redemption Date; provided,
however, that no such surrender shall be a condition to such payment if so
specified as contemplated by Section 301 with respect to such Security; and
provided, further, that, except as otherwise specified as contemplated by
Section 301 with respect to such Security, any installment of interest on
any Security the Stated Maturity of which installment is on or prior to the
Redemption Date shall be payable to the Holder of such Security, or one or
more Predecessor Securities, registered as such at the close of business on
the related Regular Record Date according to the terms of such Security and
subject to the provisions of Section 307.
SECTION 406. SECURITIES REDEEMED IN PART.
Upon the surrender of any Security which is to be redeemed only
in part at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder
of such Security, without service charge, a new Security or Securities of
the same series and Tranche, of any authorized denomination requested by
such Holder and of like tenor and in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security
so surrendered.
ARTICLE FIVE
COVENANTS
SECTION 501. PAYMENT OF SECURITIES.
The Company shall pay the principal of and premium, if any, and
interest, if any, on the Securities of each series in accordance with the
terms of such Securities and this Indenture.
SECTION 502. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for the
Securities of each series, or any Tranche thereof, an office or agency
where payment of such Securities shall be made, where the registration of
transfer or exchange of such Securities may be effected and where notices
and demands to or upon the Company in respect of such Securities and this
Indenture may be served. The Company shall give prompt written notice to
the Trustee of the location, and any change in the location, of each such
office or agency and prompt notice to the Holders of any such change in the
manner specified in Section 106. If at any time the Company shall fail to
maintain any such required office or agency in respect of Securities of any
series, or any Tranche thereof, or shall fail to furnish the Trustee with
the address thereof, payment of such Securities shall be made, registration
of transfer or exchange thereof may be effected and notices and demands in
respect thereof may be served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent for all such
purposes in any such event.
The Company may also from time to time designate one or more
other offices or agencies with respect to the Securities of one or more
series, or any Tranche thereof, for any or all of the foregoing purposes
and may from time to time rescind such designations; provided, however,
that, unless otherwise specified as contemplated by Section 301 with
respect to the Securities of such series or Tranche, no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency for such purposes in each Place of Payment for
such Securities in accordance with the requirements set forth above. The
Company shall give prompt written notice to the Trustee, and prompt notice
to the Holders in the manner specified in Section 106, of any such
designation or rescission and of any change in the location of any such
other office or agency.
Anything herein to the contrary notwithstanding, any office or
agency required by this Section may be maintained at an office of the
Company, in which event the Company shall perform all functions to be
performed at such office or agency.
SECTION 503. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to the Securities of any series, or any Tranche thereof, it shall,
on or before each due date of the principal of and premium, if any, and
interest, if any, on any of such Securities, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal and premium or interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein provided. The
Company shall promptly notify the Trustee of any failure by the Company (or
any other obligor on such Securities) to make any payment of principal of
or premium, if any, or interest, if any, on such Securities.
Whenever the Company shall have one or more Paying Agents for the
Securities of any series, or any Tranche thereof, it shall, on or before
each due date of the principal of and premium, if any, and interest, if
any, on such Securities, deposit with such Paying Agents sums sufficient
(without duplication) to pay the principal and premium or interest so
becoming due, such sums to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company shall promptly notify the Trustee of any
failure by it so to act.
The Company shall cause each Paying Agent for the Securities of
any series, or any Tranche thereof, other than the Company or the Trustee,
to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent shall:
(a) hold all sums held by it for the payment of the
principal of and premium, if any, or interest, if any, on such
Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the Company
(or any other obligor upon such Securities) to make any payment
of principal of or premium, if any, or interest, if any, on such
Securities; and
(c) at any time during the continuance of any such failure,
upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent and
furnish to the Trustee such information as it possesses regarding
the names and addresses of the Persons entitled to such sums.
The Company may at any time pay, or by Company Order direct any
Paying Agent to pay, to the Trustee all sums held in trust by the Company
or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or such
Paying Agent and, if so stated in a Company Order delivered to the Trustee,
in accordance with the provisions of Article Six; and, upon such payment by
any Paying Agent to the Trustee, such Paying Agent shall be released from
all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of and
premium, if any, or interest, if any, on any Security and remaining
unclaimed for two years after such principal and premium, if any, or
interest, if any, has become due and payable shall be paid to the Company
on Company Request, or, if then held by the Company, shall be discharged
from such trust; and, upon such payment or discharge, the Holder of such
Security shall, as an unsecured general creditor and not as the Holder of
an Outstanding Security, look only to the Company for payment of the amount
so due and payable and remaining unpaid (subject, however, to the
provisions of Article Fourteen), and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
payment to the Company, may at the expense of the Company cause to be
mailed, on one occasion only, notice to such Holder that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than thirty (30) days from the date of such mailing, any unclaimed balance
of such money then remaining will be paid to the Company.
SECTION 504. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article Ten, the
Company shall do or cause to be done all things necessary to preserve and
keep its corporate existence in full force and effect.
SECTION 505. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) all its properties
used or useful in the conduct of its businesses, considered as a whole, to
be maintained and kept in good condition, repair and working order and
shall cause (or, with respect to property owned in common with others, make
reasonable effort to cause) to be made such repairs, renewals,
replacements, betterments and improvements thereof, as, in the judgment of
the Company, may be necessary in order that the operation of such
properties, considered as a whole, may be conducted in accordance with
common industry practice; provided, however, that nothing in this Section
shall prevent the Company from discontinuing, or causing the discontinuance
of, the operation and maintenance of any of its properties; and provided,
further, that nothing in this Section shall prevent the Company from
selling, transferring or otherwise disposing of, or causing the sale,
transfer or other disposition of, any of its properties.
SECTION 506. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with
any term, provision or condition set forth in
(a) any covenant or restriction specified with respect to
the Securities of any series, or any Tranche thereof, as
contemplated by Section 301 if before the time for such
compliance the Holders of a majority in aggregate principal
amount of the Outstanding Securities of all series and Tranches
with respect to which compliance with such covenant or
restriction is to be omitted, considered as one class, shall, by
Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision
or condition; provided, however, that no such waiver shall be
effective as to any matters contemplated in clause (a), (b) or
(c) in Section 1102 without consent of the Holders specified in
such Section; and
(b) Section 504 or 505 or Article Ten if before the time
for such compliance the Holders of a majority in principal amount
of Securities Outstanding under this Indenture shall, by Act of
such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or
condition;
but, in either case, no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect; provided, however, so long as a
Washington Water Power Trust holds Securities of any series, such trust may
not waive compliance or waive any default in compliance by the Company with
any covenant or other term contained in this Indenture or the Securities of
such series without the approval of the holders of a majority in aggregate
liquidation amount of the outstanding Trust Securities issued by such trust
(other than Trust Securities initially issued and sold to the Company),
obtained as provided in the Declaration establishing such trust.
SECTION 507. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than December 1 in each year, commencing December 1,
____, the Company shall deliver to the Trustee an Officer's Certificate
which need not comply with Section 102, executed by the principal executive
officer, the principal financial officer or the principal accounting
officer of the Company, as to such officer's knowledge of the Company's
compliance with all conditions and covenants under this Indenture, such
compliance to be determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 508. RESTRICTION ON PAYMENT OF DIVIDENDS, ETC.
If, at any time (a) there shall have occurred and be continuing
an Event of Default described in clause (a) or (b) of Section 701 with
respect to the Securities of any series, (b) the Company shall have elected
to extend any interest payment period as specified with respect to the
Securities of any series, or any Tranche thereof, as contemplated by
Section 301 and any such period, as so extended, shall be continuing, or
(c) the Company shall be in default in respect of its payment or other
obligations under the Guarantee relating to any Trust Securities (other
than Trust Securities initially issued and sold to the Company), then the
Company shall not (x) declare or pay any dividend on, make any distribution
or liquidation payment with respect to, or redeem or purchase any of its
capital stock, (y) make any payment of principal, premium, if any, or
interest, if any, on or repay, repurchase or redeem any debt securities
(including other Securities) that rank pari passu with or junior in right
of payment to the Securities and (z) make any guarantee payments with
respect to any of the foregoing (other than payments under the Guarantee
relating to any of such Trust Securities); provided, however, that nothing
in this Section shall be deemed to prohibit (i) dividends or distributions
payable in shares of the Company's capital stock, (ii) reclassification of
the Company's capital stock or exchange or conversion of shares of one
class or series of the Company's capital stock into shares of another class
or series of the Company's capital stock, (iii) purchases or other
acquisitions of fractional interests in shares of the Company's capital
stock and (iv) redemption, purchases or other acquisitions of the Company's
capital stock in connection with the satisfaction by the Company of its
obligations, under provisions of the Company's Restated Articles of
Incorporation, as amended, under any direct purchase, dividend
reinvestment, customer purchase or employee benefit plans or under any
contract or security requiring the Company to purchase shares of its
capital stock.
SECTION 509. WASHINGTON WATER POWER TRUSTS.
If Securities of any series are issued and delivered to a
Washington Water Power Trust (or a trustee thereof) in connection with the
issuance by such trust of Trust Securities, so long as such Trust
Securities remain outstanding the Company shall (a) maintain 100% direct
ownership, by the Company or any Affiliate thereof, of the Trust Securities
initially issued and sold to the Company by such Washington Water Power
Trust, except as otherwise provided in Section 1005, and (b) use all
reasonable efforts to cause such Washington Water Power Trust (i) to
maintain its existence as a business trust, except in connection with a
distribution of Securities, with the redemption, purchase or other
acquisition and retirement of all Trust Securities of such trust or with
certain mergers, consolidations or other business combinations, in each
case as permitted by the Declaration establishing such Washington Water
Power Trust, and (ii) to otherwise continue not to be treated as an
association taxable as a corporation for United States federal income tax
purposes.
ARTICLE SIX
SATISFACTION AND DISCHARGE
SECTION 601. SATISFACTION AND DISCHARGE OF SECURITIES.
Any Security or Securities, or any portion of the principal
amount thereof, shall be deemed to have been paid for all purposes of this
Indenture, and the entire indebtedness of the Company in respect thereof
shall be satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee or any Paying Agent (other than the Company), in
trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the Maturity of
such Securities or portions thereof, Eligible Obligations, which
shall not contain provisions permitting the redemption or other
prepayment thereof at the option of the issuer thereof, the
principal of and the interest on which when due, without any
regard to reinvestment thereof, will provide moneys which,
together with the money, if any, deposited with or held by the
Trustee or such Paying Agent, shall be sufficient, or
(c) a combination of (a) or (b) which shall be sufficient,
to pay when due the principal of and premium, if any, and interest, if any,
due and to become due on such Securities or portions thereof; provided,
however, that in the case of the provision for payment or redemption of
less than all the Securities of any series or Tranche, such Securities or
portions thereof shall have been selected by the Security Registrar as
provided herein and, in the case of a redemption, the notice requisite to
the validity of such redemption shall have been given or irrevocable
authority shall have been given by the Company to the Trustee to give such
notice, under arrangements satisfactory to the Trustee; and provided,
further, that the Company shall have delivered to the Trustee and such
Paying Agent:
(x) if such deposit shall have been made prior to the
Maturity of such Securities, a Company Order stating that the
money and Eligible Obligations deposited in accordance with this
Section shall be held in trust, as provided in Section 603;
(y) if Eligible Obligations shall have been deposited, an
Opinion of Counsel to the effect that such obligations constitute
Eligible Obligations and do not contain provisions permitting the
redemption or other prepayment thereof at the option of the
issuer thereof, and an opinion of an independent public
accountant of nationally recognized standing, selected by the
Company, to the effect that the other requirements set forth in
clause (b) above have been satisfied; and
(z) if such deposit shall have been made prior to the
Maturity of such Securities, an Officer's Certificate stating the
Company's intention that, upon delivery of such Officer's
Certificate, its indebtedness in respect of such Securities or
portions thereof will have been satisfied and discharged as
contemplated in this Section.
Upon the deposit of money or Eligible Obligations, or both, in
accordance with this Section, together with the documents required by
clauses (x), (y) and (z) above, the Trustee shall, upon Company Request,
acknowledge in writing that such Securities or portions thereof are deemed
to have been paid for all purposes of this Indenture and that the entire
indebtedness of the Company in respect thereof has been satisfied and
discharged as contemplated in this Section. In the event that all of the
conditions set forth in the preceding paragraph shall have been satisfied
in respect of any Securities or portions thereof except that, for any
reason, the Officer's Certificate specified in clause (z) (if otherwise
required) shall not have been delivered, such Securities or portions
thereof shall nevertheless be deemed to have been paid for all purposes of
this Indenture, and the Holders of such Securities or portions thereof
shall nevertheless be no longer entitled to the benefits provided by this
Indenture or of any of the covenants of the Company under Article Five
(except the covenants contained in Sections 502 and 503) or any other
covenants made in respect of such Securities or portions thereof as
contemplated by Section 301, but the indebtedness of the Company in respect
of such Securities or portions thereof shall not be deemed to have been
satisfied and discharged prior to Maturity for any other purpose; and, upon
Company Request, the Trustee shall acknowledge in writing that such
Securities or portions thereof are deemed to have been paid for all
purposes of this Indenture.
If payment at Stated Maturity of less than all of the Securities
of any series, or any Tranche thereof, is to be provided for in the manner
and with the effect provided in this Section, the Security Registrar shall
select such Securities, or portions of principal amount thereof, in the
manner specified by Section 403 for selection for redemption of less than
all the Securities of a series or Tranche.
In the event that Securities which shall be deemed to have been
paid for purposes of this Indenture, and, if such is the case, in respect
of which the Company's indebtedness shall have been satisfied and
discharged, all as provided in this Section, do not mature and are not to
be redeemed within the sixty (60) day period commencing with the date of
the deposit of moneys or Eligible Obligations, as aforesaid, the Company
shall, as promptly as practicable, give a notice, in the same manner as a
notice of redemption with respect to such Securities, to the Holders of
such Securities to the effect that such deposit has been made and the
effect thereof.
Notwithstanding that any Securities shall be deemed to have been
paid for purposes of this Indenture, as aforesaid, the obligations of the
Company and the Trustee in respect of such Securities under Sections 304,
305, 306, 404, 502, 503, 807 and 814 and this Article shall survive.
The Company shall pay, and shall indemnify the Trustee or any
Paying Agent with which Eligible Obligations shall have been deposited as
provided in this Section against, any tax, fee or other charge imposed on
or assessed against such Eligible Obligations or the principal or interest
received in respect of such Eligible Obligations, including, but not
limited to, any such tax payable by any entity deemed, for tax purposes, to
have been created as a result of such deposit.
Anything herein to the contrary notwithstanding, (a) if, at any
time after a Security would be deemed to have been paid for purposes of
this Indenture, and, if such is the case, the Company's indebtedness in
respect thereof would be deemed to have been satisfied and discharged,
pursuant to this Section (without regard to the provisions of this
paragraph), the Trustee or any Paying Agent, as the case may be, shall be
required to return the money or Eligible Obligations, or combination
thereof, deposited with it as aforesaid to the Company or its
representative under any applicable Federal or State bankruptcy, insolvency
or other similar law, such Security shall thereupon be deemed retroactively
not to have been paid and any satisfaction and discharge of the Company's
indebtedness in respect thereof shall retroactively be deemed not to have
been effected, and such Security shall be deemed to remain Outstanding and
(b) any satisfaction and discharge of the Company's indebtedness in respect
of any Security shall be subject to the provisions of the last paragraph of
Section 503.
SECTION 602. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as hereinafter expressly provided), and the Trustee, at the
expense of the Company, shall execute such instruments as the Company shall
reasonably request to evidence and acknowledge the satisfaction and
discharge of this Indenture, when:
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company;
provided, however, that if, in accordance with the last paragraph of
Section 601, any Security, previously deemed to have been paid for purposes
of this Indenture, shall be deemed retroactively not to have been so paid,
this Indenture shall thereupon be deemed retroactively not to have been
satisfied and discharged, as aforesaid, and to remain in full force and
effect, and the Company shall execute and deliver such instruments as the
Trustee shall reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of this Indenture
as aforesaid, the obligations of the Company and the Trustee under Sections
304, 305, 306, 404, 502, 503, 807 and 814 and this Article shall survive.
Upon satisfaction and discharge of this Indenture as provided in
this Section, the Trustee shall turn over to the Company any and all money,
securities and other property then held by the Trustee for the benefit of
the Holders of the Securities (other than money and Eligible Obligations
held by the Trustee pursuant to Section 603) and shall execute and deliver
to the Company such instruments as, in the judgment of the Company, shall
be necessary, desirable or appropriate to effect or evidence the
satisfaction and discharge of this Indenture.
SECTION 603. APPLICATION OF TRUST MONEY.
Neither the Eligible Obligations nor the money deposited pursuant
to Section 601, nor the principal or interest payments on any such Eligible
Obligations, shall be withdrawn or used for any purpose other than, and
shall be held in trust for, the payment of the principal of and premium, if
any, and interest, if any, on the Securities or portions of principal
amount thereof in respect of which such deposit was made, all subject, how-
ever, to the provisions of Section 503; provided, however, that any cash
received from such principal or interest payments on such Eligible
Obligations, if not then needed for such purpose, shall, to the extent
practicable and upon Company Request and delivery to the Trustee of the
documents referred to in clause (y) in the first paragraph of Section 601,
be invested in Eligible Obligations of the type described in clause (b) in
the first paragraph of Section 601 maturing at such times and in such
amounts as shall be sufficient, together with any other moneys and the
proceeds of any other Eligible Obligations then held by the Trustee, to pay
when due the principal of and premium, if any, and interest, if any, due
and to become due on such Securities or portions thereof on and prior to
the Maturity thereof, and interest earned from such reinvestment shall be
paid over to the Company as received, free and clear of any trust, lien or
pledge under this Indenture; and provided, further, that any moneys held in
accordance with this Section on the Maturity of all such Securities in
excess of the amount required to pay the principal of and premium, if any,
and interest, if any, then due on such Securities shall be paid over to the
Company free and clear of any trust, lien or pledge under this Indenture;
and provided, further, that if an Event of Default shall have occurred and
be continuing, moneys to be paid over to the Company pursuant to this
Section shall be held until such Event of Default shall have been waived or
cured.
ARTICLE SEVEN
EVENTS OF DEFAULT; REMEDIES
SECTION 701. EVENTS OF DEFAULT.
"EVENT OF DEFAULT", wherever used herein with respect to the
Securities of any series, means any of the following events which shall
have occurred and be continuing:
(a) failure to pay interest, if any, on any Security of such
series within sixty (60) days after the same becomes due and payable
(whether or not payment is prohibited by the provisions of Article
Fourteen); provided, however, that no such failure shall constitute an
"Event of Default" if the Company shall have made a valid extension of
the interest payment period with respect to the Securities of such
series if so provided with respect to such series as contemplated by
Section 301; or
(b) failure to pay the principal of or premium, if any, on any
Security of such series within three (3) Business Days after its
Maturity (whether or not payment is prohibited by the provisions of
Article Fourteen); provided, however, that no such failure shall
constitute an "Event of Default" if the Company shall have made a
valid extension of the Maturity of the Securities of such series if so
provided with respect to such series as contemplated by Section 301;
or
(c) failure to perform or breach of any covenant or warranty of
the Company in this Indenture (other than a covenant or warranty a
default in the performance of which or breach of which is elsewhere in
this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of one or more
series of Securities other than such series) for a period of ninety
(90) days after there has been given, by registered or certified mail,
to the Company by the Trustee, or to the Company and the Trustee by
the Holders of at least thirty-three per centum (33%) in principal
amount of the Outstanding Securities of such series, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "NOTICE OF DEFAULT" hereunder, unless
the Trustee, or the Trustee and the Holders of a principal amount of
Securities of such series not less than the principal amount of
Securities the Holders of which gave such notice, as the case may be,
shall agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the Trustee and
the Holders of such principal amount of Securities of such series, as
the case may be, shall be deemed to have agreed to an extension of
such period if corrective action is initiated by the Company within
such period and is being diligently pursued; or
(d) the entry by a court having jurisdiction in the premises of
(i) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (ii) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition by one or more Persons other
than the Company seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable
Federal or State law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official for the
Company or for any substantial part of its property, or ordering the
winding-up or liquidation of its affairs, and any such decree or order
for relief or any such other decree or order shall have remained un-
stayed and in effect for a period of ninety (90) consecutive days; or
(e) the commencement by the Company of a voluntary case or pro-
ceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company in a
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State law, or the consent by
it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial
part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the
authorization of such action by the Board of Directors; or
(f) If such Securities shall have been issued and delivered to a
Washington Water Power Trust (or a trustee thereof) in connection with
the issuance by such trust of Trust Securities and so long as such
Trust Securities remain outstanding, such Washington Water Power Trust
shall have voluntarily or involuntarily dissolved, wound-up its
business or otherwise terminated its existence except in connection
with (i) the distribution of Securities to holders of Trust Securities
in liquidation of their interests in such trust, (ii) the redemption
of all or the outstanding Trust Securities of such trust or (iii)
certain mergers, consolidations or other business combinations, each
as permitted by the Declaration establishing such trust.
SECTION 702. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default shall have occurred and be continuing with
respect to Securities of any series at the time Outstanding, then in every
such case the Trustee or the Holders of not less than thirty-three per
centum (33%) in principal amount of the Outstanding Securities of such
series may declare the principal amount (or, if any of the Securities of
such series are Discount Securities, such portion of the principal amount
of such Securities as may be specified in the terms thereof as contemplated
by Section 301) of all of the Outstanding Securities of such series to be
due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon such declaration such principal
amount (or specified amount), together with premium, if any, and accrued
interest, if any, thereon, shall become immediately due and payable;
provided, however, that if an Event of Default shall have occurred and be
continuing with respect to more than one series of Securities, the Trustee
or the Holders of not less than thirty-three per centum (33%) in aggregate
principal amount of the Outstanding Securities of all such series,
considered as one class, may make such declaration of acceleration, and not
the Holders of the Securities of any one of such series.
At any time after such a declaration of acceleration with respect
to Securities of any series shall have been made, but before a judgment or
decree for payment of the money due shall have been obtained by the Trustee
as provided in this Article, the Event or Events of Default giving rise to
such declaration of acceleration shall, without further act, be deemed to
have been cured, and such declaration and its consequences shall, without
further act, be deemed to have been rescinded and annulled, if
(a) the Company shall have paid or deposited with the
Trustee a sum sufficient to pay
(i) all overdue interest, if any, on all Securities of
such series then Outstanding;
(ii) the principal of and premium, if any, on any
Securities of such series then Outstanding which have become
due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in
such Securities;
(iii) interest upon overdue interest at the rate or
rates prescribed therefor in such Securities, to the extent
that payment of such interest is lawful; and
(iv) all amounts due to the Trustee under Section 807;
and
(b) any other Event or Events of Default with respect to
Securities of such series, other than the non-payment of the
principal of Securities of such series which shall have become
due solely by such declaration of acceleration, shall have been
cured or waived as provided in Section 713.
No such rescission shall affect any subsequent Event of Default or impair
any right consequent thereon.
SECTION 703. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
If an Event of Default described in clause (a) or (b) of Section
701 shall have occurred and be continuing, the Company shall, upon demand
of the Trustee, pay to it, for the benefit of the Holders of the Securities
of the series with respect to which such Event of Default shall have
occurred, the whole amount then due and payable on such Securities for
principal and premium, if any, and interest, if any, and, in addition
thereto, such further amount as shall be sufficient to cover any amounts
due to the Trustee under Section 807.
If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due
and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon such
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other
obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series
shall have occurred and be continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders of
Securities of such series by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 704. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, to the extent permitted by law, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal or premium, if any, or interest, if any, upon
presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 807;
SECOND: To the payment of the whole amount then due and unpaid
upon the Outstanding Securities for principal and premium, if any, and
interest, if any, in respect of which or for the benefit of which such
money has been collected; and in case such proceeds shall be
insufficient to pay in full the whole amount so due and unpaid upon
such Securities, then to the payment of such principal and interest,
if any, thereon without any preference or priority, ratably according
to the aggregate amount so due and unpaid, with any balance then
remaining to the payment of premium, if any, and, if so specified as
contemplated by Section 301 with respect to the Securities of any
series, or any Tranche thereof, interest, if any, on overdue premium,
if any, and overdue interest, if any, ratably as aforesaid, all to the
extent permitted by applicable law;
THIRD: To the payment of the remainder, if any, to the Company
or to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
SECTION 705. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any
other obligor upon the Securities or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest, if any, owing and unpaid in respect of
the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for amounts due to the Trustee under Section 807)
and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amounts due it under Section 807.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 706. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or on the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders
in respect of which such judgment has been recovered.
SECTION 707. LIMITATION ON SUITS.
No Holder shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(a) such Holder shall have previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Securities of such series;
(b) the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series in respect of which an Event
of Default shall have occurred and be continuing, considered as one
class, shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for sixty (60) days after its receipt of such
notice, request and offer of indemnity shall have failed to institute
any such proceeding; and
(e) no direction inconsistent with such written request shall
have been given to the Trustee during such sixty (60) day period by
the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series in respect of which an Event of
Default shall have occurred and be continuing, considered as one
class.
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of
any other of such Holders or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under
this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all of such Holders.
SECTION 708. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional,
to receive payment of the principal of and premium, if any, and (subject to
Section 307) interest, if any, on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 709. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding shall
have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company,
the Trustee and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of
the Trustee and such Holder shall continue as though no such proceeding had
been instituted.
SECTION 710. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 711. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to exercise
any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or
by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 712. CONTROL BY HOLDERS OF SECURITIES.
If an Event of Default shall have occurred and be continuing in
respect of a series of Securities, the Holders of a majority in principal
amount of the Outstanding Securities of such series shall have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to the Securities of such series; provided,
however, that if an Event of Default shall have occurred and be continuing
with respect to more than one series of Securities, the Holders of a
majority in aggregate principal amount of the Outstanding Securities of all
such series, considered as one class, shall have the right to make such
direction, and not the Holders of the Securities of any one of such series;
and provided, further, that
(a) such direction shall not be in conflict with any rule of law
or with this Indenture, and could not involve the Trustee in personal
liability in circumstances where indemnity would not, in the Trustee's
sole discretion, be adequate, and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 713. WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of the Outstanding
Securities of any series may on behalf of the Holders of all the Securities
of such series waive any past default with respect to such series hereunder
and its consequences, except a default
(a) in the payment of the principal of or premium, if any, or
interest, if any, on any Security of such series, or
(b) in respect of a covenant or provision hereof which under
Section 1102 cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected; provided,
however, that so long as a Washington Water Power Trust holds the
Securities of any series, such trust may not waive any past default
without the consent of a majority in aggregate liquidation amount of
the outstanding Trust Securities issued by such trust (other than
Trust Securities initially issued and sold to the Company) obtained as
provided in the Declaration establishing such trust.
Upon any such waiver, such default shall cease to exist, and any
and all Events of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.
SECTION 714. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder by its
acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Company, to any suit instituted by the Trustee,
to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than ten per centum (10%) in aggregate principal amount of
the Outstanding Securities of all series in respect of which such suit may
be brought, considered as one class, or to any suit instituted by any
Holder for the enforcement of the payment of the principal of or premium,
if any, or interest, if any, on any Security on or after the Stated
Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
SECTION 715. WAIVER OF STAY OR EXTENSION LAWS.
To the full extent that it may lawfully so agree, the Company
shall not at any time set up, claim or otherwise seek to take the benefit
or advantage of any stay or extension law, now or hereafter in effect, in
order to prevent or hinder the enforcement of this Indenture; and the
Company, for itself and all who may claim under it, so far as it or they
now or hereafter may lawfully do so, hereby waives the benefit of all such
laws.
SECTION 716. ACTION BY HOLDERS OF CERTAIN TRUST SECURITIES.
If the Securities of any series shall be held by the
Institutional Trustee of a Washington Water Power Trust and if such
Institutional Trustee, as such Holder, shall have failed to exercise any of
the rights and remedies available under this Indenture to the Holders of
such Securities, the holders of the Trust Securities issued by such trust
(other than Trust Securities initially issued and sold to the Company)
shall have and may exercise all such rights and remedies, to the same
extent as if such holders of such Trust Securities held a principal amount
of Securities of such series equal to the liquidation amount of such Trust
Securities, without first proceeding against such trustee or trust.
Notwithstanding the foregoing, in the case of an Event of Default described
in clause (a) or (b) of Section 701, each holder of such Trust Securities
shall have and may exercise all rights available to the Institutional
Trustee under Section 708 as the Holder of the Securities of such series.
If action shall have been taken by both the Holders and the
holders of Trust Securities (other than Trust Securities initially issued
and sold to the Company) to exercise such rights as contemplated in the
preceding paragraph, the action taken by holders of Trust Securities shall
control. Any such action taken by registered holders of Trust Securities
shall be evidenced to the Trustee in the same manner as an Act of Holders,
as provided in Section 104(a). The Trustee shall be entitled to rely on
the books and records of the related Washington Water Power Trust in
determining the identities of the holders of Trust Securities (and, upon
the reasonable request of the Trustee, the Company, as the sponsor of such
trust, shall, at its own expense, promptly provide copies of applicable
portions of such books and records to the Trustee to the extent reasonably
necessary to enable the Trustee to make such determination).
ARTICLE EIGHT
THE TRUSTEE
SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default with
respect to Securities of any series,
(i) the Trustee undertakes to perform, with respect to
Securities of such series, such duties and only such duties as
are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may, with respect to Securities of such series, conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not they conform to
the requirements of this Indenture.
(b) In case an Event of Default with respect to Securities of
any series shall have occurred and be continuing, the Trustee shall
exercise, with respect to Securities of such series, such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(iii) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities of any one or more
series, as provided herein, relating to the time, method and
place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of
such series; and
(iv) no provision of this Indenture shall require the
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.
(d) Whether or not therein expressly so provided, every
provision of this Indenture 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 802. NOTICE OF DEFAULTS.
The Trustee shall give notice of any default hereunder with
respect to the Securities of any series to the Holders of Securities of
such series in the manner and to the extent required to do so by the Trust
Indenture Act, unless such default shall have been cured or waived;
provided, however, that in the case of any default of the character
specified in Section 701(c), no such notice to Holders shall be given until
at least seventy-five (75) days after the occurrence thereof; and provided,
further, that, subject to the provisions of Section 801, the Trustee shall
not be deemed to have knowledge of such default unless either (i) a
Responsible Officer of the Trustee shall have actual knowledge of such
default or (ii) the Trustee shall have received written notice thereof from
the Company or any Holder. For the purpose of this Section, the term "DE-
FAULT" means any event which is, or after notice or lapse of time, or both,
would become, an Event of Default.
SECTION 803. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 801 and to the applicable
provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(b) any request, direction or act of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order, 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 Indenture the Trustee
shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence is specifically prescribed herein) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate;
(d) the 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 Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any Holder pursuant to this Indenture, unless such Holder
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by
it complying with such request or direction;
(f) the 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 Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the 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 Company, personally or
by agent or attorney;
(g) the 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 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; and
(h) the Trustee shall not be charged with knowledge of any Event
of Default with respect to the Securities of any series for which it
is acting as Trustee unless either (i) a Responsible Officer of the
Trustee shall have actual knowledge of the Event of Default or (ii)
written notice of such Event of Default shall have been given to the
Trustee by the Company, any other obligor on such Securities or by any
Holder of such Securities.
SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of
the Securities. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 805. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any Paying Agent,
any Security Registrar or any other agent of the Company or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities and, subject to Sections 808 and 813, may otherwise deal with
the Company with the same rights it would have if it were not such Trustee,
Authenticating Agent, Paying Agent, Security Registrar or other agent.
SECTION 806. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds, except to the extent required by law. The
Trustee shall be under no liability for interest on or investment of any
money received by it hereunder except as expressly provided herein or
otherwise agreed with, and for the sole benefit of, the Company.
SECTION 807. COMPENSATION AND REIMBURSEMENT.
The Company shall
(a) pay to the Trustee from time to time reasonable compensation
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, reimburse the
Trustee upon its request for all reasonable expenses, disbursements
and advances reasonably incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except to the extent that any such expense, disbursement or
advance may be attributable to its negligence, wilful misconduct or
bad faith; and
(c) indemnify the Trustee and hold it harmless from and against
any loss, liability or expense reasonably incurred by it arising out
of or in connection with the acceptance or administration of the trust
or trusts hereunder or the performance of its duties hereunder,
including the reasonable 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, except to the
extent any such loss, liability or expense may be attributable to its
negligence, wilful misconduct or bad faith.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such other
than property and funds held in trust under Section 603 (except moneys
payable to the Company as provided in Section 603). "TRUSTEE" for purposes
of this Section shall include any predecessor Trustee; provided, however,
that the negligence, wilful misconduct or bad faith of any Trustee
hereunder shall not affect the rights of any other Trustee hereunder.
SECTION 808. DISQUALIFICATION; CONFLICTING INTERESTS.
If the 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 Indenture. For purposes of Section 310(b)(1) of the Trust
Indenture Act and to the extent permitted thereby, the Trustee, in its
capacity as trustee in respect of the Securities of any series, shall not
be deemed to have a conflicting interest arising from its capacity as
trustee in respect of the Securities of any other series.
SECTION 809. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a 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 Fifty
Million Dollars ($50,000,000) and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
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 Fifty Million Dollars
($50,000,000) or the Dollar equivalent of the applicable foreign
currency and subject to supervision or examination by authority of
such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to
United States institutional trustees,
and, in either case, qualified and eligible under this Article and the
Trust Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of such supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. 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 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in accordance
with the applicable requirements of Section 811.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required
by Section 811 shall not have been delivered to the Trustee within thirty
(30) days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the
Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 808 after
written request therefor by the Company or by any Holder who has
been a bona fide Holder for at least six months, or
(ii) the Trustee shall cease to be eligible under Section
809 and shall fail to resign after written request therefor by
the Company or by any such Holder, or
(iii) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer shall
take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (x) the Company by a Board Resolution may remove
the Trustee with respect to all Securities or (y) subject to Section 714,
any Holder who has been a bona fide Holder for at least six (6) months may,
on behalf of itself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to
all Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any
cause (other than as contemplated in clause (y) in subsection (d) of this
Section), with respect to the Securities of one or more series, the
Company, by a Board Resolution, shall take prompt steps to appoint a
successor Trustee or Trustees with respect to the Securities of that or
those series (it being understood that any such successor Trustee may be
appointed with respect to the Securities of one or more or all of such
series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the
applicable requirements of Section 811. If, within one (1) year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment in accordance with the applicable
requirements of Section 811, become the successor Trustee with respect to
the Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to
the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 811,
any Holder who has been a bona fide Holder of a Security of such series for
at least six (6) months may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to the Securities of such series.
(f) So long as no event which is, or after notice or lapse of
time, or both, would become, an Event of Default shall have occurred and be
continuing, if the Company shall have delivered to the Trustee with respect
to the Securities of one or more series (i) a Board Resolution appointing a
successor Trustee or Trustees with respect to that or those series,
effective as of a date specified therein, and (ii) an instrument of
acceptance of such appointment, effective as of such date, by such
successor Trustee or Trustees in accordance with Section 811, the Trustee
or Trustees with respect to that or those series shall be deemed to have
resigned as contemplated in subsection (b) of this Section, the successor
Trustee or Trustees shall be deemed to have been appointed pursuant to
subsection (e) of this Section and such appointment shall be deemed to have
been accepted as contemplated in Section 811, all as of such date, and all
other provisions of this Section and Section 811 shall be applicable to
such resignation, appointment and acceptance except to the extent
inconsistent with this subsection (f).
(g) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of
any series by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders of Securities of such series as their names
and addresses appear in the Security Register. Each notice shall include
the name of the successor Trustee with respect to the Securities of such
series and the address of its corporate trust office.
SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of all series, every such successor Trustee
so appointed shall execute, acknowledge and deliver to the Company and to
the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, shall become
vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of all sums owed to it, execute and
deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held
by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to
the Securities of such series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring Trustee
is not retiring shall continue to be vested in the retiring Trustee and
(3) shall add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees co-
trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts here-
under administered by any other such Trustee; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and
each such successor Trustee, without any further act, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment
of such successor Trustee relates; but, on request of the Company or any
successor Trustee, such retiring Trustee, upon payment of all sums owed to
it, shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any instruments which fully vest in and confirm to such
successor Trustee all rights, powers and trusts referred to in subsection
(a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper
or any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.
SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the Company or
any other obligor upon the Securities (other than by reason of a
relationship described in Section 311(b) of the Trust Indenture Act), the
Trustee shall be subject to any and all applicable provisions of the Trust
Indenture Act regarding the collection of claims against the Company 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; and
(b) the term "SELF-LIQUIDATING PAPER" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company or such obligor 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 Trustee simultaneously with
the creation of the creditor relationship with the Company or such
obligor arising from the making, drawing, negotiating or incurring of
the draft, bill of exchange, acceptance or obligation.
SECTION 814. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to the Securities of one or more series, or any Tranche thereof,
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series or Tranche issued upon original issuance,
exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference
is made in this Indenture to the authentication and delivery of Securities
by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentica-
tion executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the
United States, any State or Territory thereof or the District of Columbia
or the Commonwealth of Puerto Rico, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less
than Fifty Million Dollars ($50,000,000) and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent 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 an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to all
or substantially all of the corporate agency or corporate trust business of
an Authenticating Agent, shall continue to be an Authenticating Agent,
provided such corporation shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part
of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in
case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company.
Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section.
The provisions of Sections 308, 804 and 805 shall be applicable
to each Authenticating Agent.
If an appointment with respect to the Securities of one or more
series, or any Tranche thereof, shall be made pursuant to this Section, the
Securities of such series or Tranche may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternate certificate of
authentication substantially in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
________________________
As Trustee
By______________________
As Authenticating Agent
By______________________
Authorized Officer
If all of the Securities of a series may not be originally issued
at one time, and if the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a Place of
Payment where the Company wishes to have Securities of such series
authenticated upon original issuance, the Trustee, if so requested by the
Company in writing (which writing need not comply with Section 102 and need
not be accompanied by an Opinion of Counsel), shall appoint, in accordance
with this Section and in accordance with such procedures as shall be
acceptable to the Trustee, an Authenticating Agent having an office in a
Place of Payment designated by the Company with respect to such series of
Securities.
ARTICLE NINE
LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY
SECTION 901. LISTS OF HOLDERS.
Semiannually, not later than June 30 and December 31 in each
year, commencing June 30, ____, and within 30 days of such other times as
the Trustee may request in writing, the Company shall furnish or cause to
be furnished to the Trustee information as to the names and addresses of
the Holders, as of a date no more than fifteen (15) days prior to the date
such information is so furnished, and the 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; provided, however, that no such list need be furnished so
long as the Trustee shall be the Security Registrar.
SECTION 902. REPORTS BY TRUSTEE AND COMPANY.
Not later than July 15 in each year, commencing July 15, ____,
the Trustee shall transmit to the Holders, the Commission and each
securities exchange upon which any Securities are listed, a report, dated
as of the next preceding May 15, 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 Trustee
shall transmit to the Holders, the Commission and each securities exchange
upon which any Securities are listed, and the Company shall file with the
Trustee (within thirty (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 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. The Company shall notify the Trustee of the listing of any Securities
on any securities exchange.
ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE
OR OTHER TRANSFER
SECTION 1001. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
corporation, or convey or otherwise transfer, or lease, all of its
properties, as or substantially as an entirety, to any Person, unless:
(a) the corporation formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or
other transfer, or which leases (for a term extending beyond the last
Stated Maturity of the Securities then Outstanding), all of the
properties of the Company, as or substantially as an entirety, shall
be a corporation organized and existing under the laws of the United
States, any State or Territory thereof or the District of Columbia or
under the laws of Canada or any Province thereof (such corporation
being hereinafter sometimes called the "SUCCESSOR CORPORATION") and
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form reasonably satisfactory to the
Trustee, the due and punctual payment of the principal of and premium,
if any, and interest, if any, on all the Securities then Outstanding
and the performance and observance of every covenant and condition of
this Indenture to be performed or observed by the Company; and
(b) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each of which shall state that
such consolidation, merger, conveyance or other transfer or lease, and
such supplemental indenture, comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
Anything in this Indenture to the contrary notwithstanding, the
conveyance or other transfer by the Company of all of its facilities (a)
for the generation of electric energy, (b) for the transmission of electric
energy or (c) for the distribution of electric energy and/or natural gas,
in each case considered alone, or all of its facilities described in
clauses (a) and (b), considered together, or all of its facilities
described in clauses (b) and (c), considered together, shall in no event be
deemed to constitute a conveyance or other transfer of all the properties
of the Company, as or substantially as an entirety, unless, immediately
following such conveyance or other transfer, the Company shall own no
properties in the other such categories of property not so conveyed or
otherwise transferred. The character of particular facilities shall be
determined by reference to the Uniform System of Accounts prescribed for
public utilities and licensees subject to the Federal Power Act, as
amended, to the extent applicable.
SECTION 1002. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any conveyance or other
transfer of all the properties of the Company, as or substantially as an
entirety, in accordance with Section 1001, the Successor Corporation shall
succeed to, and be substituted for, and may exercise every power and right
of, the Company under this Indenture with the same effect as if such
Successor Corporation had been named as the "Company" herein. Without
limiting the generality of the foregoing, the Successor Corporation may
execute and deliver to the Trustee, and thereupon the Trustee shall,
subject to the provisions of Article Three, authenticate and deliver,
Securities. All Securities so executed by the Successor Corporation, and
authenticated and delivered by the Trustee, shall in all respects be
entitled to the benefits provided by this Indenture equally and ratably
with all Securities executed, authenticated and delivered prior to the time
such consolidation, merger, conveyance or other transfer became effective.
SECTION 1003. RELEASE OF COMPANY UPON CONVEYANCE OR OTHER TRANSFER.
In the case of a conveyance or other transfer to any Person or
Persons as contemplated in Section 1001, upon the satisfaction of all the
conditions specified in Section 1001 the Company (such term being used in
this Section without giving effect to such transaction) shall be released
and discharged from all obligations and covenants under this Indenture and
on and under all Securities then Outstanding (unless the Company shall have
delivered to the Trustee an instrument in which it shall waive such release
and discharge) and the Trustee shall acknowledge in writing that the
Company has been so released and discharged.
SECTION 1004. MERGER INTO COMPANY.
Nothing in this Indenture shall be deemed to prevent or restrict
any consolidation or merger after the consummation of which the Company
would be the surviving or resulting corporation or any conveyance or other
transfer, or lease of any part of the properties of the Company which does
not constitute the entirety, or substantially the entirety, thereof.
SECTION 1005. TRANSFER OF LESS THAN THE ENTIRETY.
(a) If the Company shall have conveyed or otherwise transferred any
part of its properties which does not constitute the entirety, or
substantially the entirety, thereof to another corporation meeting the
requirements set forth in clause (a) of the first paragraph of Section 1001
and if:
(i) the transferee of such part of the properties of the Company
shall have executed and delivered to the Trustee an indenture
supplemental hereto, in form reasonably satisfactory to the Trustee,
which contains an assumption by such transferee of the due and
punctual payment of the principal of and premium, if any, and
interest, if any, on all the Securities then Outstanding and the
performance and observance of every covenant and condition of this
Indenture to be performed or observed by the Company;
(ii) there shall have been delivered to the Trustee an
Independent Expert's Certificate
(A) describing the property so conveyed or otherwise
transferred (such description of property to be made by reference
either to specific items, units and/or elements of property or
portions thereof, on a percentage or Dollar basis, or to
properties reflected in specified accounts in the Company's books
of account or portions thereof, on a Dollar basis); provided,
however, that such property shall be identified in such
certificate as facilities for the generation, transmission or
destruction of electric energy or for the storage, transportation
or distribution of natural gas;
(B) stating, in the judgment of the signers, the Fair Value
to the transferee of the property so conveyed or otherwise
transferred;
(C) stating an amount equal to seventy percent (70%) of the
amount stated pursuant to clause (B) above;
(D) stating an amount equal to the aggregate principal
amount of the Securities then Outstanding; and
(E) stating that the amount stated pursuant to clause (D)
above does not exceed the amount stated pursuant to clause (C)
above;
(iii) the Company shall have assigned or otherwise transferred
to such transferee all Trust Securities (initially issued and sold to
the Company) then outstanding, and such transferee shall have
expressly assumed all obligations under all Guarantees; and
(iv) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each of which shall
state that such conveyance or other transfer and such supplemental
indenture comply with this Section and that all conditions precedent
relating to such transactions provided for in this Section and
otherwise in this Indenture have been complied with;
then, upon the satisfaction of all such conditions,
(x) the Company shall be released and discharged from all
obligations and covenants under this Indenture and on and under all
Securities then Outstanding (unless the Company shall have delivered
to the Trustee an instrument in which it shall waive such release and
discharge), and the Trustee shall acknowledge in writing that the
Company has been so released and discharged; and
(y) if the Company shall have been released and discharged as
contemplated in clause (x) above, such transferee shall succeed to,
and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such
transferee had been named the "Company" herein; and without limiting
the generality of the foregoing, such transferee shall be deemed a
"Successor Corporation" for purposes of Section 1002 and for all other
purposes of this Indenture.
(b) For purposes of this Section:
"FAIR VALUE" means the fair value of such property so
conveyed or otherwise transferred as may be determined by
reference to (a) the amount which would be likely to be obtained
in an arm's-length transaction with respect to such property
between an informed and willing buyer and an informed and willing
seller, under no compulsion, respectively, to buy or sell, (b)
the amount of investment with respect to such property which,
together with a reasonable return thereon, would be likely to be
recovered through ordinary business operations or otherwise, (c)
the cost, accumulated depreciation and replacement cost with
respect to such property and/or (d) any other relevant factors;
provided, however, that (x) the Fair Value of property shall be
determined without deduction for any mortgage, deed of trust,
pledge, security interest, encumbrance, lease, reservation,
restriction, servitude, charge or similar right or any other lien
of any kind on such property and (y) the Fair Value to the
transferee of any property shall not reflect any reduction
relating to the fact that such property may be of less value to a
Person which is not the owner or operator of the property or any
portion thereof than to a Person which is such owner or operator.
Fair Value may be determined, without physical inspection, by the
use of accounting and engineering records and other data
maintained by the Company or the transferee or otherwise
available to the Expert certifying the same.
"INDEPENDENT EXPERT'S CERTIFICATE" means a certificate
signed by an authorized officer of the transferee and by an
Independent Expert (which Independent Expert shall be selected
either by the board of directors or by an authorized officer of
the transferee, the execution of such certificate by such
authorized officer to be conclusive evidence of such selection)
and delivered to the Trustee. For purposes of this definition,
(a) "EXPERT" means a Person which is an engineer, appraiser or
other expert and which, with respect to any certificate to be
signed by such Person and delivered to the Trustee, is qualified
to pass upon the matter set forth in such certificate; (b)
"ENGINEER" means a Person engaged in the engineering profession
or otherwise qualified to pass upon engineering matters
(including, but not limited to, a Person licensed as a
professional engineer, whether or not then engaged in the
engineering profession) and (c) "APPRAISER" means a Person
engaged in the business of appraising property or otherwise
qualified to pass upon the Fair Value or fair market value of
property. "INDEPENDENT", when applied to any Expert, means such
a Person who (a) is in fact independent, (b) does not have any
direct material financial interest in the transferee or in any
obligor upon the Securities or in any Affiliate of the
transferee, (c) is not connected with the transferee or such
other obligor as an officer, employee, promoter, underwriter,
trustee, partner, director or any person performing similar
functions and (d) is approved by the Trustee in the exercise of
reasonable care.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 1101. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form reasonably satisfactory to the Trustee, for
any of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants
of the Company herein and in the Securities, all as provided in
Article Ten; or
(b) to add one or more covenants of the Company or other
provisions for the benefit of all Holders or for the benefit of
the Holders of, or to remain in effect only so long as there
shall be Outstanding, Securities of one or more specified series,
or one or more specified Tranches thereof, or to surrender any
right or power herein conferred upon the Company; or
(c) to change or eliminate any provision of this Indenture
or to add any new provision to this Indenture; provided, however,
that if such change, elimination or addition shall adversely
affect the interests of the Holders of Securities of any series
or Tranche in any material respect, such change, elimination or
addition shall become effective with respect to such series or
Tranche only when no Security of such series or Tranche remains
Outstanding; or
(d) to provide collateral security for the Securities; or
(e) to establish the form or terms of Securities of any
series or Tranche as contemplated by Sections 201 and 301; or
(f) to provide for the authentication and delivery of
bearer securities and coupons appertaining thereto representing
interest, if any, thereon and for the procedures for the
registration, exchange and replacement thereof and for the giving
of notice to, and the solicitation of the vote or consent of, the
holders thereof, and for any and all other matters incidental
thereto; or
(g) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of
the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by
more than one Trustee, pursuant to the requirements of Section
811(b); or
(h) to provide for the procedures required to permit the
Company to utilize, at its option, a non-certificated system of
registration for all, or any series or Tranche of, the Securi-
ties; or
(i) to change any place or places where (1) the principal
of and premium, if any, and interest, if any, on all or any
series of Securities, or any Tranche thereof, shall be payable,
(2) all or any series of Securities, or any Tranche thereof, may
be surrendered for registration of transfer, (3) all or any
series of Securities, or any Tranche thereof, may be surrendered
for exchange and (4) notices and demands to or upon the Company
in respect of all or any series of Securities, or any Tranche
thereof, and this Indenture may be served; or
(j) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any
other provision herein; or to make any other changes to the
provisions hereof or to add other provisions with respect to
matters or questions arising under this Indenture, provided that
such other changes or additions shall not adversely affect the
interests of the Holders of Securities of any series or Tranche
in any material respect.
Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the execution and delivery of
this Indenture or at any time thereafter shall be amended and
(x) if any such amendment shall require one or more changes
to any provisions hereof or the inclusion herein of any
additional provisions, or shall by operation of law be deemed to
effect such changes or incorporate such provisions by reference
or otherwise, this Indenture shall be deemed to have been amended
so as to conform to such amendment to the Trust Indenture Act,
and the Company and the Trustee may, without the consent of any
Holders, enter into an indenture supplemental hereto to evidence
such amendment hereof; or
(y) if any such amendment shall permit one or more changes
to, or the elimination of, any provisions hereof which, at the
date of the execution and delivery hereof or at any time
thereafter, are required by the Trust Indenture Act to be
contained herein or are contained herein to reflect any
provisions of the Trust Indenture Act as in effect at such date,
this Indenture shall be deemed to have been amended to effect
such changes or elimination, and the Company and the Trustee may,
without the consent of any Holders, enter into an indenture
supplemental hereto to amend this Indenture to effect such
changes or elimination.
SECTION 1102. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
Subject to the provisions of Section 1101, with the consent of
the Holders of a majority in aggregate principal amount of the Securities
of all series then Outstanding under this Indenture, considered as one
class, by Act of said Holders delivered to the Company and the Trustee, the
Company and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this
Indenture; provided, however, that if there shall be Securities of more
than one series Outstanding hereunder and if a proposed supplemental
indenture shall directly affect the rights of the Holders of Securities of
one or more, but less than all, of such series, then the consent only of
the Holders of a majority in aggregate principal amount of the Outstanding
Securities of all series so directly affected, considered as one class,
shall be required; and provided, further, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches, then the
consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all Tranches so directly affected, considered
as one class, shall be required; and provided, further, that no such
supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security other
than pursuant to the terms thereof, or reduce the principal
amount thereof or the rate of interest thereon (or the amount of
any installment of interest thereon) or change the method of
calculating such rate or reduce any premium payable thereon, or
reduce the amount of the principal of any Discount Security that
would be due and payable upon a declaration of acceleration of
the Maturity thereof pursuant to Section 702, or change the coin
or currency (or other property), in which any Security or
premium, if any, or interest, if any, thereon is payable, or
impair the right to institute suit for the enforcement of any
such payment on or after the Maturity of any Security, without,
in any such case, the consent of the Holder of such Security; or
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series, or any Tranche thereof, the
consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with any provision of this
Indenture or of any default hereunder and its consequences, or
reduce the requirements of Section 1204 for quorum or voting,
without, in any such case, the consent of the Holder of each
Outstanding Security of such series or Tranche; or
(c) modify any of the provisions of this Section, Section
506 or Section 713 with respect to the Securities of any series
or any Tranche thereof (except to increase the percentages in
principal amount referred to in this Section or such other
Sections or to provide that other provisions of this Indenture
cannot be modified or waived without the consent of the Holders
of all Securities of such series or Tranche) without, in any such
case, the consent of the Holder of each Outstanding Security of
such series or Tranche; provided, however, that this clause shall
not be deemed to require the consent of any Holder with respect
to changes in the references to "the Trustee" and concomitant
changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Sections 811(b) and 1101(g).
A supplemental indenture which (x) changes or eliminates any
covenant or other provision of this Indenture which has expressly been
included solely for the benefit of the Holders of, or which is to remain in
effect only so long as there shall be Outstanding, Securities of one or
more specified series, or one or more Tranches thereof, or (y) modifies the
rights of the Holders of Securities of such series or Tranches with respect
to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any other
series or Tranche.
Notwithstanding the foregoing, so long as the Securities of any
series are held by a Washington Water Power Trust, the trustee may not
consent to a supplemental indenture under this Section 1102 without the
prior consent, obtained as provided in the Declaration establishing such
trust of the holders of a majority in aggregate liquidation amount of all
Trust Securities issued by such trust (other than Trust Securities
initially issued and sold to the Company), or, in the case of changes
described in clauses (a), (b) and (c) above, 100% in aggregate liquidation
amount of all such Trust Securities then outstanding.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
SECTION 1103. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Section 801) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties,
immunities or liabilities under this Indenture or otherwise.
SECTION 1104. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution and delivery of any supplemental indenture
under this Article this Indenture shall be modified in accordance there-
with, and such supplemental indenture shall form a part of this Indenture
for all purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby. Any
supplemental indenture permitted by this Article may restate this Indenture
in its entirety, and, upon the execution and delivery thereof, any such
restatement shall supersede this Indenture as theretofore in effect for all
purposes.
SECTION 1105. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
SECTION 1106. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series, or any Tranche thereof, authenticated
and delivered after the execution of any supplemental indenture pursuant to
this Article may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities
of any series, or any Tranche thereof, so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered
by the Trustee in exchange for Outstanding Securities of such series or
Tranche.
SECTION 1107. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
To the extent, if any, that the terms of any particular series of
Securities shall have been established in or pursuant to a Board Resolution
or an Officer's Certificate pursuant to a supplemental indenture or a Board
Resolution as contemplated by Section 301, and not in a supplemental
indenture, additions to, changes in or the elimination of any of such terms
may be effected by means of a supplemental Board Resolution or a
supplemental Officer's Certificate, as the case may be, delivered to, and
accepted by, the Trustee; provided, however, that such supplemental Board
Resolution or supplemental Officer's Certificate shall not be accepted by
the Trustee or otherwise be effective unless all conditions set forth in
this Indenture which would be required to be satisfied if such additions,
changes or elimination were contained in a supplemental indenture shall
have been appropriately satisfied. Upon the acceptance thereof by the
Trustee, any such supplemental Board Resolution or supplemental Officer's
Certificate shall be deemed to be a "supplemental indenture" for purposes
of Section 1104 and 1106.
ARTICLE TWELVE
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1201. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more, or all,
series, or any Tranche or Tranches thereof, may be called at any time and
from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series or Tranches.
SECTION 1202. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of
Securities of one or more, or all, series, or any Tranche or Tranches
thereof, for any purpose specified in Section 1201, to be held at such time
and (except as provided in subsection (b) of this Section) at such place in
the Borough of Manhattan, The City of New York, as the Trustee shall
determine, or, with the approval of the Company, at any other place.
Notice of every such meeting, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section 106, not less
than twenty-one (21) nor more than one hundred eighty (180) days prior to
the date fixed for the meeting.
(b) The Trustee may be asked to call a meeting of the Holders of
Securities of one or more, or all, series, or any Tranche or Tranches
thereof, by the Company or by the Holders of thirty-three per centum (33%)
in aggregate principal amount of all of such series and Tranches,
considered as one class, for any purpose specified in Section 1201, by
written request setting forth in reasonable detail the action proposed to
be taken at the meeting. If the Trustee shall have been asked by the
Company to call such a meeting, the Company shall determine the time and
place for such meeting and may call such meeting by giving notice thereof
in the manner provided in subsection (a) of this Section, or shall direct
the Trustee, in the name and at the expense of the Company, to give such
notice. If the Trustee shall have been asked to call such a meeting by
Holders in accordance with this subsection (b), and the Trustee shall not
have given the notice of such meeting within twenty-one (21) days after
receipt of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Holders of Securities of
such series and Tranches, in the principal amount above specified, may
determine the time and the place in the Borough of Manhattan, The City of
New York, or in such other place as shall be determined or approved by the
Company, for such meeting and may call such meeting for such purposes by
giving notice thereof as provided in subsection (a) of this Section.
(c) Any meeting of Holders of Securities of one or more, or all,
series, or any Tranche or Tranches thereof, shall be valid without notice
if the Holders of all Outstanding Securities of such series or Tranches are
present in person or by proxy and if representatives of the Company and the
Trustee are present, or if notice is waived in writing before or after the
meeting by the Holders of all Outstanding Securities of such series, or any
Tranche or Tranches thereof, or by such of them as are not present at the
meeting in person or by proxy, and by the Company and the Trustee.
SECTION 1203. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Securities of
one or more, or all, series, or any Tranche or Tranches thereof, a Person
shall be (a) a Holder of one or more Outstanding Securities of such series
or Tranches, or (b) a Person appointed by an instrument in writing as proxy
for a Holder or Holders of one or more Outstanding Securities of such
series or Tranches by such Holder or Holders. The only Persons who shall
be entitled to attend any meeting of Holders of Securities of any series or
Tranche shall be the Persons entitled to vote at such meeting and their
counsel, any representatives of the Trustee and its counsel and any repre-
sentatives of the Company and its counsel.
SECTION 1204. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of the series and Tranches with
respect to which a meeting shall have been called as hereinbefore provided,
considered as one class, shall constitute a quorum for a meeting of Holders
of Securities of such series and Tranches; provided, however, that if any
action is to be taken at such meeting which this Indenture expressly
provides may be taken by the Holders of a specified percentage, which is
less than a majority, in principal amount of the Outstanding Securities of
such series and Tranches, considered as one class, the Persons entitled to
vote such specified percentage in principal amount of the Outstanding Secu-
rities of such series and Tranches, considered as one class, shall
constitute a quorum. In the absence of a quorum within one hour of the
time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series and Tranches, be dissolved.
In any other case the meeting may be adjourned for such period as may be
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for such period as may be
determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Except as provided by Section 1205(e), notice of the
reconvening of any meeting adjourned for more than thirty (30) days shall
be given as provided in Section 106 not less than ten (10) days prior to
the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage,
as provided above, of the principal amount of the Outstanding Securities of
such series and Tranches which shall constitute a quorum.
Except as limited by Section 1102, any resolution presented to a
meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of
a majority in aggregate principal amount of the Outstanding Securities of
the series and Tranches with respect to which such meeting shall have been
called, considered as one class; provided, however, that, except as so lim-
ited, any resolution with respect to any action which this Indenture
expressly provides may be taken by the Holders of a specified percentage,
which is less than a majority, in principal amount of the Outstanding
Securities of such series and Tranches, considered as one class, may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding Securities
of such series and Tranches, considered as one class.
Any resolution passed or decision taken at any meeting of Holders
of Securities duly held in accordance with this Section shall be binding on
all the Holders of Securities of the series and Tranches with respect to
which such meeting shall have been held, whether or not present or
represented at the meeting.
SECTION 1205. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS;
CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Securities may be in
person or by proxy; and, to the extent permitted by law, any such proxy
shall remain in effect and be binding upon any future Holder of the
Securities with respect to which it was given unless and until specifically
revoked by the Holder or future Holder (except as provided in Section
104(g)) of such Securities before being voted.
(b) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities in regard to proof of the holding of
such Securities and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required by any
such regulations and approved by the Company, the holding of Securities
shall be proved in the manner specified in Section 104 and the appointment
of any proxy shall be proved in the manner specified in Section 104. Such
regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the proof
specified in Section 104 or other proof.
(c) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders as provided in Section 1202(b), in
which case the Company or the Holders of Securities of the series and
Tranches calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons entitled
to vote a majority in aggregate principal amount of the Outstanding
Securities of all series and Tranches represented at the meeting,
considered as one class.
(d) At any meeting each Holder or proxy shall be entitled to one
vote for each One Thousand Dollars ($1,000) principal amount of Outstanding
Securities held or represented by such Holder; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the meeting to
be not Outstanding. The chairman of the meeting shall have no right to
vote, except as a Holder of a Security or proxy.
(e) Any meeting duly called pursuant to Section 1202 at which a
quorum is present may be adjourned from time to time by Persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities
of all series and Tranches represented at the meeting, considered as one
class; and the meeting may be held as so adjourned without further notice.
SECTION 1206. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders
shall be by written ballots on which shall be subscribed the signatures of
the Holders or of their representatives by proxy and the principal amounts
and serial numbers of the Outstanding Securities, of the series and
Tranches with respect to which the meeting shall have been called, held or
represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for
or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Holders shall be prepared by the secretary of the meeting and there shall
be attached to such record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that such notice was given as provided in Section 1202
and, if applicable, Section 1204. Each copy shall be signed and verified
by the affidavits of the permanent chairman and secretary of the meeting
and one such copy shall be delivered to the Company, and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any record so signed and verified shall
be conclusive evidence of the matters therein stated.
SECTION 1207. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as hereinbefore
contemplated in this Article, any request, demand, authorization,
direction, notice, consent, waiver or other action may be made, given or
taken by Holders by written instruments as provided in Section 104.
ARTICLE THIRTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 1301. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest, if any, on any Securities, or any part
thereof, or for any claim based thereon or otherwise in respect thereof, or
of the indebtedness represented thereby, or upon any obligation, covenant
or agreement under this Indenture, against any incorporator, stockholder,
officer or director, as such, past, present or future, of the Company or of
any predecessor or successor corporation (either directly or through the
Company or a predecessor or successor corporation), whether by virtue of
any constitutional provision, statute or rule of law or by the enforcement
of any assessment or penalty or otherwise; it being expressly agreed and
understood that this Indenture and all the Securities are solely corporate
obligations and that no personal liability whatsoever shall attach to, or
be incurred by, any incorporator, stockholder, officer or director, past,
present or future, of the Company or of any predecessor or successor
corporation, either directly or indirectly through the Company or any
predecessor or successor corporation, because of the indebtedness hereby
authorized or under or by reason of any of the obligations, covenants or
agreements contained in this Indenture or in any of the Securities or to be
implied herefrom or therefrom; and such personal liability, if any, is
hereby expressly waived and released as a condition of, and as part of the
consideration for, the execution and delivery of this Indenture and the
issuance of the Securities.
ARTICLE FOURTEEN
SUBORDINATION OF SECURITIES
SECTION 1401. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company, for itself, its successors and assigns, covenants
and agrees, and each Holder of the Securities of each series, by its
acceptance thereof, likewise covenants and agrees, that the payment of the
principal of and premium, if any, and interest, if any, on each and all of
the Securities is hereby expressly subordinated and subject to the extent
and in the manner set forth in this Article, in right of payment to the
prior payment in full of all Senior Indebtedness.
Each Holder of the Securities of each series, by its acceptance
thereof, authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination
as provided in this Article, and appoints the Trustee its attorney-in-fact
for any and all such purposes.
SECTION 1402. PAYMENT OVER OF PROCEEDS OF SECURITIES.
In the event (a) of any insolvency or bankruptcy proceedings or
any receivership, liquidation, reorganization or other similar proceedings
in respect of the Company or a substantial part of its property, or of any
proceedings for liquidation, dissolution or other winding-up of the
Company, whether or not involving insolvency or bankruptcy, or (b) subject
to the provisions of Section 1403, that (i) a default shall have occurred
with respect to the payment of principal of or interest on or other
monetary amounts due and payable on any Senior Indebtedness, or (ii) there
shall have occurred a default (other than a default in the payment of
principal or interest or other monetary amounts due and payable) in respect
of any Senior Indebtedness, as defined therein or in the instrument under
which the same is outstanding, permitting the holder or holders thereof to
accelerate the maturity thereof (with notice or lapse of time, or both),
and such default shall have continued beyond the period of grace, if any,
in respect thereof, and, in the cases of subclauses (i) and (ii) of this
clause (b), such default shall not have been cured or waived or shall not
have ceased to exist, or (c) that the principal of and accrued interest on
the Securities of any series shall have been declared due and payable
pursuant to Section 701 and such declaration shall not have been rescinded
and annulled as provided in Section 702, then:
(1) the holders of all Senior Indebtedness shall first
be entitled to receive payment of the full amount due
thereon, or provision shall be made for such payment in
money or money's worth, before the Holders of any of the
Securities are entitled to receive a payment on account of
the principal of or interest on the indebtedness evidenced
by the Securities, including, without limitation, any
payments made pursuant to Article Four;
(2) any payment by, or distribution of assets of, the
Company of any kind or character, whether in cash, property
or securities, to which any Holder or the Trustee would be
entitled except for the provisions of this Article, shall be
paid or delivered by the person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of
such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of such
Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid after giving effect to any
concurrent payment or distribution (or provision therefor)
to the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of the
indebtedness evidenced by the Securities or to the Trustee
under this Indenture; and
(3) in the event that, notwithstanding the foregoing,
any payment by, or distribution of assets of, the Company of
any kind or character, whether in cash, property or
securities, in respect of principal of or interest on the
Securities or in connection with any repurchase by the
Company of the Securities, shall be received by the Trustee
or any Holder before all Senior Indebtedness is paid in
full, or provision is made for such payment in money or
money's worth, such payment or distribution in respect of
principal of or interest on the Securities or in connection
with any repurchase by the Company of the Securities shall
be paid over to the holders of such Senior Indebtedness or
their representative or representatives or to the trustee or
trustees under any indenture under which any instruments
evidencing any such Senior Indebtedness may have been
issued, ratably as aforesaid, for application to the payment
of all Senior Indebtedness remaining unpaid until all such
Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution (or
provision therefor) to the holders of such Senior
Indebtedness.
Notwithstanding the foregoing, at any time after the 123rd day
following the date of deposit of cash or Government Obligations pursuant to
Section 601 (provided all conditions set out in such Section shall have
been satisfied), the funds so deposited and any interest thereon will not
be subject to any rights of holders of Senior Indebtedness including,
without limitation, those arising under this Article Fourteen; provided
that no event described in clause (e) of Section 701 with respect to the
Company has occurred during such 123-day period.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company
as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan or reorganization or readjustment which
are subordinate in right of payment to all Senior Indebtedness which may at
the time be outstanding to the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into,
another corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Ten hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of
this Section 1402 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article Ten hereof. Nothing in Section 1401 or in this Section
1402 shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 807.
SECTION 1403. DISPUTES WITH HOLDERS OF CERTAIN SENIOR INDEBTEDNESS.
Any failure by the Company to make any payment on or perform any
other obligation in respect of Senior Indebtedness, other than any
indebtedness incurred by the Company or assumed or guaranteed, directly or
indirectly, by the Company for money borrowed (or any deferral, renewal,
extension or refunding thereof) or any other obligation as to which the
provisions of this Section shall have been waived by the Company in the
instrument or instruments by which the Company incurred, assumed,
guaranteed or otherwise created such indebtedness or obligation, shall not
be deemed a default under clause (b) of Section 1402 if (i) the Company
shall be disputing its obligation to make such payment or perform such
obligation and (ii) either (A) no final judgment relating to such dispute
shall have been issued against the Company which is in full force and
effect and is not subject to further review, including a judgment that has
become final by reason of the expiration of the time within which a party
may seek further appeal or review, or (B) in the event that a judgment that
is subject to further review or appeal has been issued, the Company shall
in good faith be prosecuting an appeal or other proceeding for review and a
stay or execution shall have been obtained pending such appeal or review.
SECTION 1404. SUBROGATION.
Senior Indebtedness shall not be deemed to have been paid in full
unless the holders thereof shall have received cash (or securities or other
property satisfactory to such holders) in full payment of such Senior
Indebtedness then outstanding. Subject to the prior payment in full of all
Senior Indebtedness, the rights of the Holders of the Securities shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
any further payments or distributions of cash, property or securities of
the Company applicable to the holders of the Senior Indebtedness until all
amounts owing on the Securities shall be paid in full; and such payments or
distributions of cash, property or securities received by the Holders of
the Securities, by reason of such subrogation, which otherwise would be
paid or distributed to the holders of such Senior Indebtedness shall, as
between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders, be deemed to be a payment by the Company to
or on account of Senior Indebtedness, it being understood that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
SECTION 1405. OBLIGATION OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as among the Company,
its creditors other than the holders of Senior Indebtedness and the
Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of and interest on the
Securities as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of
the Holders and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or
any Holder from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under
this Article of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any
such remedy.
Upon any payment or distribution of assets or securities of the
Company referred to in this Article, the Trustee and the Holders shall be
entitled to rely upon any order or decree of a court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed
thereon, and all other facts pertinent thereto or to this Article.
SECTION 1406. PRIORITY OF SENIOR INDEBTEDNESS UPON MATURITY.
Upon the maturity of the principal of any Senior Indebtedness by
lapse of time, acceleration or otherwise, all matured principal of Senior
Indebtedness and interest and premium, if any, thereon shall first be paid
in full before any payment of principal or premium, if any, or interest, if
any, is made upon the Securities or before any Securities can be acquired
by the Company or any sinking fund payment is made with respect to the
Securities (except that required sinking fund payments may be reduced by
Securities acquired before such maturity of such Senior Indebtedness).
SECTION 1407. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS.
The Trustee shall be entitled to all rights set forth in this
Article with respect to any Senior Indebtedness at any time held by it, to
the same extent as any other holder of Senior Indebtedness. Nothing in this
Article shall deprive the Trustee of any of its rights as such holder.
SECTION 1408. NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION.
Notwithstanding the provisions of this Article or any other
provision of the Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts which would prohibit the making of any
payment of moneys to or by the Trustee unless and until the Trustee shall
have received written notice thereof from the Company, from a Holder or
from a holder of any Senior Indebtedness or from any representative or
representatives of such holder and, prior to the receipt of any such
written notice, the Trustee shall be entitled, subject to Section 801, in
all respects to assume that no such facts exist; provided, however, that,
if prior to the fifth Business Day preceding the date upon which by the
terms hereof any such moneys may become payable for any purpose, or in the
event of the execution of an instrument pursuant to Section 602
acknowledging satisfaction and discharge of this Indenture, then if prior
to the second Business Day preceding the date of such execution, the
Trustee shall not have received with respect to such moneys the notice
provided for in this Section, then, anything herein contained to the
contrary notwithstanding, the Trustee may, in its discretion, receive such
moneys and/or apply the same to the purpose for which they were received,
and shall not be affected by any notice to the contrary, which may be
received by it on or after such date; provided, however, that no such
application shall affect the obligations under this Article of the persons
receiving such moneys from the Trustee.
SECTION 1409. MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS.
The holders of Senior Indebtedness may, without affecting in any
manner the subordination of the payment of the principal of and premium, if
any, and interest, if any, on the Securities, at any time or from time to
time and in their absolute discretion, agree with the Company to change the
manner, place or terms of payment, change or extend the time of payment of,
or renew or alter, any Senior Indebtedness, or amend or supplement any
instrument pursuant to which any Senior Indebtedness is issued, or exercise
or refrain from exercising any other of their rights under the Senior
Indebtedness including, without limitation, the waiver of default
thereunder, all without notice to or assent from the Holders or the
Trustee.
SECTION 1410. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR
INDEBTEDNESS.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and
objectives as are specifically set forth in this Indenture, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall
not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness, and shall not be liable to any such holders if it shall
mistakenly pay over or deliver to the Holders or the Company or any other
Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article or otherwise.
SECTION 1411. PAYING AGENTS OTHER THAN THE TRUSTEE.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
shall otherwise require) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article in addition to or in place of
the Trustee; provided, however, that Sections 1407, 1408 and 1410 shall not
apply to the Company if it acts as Paying Agent.
SECTION 1412. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT IMPAIRED.
No right of any present or future holder of Senior Indebtedness
to enforce the subordination herein shall at any time or in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof any
such holder may have or be otherwise charged with.
SECTION 1413. EFFECT OF SUBORDINATION PROVISIONS; TERMINATION.
Notwithstanding anything contained herein to the contrary, other
than as provided in the immediately succeeding sentence, all the provisions
of this Indenture shall be subject to the provisions of this Article, so
far as the same may be applicable thereto.
Notwithstanding anything contained herein to the contrary, the
provisions of this Article Fourteen shall be of no further effect with
respect to all or a portion of Senior Indebtedness, and the Securities
shall no longer be subordinated in right of payment to the prior payment of
such Senior Indebtedness, to the extent that the Company shall have
delivered to the Trustee a notice to such effect specifying therein such
Senior Indebtedness to which the Securities shall no longer be
subordinated. Any such notice delivered by the Company shall not be deemed
to be a supplemental indenture for purposes of Article Twelve hereof.
_________________________
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the day and year first above written.
THE WASHINGTON WATER POWER COMPANY
By:________________________________________
WILMINGTON TRUST COMPANY, Trustee
By:________________________________________
Exhibit 4(a)-11
THE WASHINGTON WATER POWER COMPANY
OFFICER'S CERTIFICATE
(Under Section 301 of the Indenture,
dated as of ________ 1, 199_)
I, the undersigned Lawrence J. Pierce, a Vice President
and the Treasurer of THE WASHINGTON WATER POWER COMPANY (the
"Company"), in accordance with Section 301 of the Indenture,
dated as of ___________ 1, 199_ (the "Indenture", capitalized
terms used herein and not defined herein having the meanings
specified in the Indenture), of the Company to Wilmington Trust
Company, trustee (the "Trustee"), do hereby establish a series of
Securities having the terms and characteristics set forth below
(the lettered clauses set forth below corresponding to the
lettered subsections of Section 301 of the Indenture):
(a) the title of the Securities of such series shall
be " __% Junior Subordinated Deferrable Interest Debentures,
Series A (the "Debentures"); the Debentures are to be issued
and sold to Washington Water Power Capital I, a Washington
Water Power Trust; and all references herein to the
Declaration, the Institutional Trustee and the Trust
Securities relate to such Washington Water Power Trust;
(b) the aggregate principal amount of Debentures which
may be authenticated and delivered under the Indenture shall
be limited to $_____________, except as contemplated in
Section 301(b) of the Indenture;
(c) interest on the Debentures shall be payable to the
Person or Persons in whose names the Debentures are
registered at the close of business on the Regular Record
Date for such interest, except as otherwise expressly
provided in the form of Debenture attached hereto and hereby
authorized and approved;
(d) the principal of the Debentures shall be payable
on ________ __, 20__;
(e) (i) the Debentures shall bear interest at the
rate of __% per annum of the principal amount thereof,
payable _________ in arrears on _____________ of each year
(each, an "Interest Payment Date"), commencing ________ __,
199_;
(ii) interest on the Debentures shall accrue
from, and including, the date of original issuance and will
accrue to, and including, the first Interest Payment Date,
and thereafter will accrue from, and including, the day next
succeeding the most recent Interest Payment Date through
which interest has been paid or duly provided for to, and
including, the next succeeding Interest Payment Date (each
such period of interest accrual being hereinafter called a
"Scheduled Interest Period"). In the event that any
Interest Payment Date is not a Business Day, then payment of
the interest payable on such date shall be made on the next
succeeding Business Day, except that, if such Business Day
is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day; and, if
such payment is made or duly provided for on such next
succeeding Business Day, no interest shall accrue on such
amount for the period from and after such Interest Payment
Date to such Business Day; and, if such payment is made or
duly provided for on such next preceding Business Day, the
amount of such payment shall not reflect any reduction in
the amount of interest accrued;
(iii) interest that is in arrears for more
than one Scheduled Interest Period shall bear additional
interest on the amount thereof, to the extent permitted by
law, at the rate of __% per annum thereof, compounded
_________;
(iv) so long as no Event of Default shall have
occurred and be continuing, the Company shall have the
right, at any time and from time to time, to extend the
interest payment period with respect to the Debentures to a
period not exceeding __ consecutive Scheduled Interest
Periods from the last Interest Payment Date to which
interest was paid in full (an "Extension Period") during
which period interest will be compounded _________. Prior
to the termination of the Extension Period, the Company may,
and at the end of the Extension Period the Company shall,
pay all interest accrued (together with interest thereon at
the rate of __% per annum to the extent permitted by
applicable law). Upon such payment in full, such Extension
Period shall terminate. Prior to the termination of any
such Extension Period, the Company may further extend the
interest payment period; provided, however, that such
Extension Period, together with all such previous and
further extensions thereof, shall not exceed __ consecutive
Scheduled Interest Periods or extend beyond the Stated
Maturity of the Debentures. Upon termination of any such
Extension Period and upon the payment of all accrued
interest then due, the Company may elect to begin a new
Extension Period, subject to the above requirements. No
interest shall be due and payable during an Extension
Period, except at the end thereof. The Company shall give
the Trustee and the trustees of the Washington Water Power
Trust written notice of (i) any election by the Company to
initiate an Extension Period and the duration thereof, (ii)
any election by the Company to extend an Extension Period
beyond the date on which that Extension Period is then
scheduled to terminate and the duration of such extension
and (iii) any election by the Company to make a full payment
of interest accrued on the Debentures on any date during an
Extension Period and the amount of such payment. The
Company shall give such notice of any election described in
clause (i) or (ii) in the next preceding sentence not less
than 10 days prior to the Regular Record Date with respect
to the next Interest Payment Date on which interest on the
Debentures would otherwise be payable; and the Company shall
give such notice of any election described in clause (iii)
in the next preceding sentence in accordance with the
provisions of Section 307 of the Indenture.
(f) the corporate trust office of Wilmington Trust
Company in Wilmington, Delaware shall be the place at which
(i) the principal of, premium, if any, and interest, if any,
on the Debentures at Maturity shall be payable upon
presentment, interest prior to Maturity to be paid as
specified in the form of Debenture attached hereto, (ii)
registration of transfer of the Debentures may be effected,
(iii) exchanges of Debentures may be effected and (iv)
notices and demands to or upon the Company in respect of the
Debentures and the Indenture may be served; and Wilmington
Trust Company shall be the Security Registrar and a Paying
Agent for the Debentures; provided, however, that the
Company reserves the right to change, by one or more
Officer's Certificates supplemental to this Officer's
Certificate, any such place or the Security Registrar or
such Paying Agent; and provided, further, that the Company
reserves the right to designate, by one or more Officer's
Certificates supplemental to this Officer's Certificate, its
principal corporate office in Spokane, Washington as any
such place or itself as the Security Registrar;
(g) (i) the Debentures shall be subject to redemption
at any time on or after ________ __, 20__, in whole or in
part, at the election of the Company, at a redemption price
equal to 100% of the principal amount thereof plus accrued
interest, if any (including Additional Interest (as defined
herein), if any), to the date fixed for redemption;
provided, however, that the Debentures shall not be so
redeemable in part unless all interest (including any
Additional Interest) accrued through the most recent
_________ interest period ended on or prior to the date
fixed for redemption shall have been paid;
(ii) the Debentures shall be subject to
redemption, in whole but not in part, at the election of the
Company, on any date within 90 days of the occurrence, and
during the continuation, of a Tax Event (as defined herein)
at a redemption price equal to ___% of the principal amount
thereof plus accrued interest, if any (including Additional
Interest, if any), to the date fixed for redemption;
"Tax Event" means the receipt by the Company of an
opinion of counsel to the effect that, as a result of (a)
any amendment to, clarification of or change (including any
announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein
affecting taxation, (b) any judicial decision, official
administrative pronouncement, ruling, regulatory procedure,
notice or announcement, including any notice or announcement
of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to,
clarification of, or change in the official position or the
interpretation of such Administrative Action or judicial
decision that differs from the theretofore generally
accepted position, in each case, by any legislative body,
court, governmental authority or regulatory body,
irrespective of the manner in which such amendment,
clarification or change is made known, which amendment,
clarification, or change is effective or such pronouncement
or decision is announced, in each case, on or after, the
date of the original issuance of the Debentures (including
the enactment of any legislation or the publication of any
judicial decision or regulatory determination on or after
such date), there is more than an insubstantial risk that
(i) the Washington Water Power Trust, if any, holding the
Debentures is or will be within 90 days of the date of such
amendment, clarification or change, subject to United States
federal income tax with respect to interest accrued or
received on the Debentures, (ii) such Washington Water Power
Trust is, or will be within 90 days of the date of such
amendment, clarification or change, subject to more than a
de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable on the Debentures is not,
or within 90 days of the date of such amendment,
clarification or change will not be, deductible, in whole or
in part, by the Company for United States federal income tax
purposes;
(h) inapplicable;
(i) inapplicable;
(j) inapplicable;
(k) inapplicable;
(l) inapplicable;
(m) inapplicable;
(n) inapplicable;
(o) inapplicable;
(p) inapplicable;
(q) inapplicable;
(r) inapplicable;
(s) (i) the Debentures are to be initially
registered in the name of Wilmington Trust Company, as
Institutional Trustee of the Washington Water Power Trust.
The Debentures shall not be transferable, nor shall any
purported transfer be registered, except (A) to a nominee of
such Institutional Trustee, to such Institutional Trustee by
such nominee, by such Institutional Trustee to another
nominee, by any such nominee to a successor nominee or by
such Institutional Trustee or any nominee thereof to a
successor Institutional Trustee or a nominee thereof or (B)
to the holders of Trust Securities in the event of the
termination of the Washington Water Power Trust in
accordance with the provisions of the Declaration;
(ii) no service charge shall be made for the
registration of transfer or exchange of Debentures;
provided, however, that, after any distribution of the
Debentures contemplated in clause (i)(B) above, the Company
may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection with the
exchange or transfer;
(t) (i) "Business Days" shall be determined by
reference to both the City of Wilmington, Delaware or other
Place of Payment and to The City of New York;
(ii) reference is made to clause(e)(ii) above; and
(u) (i) if, at any time while the Institutional
Trustee is the Holder of the Debentures, the Washington
Water Power Trust or the Institutional Trustee is required
to pay any taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes)
imposed by the United States, or any other taxing authority,
then, in any such case, the Company will pay as additional
interest ("Additional Interest") on the Debentures such
additional amounts as shall be required so that the net
amounts received and retained by the Washington Water Power
Trust and the Institutional Trustee after paying such taxes,
duties, assessments or other governmental charges will be
equal to the amounts such trust and trustee would have
received had no such taxes, duties, assessments or other
governmental charges been imposed;
(ii) if at any time the Debentures are to be held
by a securities depositary, the Company may at such time
establish the matters contemplated in clause (q) in the
second paragraph of Section 301 of the Indenture in an
Officer's Certificate supplemental to this Officer's
Certificate; and
(iii) if the Debentures are distributed to the
holders of the Trust Securities upon termination of the
Washington Water Power Trust in accordance with the
provisions of the Declaration, the Company will use all
reasonable efforts to cause the Debentures to be listed on
the New York Stock Exchange or on such other securities
exchange as the Trust Securities (other than Trust
Securities initially issued and sold to the Company) shall
be listed.
(iv) if the Company shall make any deposit of
money and/or Government Obligations with respect to any
Debentures, or any portion of the principal amount thereof,
as contemplated by Section 601 of the Indenture, the Company
shall not deliver an Officer's Certificate described in
clause (z) in the first paragraph of said Section 601 unless
the Company shall also deliver to the Trustee, together with
such Officer's Certificate, either:
(A) an instrument wherein the Company,
notwithstanding the satisfaction and discharge of its
indebtedness in respect of the Debentures, shall assume
the obligation (which shall be absolute and
unconditional) to irrevocably deposit with the Trustee
or Paying Agent such additional sums of money, if any,
or additional Government Obligations (meeting the
requirements of Section 601), if any, or any
combination thereof, at such time or times, as shall be
necessary, together with the money and/or Government
Obligations theretofore so deposited, to pay when due
the principal of and premium, if any, and interest due
and to become due on such Debentures or portions
thereof, all in accordance with and subject to the
provisions of said Section 601; provided, however, that
such instrument may state that the obligation of the
Company to make additional deposits as aforesaid shall
be subject to the delivery to the Company by the
Trustee of a notice asserting the deficiency
accompanied by an opinion of an independent public
accountant of nationally recognized standing, selected
by the Trustee, showing the calculation thereof; or
(B) an Opinion of Counsel to the effect that the
Holders of such Debentures, or portions of the
principal amount thereof, will not recognize income,
gain or loss for United States federal income tax
purposes as a result of the satisfaction and discharge
of the Company's indebtedness in respect thereof and
will be subject to United States federal income tax on
the same amounts, at the same times and in the same
manner as if such satisfaction and discharge had not
been effected.
IN WITNESS WHEREOF, I have executed this Officer's
Certificate this _____ day of ______________, 199_.
_______________________________
FORM OF DEBENTURE
(See legend at the end of this Security for
restrictions on transfer and change of form)
THE WASHINGTON WATER POWER COMPANY
__% Junior Subordinated Deferrable Interest Debentures, Series A, due 20__
Original Interest Accrual Date: Initial Redemption Date:
Stated Maturity:
Redemption Price:
Interest Rate:
Interest Payment Dates:
Regular Record Dates:
OID: Yes__ No__
Total Amount of OID (%):
Yield to Maturity (%):
Initial Accrual
Period OID (%):
(Constant Yield Method)
This Security is not a Discount Security
within the meaning of the within-mentioned Indenture.
----------------------------------------------
Principal Amount Registered No.
$
THE WASHINGTON WATER POWER COMPANY, a corporation duly
organized and existing under the laws of the State of Washington
(herein called the "Company," which term includes any successor
corporation under the Indenture referred to below), for value
received, hereby promises to pay to
or registered assigns, the principal sum of
DOLLARS
on the Stated Maturity specified above, and to pay interest
thereon from the Original Interest Accrual Date specified above
or from the day next succeeding the most recent Interest Payment
Date through which interest has been paid or duly provided for,
_________ in arrears on the Interest Payment Dates specified
above in each year, commencing with the Interest Payment Date
next succeeding the Original Interest Accrual Date specified
above, and at Maturity, at the Interest Rate per annum specified
above, until the principal hereof is paid or duly provided for
(each such period of interest accrual being hereinafter called a
"Scheduled Interest Period"). The interest so payable, and paid
or duly provided for, on any Interest Payment Date shall, as
provided in such Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date
specified above (whether or not a Business Day) next preceding
such Interest Payment Date. Notwithstanding the foregoing,
interest payable at Maturity shall be paid to the Person to whom
principal shall be paid. Except as otherwise provided in said
Indenture, any such interest not so paid or duly provided for
shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for
the payment of such Unpaid Interest to be fixed by the Trustee,
notice of which shall be given to Holders of Securities of this
series not less than 15 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in said Indenture.
Interest that is in arrears for more than one Scheduled
Interest Period shall bear additional interest on the amount
thereof, to the extent permitted by law, at the rate of __% per
annum thereof, compounded _________.
So long as no Event of Default shall have occurred and be
continuing, the Company shall have the right, at any time and
from time to time, to extend the interest payment period with
respect to the Securities of this Series to a period not
exceeding __ consecutive Scheduled Interest Periods from the last
Interest Payment Date to which interest was paid in full (an
"Extension Period") during which period interest will be
compounded _________. Prior to the termination of the Extension
Period, the Company may, and at the end of the Extension Period
the Company shall, pay all interest accrued on this Security
(together with interest thereon at the rate of __% per annum to
the extent permitted by applicable law). Upon such payment in
full, such Extension Period shall terminate. Prior to the
termination of any such Extension Period, the Company may further
extend the interest payment period; provided, however, that such
Extension Period, together with all such previous and further
extensions thereof, shall not exceed __ consecutive Scheduled
Interest Periods or extend beyond the Stated Maturity of this
Security. Upon termination of any such Extension Period and upon
the payment of all accrued interest then due, the Company may
elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an
Extension Period, except at the end thereof.
Payment of the principal of and premium, if any, on this
Security and interest hereon at Maturity shall be made upon
presentation of this Security at the corporate trust office of
Wilmington Trust Company in Wilmington, Delaware or at such other
office or agency as may be designated for such purpose by the
Company from time to time. Payment of interest on this Security
(other than interest at Maturity) shall be made by check mailed
to the address of the Person entitled thereto as such address
shall appear in the Security Register, except that if such Person
shall be a Washington Water Power Trust (as defined in the
Indenture referred to below) or securities depositary, such
payment may be made by such other means in lieu of check, as
shall be agreed upon by the Company, the Trustee and such Person.
Payment of the principal of and premium, if any, and interest on
this Security, as aforesaid, shall be made in such coin or
currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and
private debts.
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and issuable in one or more series under and equally
secured by an Indenture, dated as of ___________ 1, 199_ (such
Indenture as originally executed and delivered and as
supplemented or amended from time to time thereafter, together
with any constituent instruments establishing the terms of
particular Securities, being herein called the "Indenture"),
between the Company and Wilmington Trust Company, trustee (herein
called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description
of the respective rights, limitations of rights, duties and
immunities of the Company, the Trustee and the Holders of the
Securities thereunder and of the terms and conditions upon which
the Securities are, and are to be, authenticated and delivered
and secured. Capitalized terms used herein and not defined
herein have the meanings specified in the Indenture. The
acceptance of this Security shall be deemed to constitute the
consent and agreement by the Holder hereof to all of the terms
and provisions of the Indenture. This Security is one of the
series designated above.
If any Interest Payment Date, any Redemption Date or the
Stated Maturity shall not be a Business Day (as hereinafter
defined), payment of the amounts due on this Security on such
date may be made on the next succeeding Business Day, except
that, in the case of an Interest Payment Date, if such Business
Day is in the next succeeding calendar year, such payment shall
be made on the next preceding Business Day; and, if such payment
is made or duly provided for on such next succeeding Business
Day, no interest shall accrue on such amounts for the period from
and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to such Business Day; and, if such
payment of interest is made or duly provided for on such next
preceding Business Day, the amount of such payment shall not
reflect any reduction in the amount of interest accrued.
The Securities of this series are subject to redemption at
any time on or after the Initial Redemption Date specified above,
in whole or in part, at the election of the Company, at a
redemption price equal to 100% of the principal amount thereof
plus accrued interest, if any, (including Additional Interest (as
defined herein) if any), to the date fixed for redemption;
provided, however, that the Securities of this series shall not
be so redeemable in part unless all interest (including any
Additional Interest) accrued through the most recent _________
interest period ended on or prior to the date fixed for
redemption shall have been paid.
The Securities of this series are subject to redemption, in
whole but not in part, at the election of the Company, on any
date within 90 days of the occurrence, and during the
continuation, of a Tax Event (as defined herein) at a redemption
price equal to ___% of the principal amount thereof plus accrued
interest, if any (including Additional Interest, if any), to the
date fixed for redemption.
"Tax Event" means the receipt by the Company of an opinion
of counsel to the effect that, as a result of (a) any amendment
to, clarification of or change (including any announced
prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any judicial
decision, official administrative pronouncement, ruling,
regulatory procedure, notice or announcement, including any
notice or announcement of intent to adopt such procedures or
regulations (an "Administrative Action") or (c) any amendment to,
clarification of, or change in the official position or the
interpretation of such Administrative Action or judicial decision
that differs from the theretofore generally accepted position, in
each case, by any legislative body, court, governmental authority
or regulatory body, irrespective of the manner in which such
amendment, clarification or change is made known, which
amendment, clarification, or change is effective or such
pronouncement or decision is announced, in each case, on or
after, the date of the original issuance of the Securities of
this series (including the enactment of any legislation or the
publication of any judicial decision or regulatory determination
on or after such date), there is more than an insubstantial risk
that (i) the Washington Water Power Trust, if any, which is the
Holder of this Security is or will be within 90 days of the date
of such amendment, clarification or change, subject to United
States federal income tax with respect to interest accrued or
received on the Securities of this series, (ii) such Washington
Water Power Trust is, or will be within 90 days of the date of
such amendment, clarification or change, subject to more than a
de minimis amount of taxes, duties or other governmental charges
or (iii) interest payable on the Securities of this series is
not, or within 90 days of the date of such amendment,
clarification or change will not be, deductible, in whole or in
part, by the Company for United States federal income tax
purposes.
Notice of redemption shall be given by mail to Holders of
Securities, not less than 30 days nor more than 60 days prior to
the date fixed for redemption, all as provided in the Indenture.
As provided in the Indenture, notice of redemption at the
election of the Company as aforesaid may state that such
redemption shall be conditional upon the receipt by the Trustee
of money sufficient to pay the principal of and premium, if any,
and interest, if any, on this Security on or prior to the date
fixed for such redemption; a notice of redemption so conditioned
shall be of no force or effect if such money is not so received
and, in such event, the Company shall not be required to redeem
this Security.
In the event of redemption of this Security in part only, a
new Security or Securities of this series, of like tenor,
representing the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.
If, at any time while the Institutional Trustee is the
Holder of the Securities of this series, the Washington Water
Power Trust or the Institutional Trustee is required to pay any
taxes, duties, assessments or governmental charges of whatever
nature (other than withholding taxes) imposed by the United
States, or any other taxing authority, then, in any such case,
the Company will pay as additional interest ("Additional
Interest") on the Securities of this series such additional
amounts as shall be required so that the net amounts received and
retained by the Washington Water Power Trust and the
Institutional Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal to the
amounts such trust and trustee would have received had no such
taxes, duties, assessments or other governmental charges been
imposed.
If an Event of Default with respect to the Securities of
this series shall occur and be continuing, the principal of this
Security may be declared due and payable in the manner and with
the effect provided in the Indenture.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinated and subject in
right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance
hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by
each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon
said provisions.
The Indenture permits, with certain exceptions as therein
provided, the Trustee to enter into one or more supplemental
indentures for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of,
the Indenture with the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all
series then Outstanding under the Indenture, considered as one
class; provided, however, that if there shall be Securities of
more than one series Outstanding under the Indenture and if a
proposed supplemental indenture shall directly affect the rights
of the Holders of Securities of one or more, but less than all,
of such series, then the consent only of the Holders of a
majority in aggregate principal amount of the Outstanding
Securities of all series so directly affected, considered as one
class, shall be required; and provided, further, that if the
Securities of any series shall have been issued in more than one
Tranche and if the proposed supplemental indenture shall directly
affect the rights of the Holders of Securities of one or more,
but less than all, of such Tranches, then the consent only of the
Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected,
considered as one class, shall be required; and provided,
further, that the Indenture permits the Trustee to enter into one
or more supplemental indentures for limited purposes without the
consent of any Holders of Securities. The Indenture also
contains provisions permitting the Holders of a majority in
principal amount of the Securities then Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in
lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in the Indenture and subject to certain
limitations therein set forth, this Security or any portion of
the principal amount hereof will be deemed to have been paid for
all purposes of the Indenture and to be no longer Outstanding
thereunder, and, at the election of the Company, the Company's
entire indebtedness in respect thereof will be satisfied and
discharged, if there has been irrevocably deposited with the
Trustee or any Paying Agent (other than the Company), in trust,
money in an amount which will be sufficient and/or Eligible
Obligations, the principal of and interest on which when due,
without regard to any reinvestment thereof, will provide moneys
which, together with moneys so deposited, will be sufficient to
pay when due the principal of and interest on this Security when
due.
The Indenture contains terms, provisions and conditions
relating to the consolidation or merger of the Company with or
into, and the conveyance or other transfer, or lease, of assets
to, another Person, to the assumption by such other Person, in
certain circumstances, of all of the obligations of the Company
under the Indenture and on the Securities and to the release and
discharge of the Company, in certain circumstances, from such
obligation.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office of Wilmington
Trust Company in Wilmington, Delaware or such other office or
agency as may be designated by the Company from time to time,
duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new
Securities of this series of authorized denominations and of like
tenor and aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only as
registered Securities, without coupons, and in denominations of
$__ and integral multiples thereof. As provided in the Indenture
and subject to certain limitations therein set forth, Securities
of this series are exchangeable for a like aggregate principal
amount of Securities of the same series and Tranche, of any
authorized denominations, as requested by the Holder surrendering
the same, and of like tenor upon surrender of the Security or
Securities to be exchanged at the office of Wilmington Trust
Company in Wilmington, Delaware or such other office or agency as
may be designated by the Company from time to time.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Security for registration
of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this
Security is registered as the absolute owner hereof for all
purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State New York.
As used herein, "Business Day" means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in the City of Wilmington,
Delaware and other city in which is located any office or agency
maintained for the payment of principal, premium, if any, or
interest on this Security and in The City of New York, are
authorized or required by law, regulation or executive order to
remain closed. All other terms used in this Security which are
defined in the Indenture shall have the meanings assigned to them
in the Indenture.
As provided in the Indenture, no recourse shall be had for
the payment of the principal of or premium, if any, or interest
on any Securities, or any part thereof, or for any claim based
thereon or otherwise in respect thereof, or of the indebtedness
represented thereby, or upon any obligation, covenant or
agreement under the Indenture, against, and no personal liability
whatsoever shall attach to, or be incurred by, any incorporator,
shareholder, officer or director, as such, past, present or
future of the Company or of any predecessor or successor
corporation (either directly or through the Company or a
predecessor or successor corporation), whether by virtue of any
constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly agreed and understood that the Indenture and all the
Securities are solely corporate obligations and that any such
personal liability is hereby expressly waived and released as a
condition of, and as part of the consideration for, the execution
of the Indenture and the issuance of the Securities.
Unless the certificate of authentication hereon has been
executed by the Trustee or an Authenticating Agent by manual
signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.
THE WASHINGTON WATER POWER COMPANY
By: _____________________________
[Title]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
Dated: ________________________
___________________________ OR ____________________,
___________________________, ____________________,
AS TRUSTEE AS TRUSTEE
By: _________________________ BY:[ ],
Authorized Officer AS AUTHENTICATING AGENT
By: __________________________
Authorized Officer
This Security shall not be transferable, nor shall be any
purported transfer be registered, except (a) to a nominee of
Wilmington Trust Company, as Institutional Trustee, to such
Institutional Trustee by such nominee, by such Institutional
Trustee to another nominee, by any such nominee to a successor
nominee or by such Institutional Trustee or any nominee thereof
to a successor Institutional Trustee or a nominee thereof or (B)
to the holders of Trust Securities in the event of the
termination of the Washington Water Power Trust in accordance
with the provisions of the Declaration.
__________________
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
_________________________________________________________________
[please insert social security or other identifying
number of assignee]
_________________________________________________________________
[please print or typewrite name and address of assignee]
_________________________________________________________________
the within Security of THE WASHINGTON WATER POWER COMPANY and
does hereby irrevocably constitute and appoint __________________
_________________________________________, Attorney, to transfer
said Security on the books of the within-mentioned Company, with
full power of substitution in the premises.
Dated: ___________________
____________________________________________
Notice: The signature to this assignment must correspond with
the name as written upon by face of the Security in every
particular without alteration or enlargement or any change
whatsoever.
Exhibit 4(a)-14
=========================================
SECURITIES GUARANTEE AGREEMENT
Washington Water Power Capital I
Dated as of ______, 199_
=========================================
THE WASHINGTON WATER POWER COMPANY
Reconciliation and Tie between Trust Indenture Act of 1939 and
Securities Guarantee, dated as of ________ 1, 199_*
---------------------------------------------------------------
Securities
Trust Indenture Act Section Guarantee Section(s)
--------------------------- --------------------
Section 310(a)(1) . . . . . . . . . . . . . . 4.1(a)
(a)(2) . . . . . . . . . . . . . . . . . 4.1(a)
(a)(3) . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . 2.8, 4.1(c), 4.1(d)
(c) . . . . . . . . . . . . . . . . . Not Applicable
Section 311(a) . . . . . . . . . . . . . . . 2.2(b)
(b) . . . . . . . . . . . . . . . . . 2.2(b)
(c) . . . . . . . . . . . . . . . . . Not Applicable
Section 312(a) . . . . . . . . . . . . . . . 2.2(a)
(b) . . . . . . . . . . . . . . . . . 2.2(b)
Section 313 . . . . . . . . . . . . . . . . . 2.3
Section 314(a) . . . . . . . . . . . . . . . 2.4
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . 2.5
(d) . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . 1.1 (Definition of
Officer's
Certificate
Section 315(a) . . . . . . . . . . . . . . . 3.1(c)
(b) . . . . . . . . . . . . . . . . . 2.7(a)
(c) . . . . . . . . . . . . . . . . . 3.1(d)
(d) . . . . . . . . . . . . . . . . . 3.1(e)
Section 316(a)(1) . . . . . . . . . . . . . . 2.6, 5.4(a)
(b) . . . . . . . . . . . . . . . . . 5.4(b)
(c) . . . . . . . . . . . . . . . . . Not Applicable
Section 317 . . . . . . . . . . . . . . . . . 3.1(f)
Section 318 . . . . . . . . . . . . . . . . . 2.1
_____________________________
* This Reconciliation and Tie does not constitute part of the
Securities Guarantee and shall not affect the interpretation
of any of its terms or provisions.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . 5
SECTION 2.2 Lists of Holders of Securities . . . . . . 5
SECTION 2.3 Reports by the Guarantee Trustee . . . . . 5
SECTION 2.4 Periodic Reports to Guarantee Trustee . . . 5
SECTION 2.5 Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . 6
SECTION 2.6 Events of Default; Waiver . . . . . . . . . 6
SECTION 2.7 Event of Default; Notice . . . . . . . . . 6
SECTION 2.8 Conflicting Interests . . . . . . . . . . . 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee
Trustee . . . . . . . . . . . . . . . . . . 7
SECTION 3.2 Certain Rights of Guarantee Trustee . . . . 8
SECTION 3.3 Not Responsible for Recitals or Issuance
of Guarantee Securities . . . . . . . . . 10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility . . . . . 10
SECTION 4.2 Appointment, Removal and Resignation of
Guarantee Trustee . . . . . . . . . . . . 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . 12
SECTION 5.2 Waiver of Notice and Demand . . . . . . . 12
SECTION 5.3 Obligations Not Affected . . . . . . . . 12
SECTION 5.4 Rights of Holders . . . . . . . . . . . . 13
SECTION 5.5 Guarantee of Payment . . . . . . . . . . 13
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . 13
SECTION 5.7 Independent Obligations . . . . . . . . . 14
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking . . . . . . . . . . . . . . . . . 14
SECTION 6.2 Effect of Subordination Provisions;
Termination . . . . . . . . . . . . . . . 14
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . 15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . 15
SECTION 8.2 Indemnification . . . . . . . . . . . . . 15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Assignment . . . . . . . . . . . . . . . 16
SECTION 9.2 Successors and Assigns . . . . . . . . . 16
SECTION 9.3 Amendments . . . . . . . . . . . . . . . 16
SECTION 9.4 Notices . . . . . . . . . . . . . . . . . 16
SECTION 9.5 Benefit . . . . . . . . . . . . . . . . . 17
SECTION 9.6 Governing Law . . . . . . . . . . . . . . 17
SECTION 9.7 Counterparts . . . . . . . . . . . . . . 18
SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Securities Guarantee"),
dated as of ______, 199_, is executed and delivered by The
Washington Water Power Company, a Washington corporation (the
"Guarantor"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity, but solely as trustee
(the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Securities (as defined
herein) of Washington Water Power Capital I, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the "Declaration"), dated as of ______,
199_, among the trustees of the Issuer named therein, the
Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof __________ securities,
having an aggregate liquidation amount of $___________,
designated the ____% _________ Securities, Series A (the
"Securities");
WHEREAS, as incentive for the Holders to purchase the
Securities, the Guarantor desires irrevocably and unconditionally
to agree, to the extent set forth in this Securities Guarantee,
to pay to the Holders of the Securities the Guarantee Payments
(as defined herein); and
WHEREAS, the Guarantor is also executing and delivering
a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Securities Guarantee for
the benefit of the holders of the Common Securities (as defined
herein), except that if an Event of Default (as defined in the
Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments (as
defined in the Common Securities Guarantee) under the Common
Securities Guarantee are subordinated to the rights of Holders of
Securities to receive Guarantee Payments under this Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by
each Holder of Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Securities
Guarantee but not defined in the preamble above
have the respective meanings assigned to them in
this Section 1.1;
(b) terms defined in the Declaration as at the date of
execution of this Securities Guarantee have the
same meaning when used in this Securities
Guarantee unless otherwise defined in this
Securities Guarantee;
(c) a term defined anywhere in this Securities
Guarantee has the same meaning throughout;
(d) all references to "the Securities Guarantee" or
"this Securities Guarantee" are to this Securities
Guarantee as modified, supplemented or amended
from time to time;
(e) all references in this Securities Guarantee to
Articles and Sections are to Articles and Sections
of this Securities Guarantee, unless otherwise
specified;
(f) a term defined in the Trust Indenture Act has the
same meaning when used in this Securities
Guarantee, unless otherwise defined in this
Securities Guarantee or unless the context
otherwise requires; and
(g) a reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term in
---------
Rule 405 of the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Business Day" means any day other than a day on which
------------
banking institutions in the City of New York, New York are
authorized or required by any applicable law to close.
"Common Securities" means the securities representing
-----------------
common undivided beneficial interests in the assets of the
Issuer.
"Corporate Trust Office" means the office of the
----------------------
Guarantee Trustee at which the corporate trust business of the
Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this
Agreement is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890.
"Covered Person" means any Holder or beneficial owner of
--------------
Securities.
"Debentures" means the series of junior subordinated
----------
debt securities of the Guarantor designated the ____%
Junior Subordinated Deferrable Interest Debentures, Series A, due
20__ held by the Institutional Trustee of the Issuer.
"Event of Default" means a default by the Guarantor on
----------------
any of its payment or other obligations under this Securities
Guarantee.
"Guarantee Payments" means the following payments or
------------------
distributions, without duplication, with respect to the
Securities, to the extent not paid or made by the Issuer: (i) any
accrued and unpaid Distributions that are required to be paid on
such Securities to the extent the Issuer shall have funds
available therefor, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent the Issuer shall have funds
available therefor, with respect to any Securities called for
redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to
the Holders in exchange for Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Securities
to the date of payment and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Holder" means any holder, as registered on the books
------
and records of the Issuer of any Securities; provided, however, that
in determining whether the holders of the requisite percentage of
Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any
------------------
Affiliate of the Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.
"Indenture" means the Indenture dated as of ______ 1,
---------
199_, between the Guarantor (the "Debenture Issuer") and
Wilmington Trust Company, as trustee, as supplemented, pursuant
to which certain subordinated debt securities of the Debenture
Issuer are to be issued to the Property Trustee of the Issuer.
"Majority in liquidation amount of the Securities"
------------------------------------------------
means, except as provided by the Trust Indenture Act, a vote
by Holder(s) of Securities, voting separately as a class, of more
than 50% of the liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Securities.
"Officer's Certificate" means, with respect to any
---------------------
Person, a certificate signed by an Authorized Officer of such
Person. Any Officer's Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Securities Guarantee shall include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by the officer in
rendering the Officer's Certificate;
(c) a statement that such officer has made such
examination or investigation as, in such officer's opinion,
is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any
------
individual, corporation, estate, partnership, joint venture,
association, joint stock company, limited liability company,
trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Guarantee Trustee" means Wilmington Trust Company, a
-----------------
Delaware banking corporation, until a Successor Guarantee Trustee
has been appointed and has accepted such appointment pursuant to
the terms of this Securities Guarantee and thereafter means each
such Successor Guarantee Trustee.
"Responsible Officer" means, with respect to the
-------------------
Guarantee Trustee, any officer within the Corporate Trust Office
of the Guarantee Trustee, including any vice president, any
assistant vice president, any assistant secretary, the treasurer,
any assistant treasurer or other officer of the Corporate Trust
Office of the 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 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
-------------------
1939, as amended.
"Trust Securities" means the Common Securities and the
----------------
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(a) This Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be
part of this Securities Guarantee and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this
Securities Guarantee limits, qualifies or conflicts with the
duties imposed by Section 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Guarantee Trustee
with a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such date, (i) within 1
Business Day after January 1 and June 30 of each year, and (ii)
at any other time, within 30 days of receipt by the Guarantor of
a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Guarantee
Trustee; provided, however, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders
given to the Guarantee Trustee by the Guarantor. The Guarantee
Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of
the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee
--------------------------------
Within 60 days after May 15 of each year, the Guarantee
Trustee shall provide to the Holders of the Securities such
reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee
-------------------------------------
The Guarantor shall provide to the Guarantee Trustee
such documents, reports and information as required by Section
314 (if any) and the compliance certificate required by Section
314 of the Trust Indenture Act in the form, in the manner and at
the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee
such evidence of compliance with any conditions precedent, if
any, provided for in this Securities Guarantee that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of
an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of
Securities may, by vote, on behalf of the Holders of all of the
Securities, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Securities Guarantee,
but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
------------------------
(a) The Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Securities, notices
of all Events of Default actually known to a Responsible Officer
of the Guarantee Trustee, unless such defaults have been cured
before the giving of such notice; provided, however, that the
Guarantee Trustee shall be protected in withholding such notice
if and so long as a Responsible Officer of the Guarantee Trustee
in good faith determines that the withholding of such notice is
in the interests of the Holders of the Securities.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee
shall have received written notice, or a Responsible Officer of
the Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically
described in this Securities Guarantee for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee
------------------------------------------
(a) This Securities Guarantee shall be held by the
Guarantee Trustee for the benefit of the Holders of the
Securities, and the Guarantee Trustee shall not transfer this
Securities Guarantee to any Person except a Holder of Securities
exercising his or her rights pursuant to Section 5.4(b) 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 actually known to a
Responsible Officer of the Guarantee Trustee has occurred and is
continuing, the Guarantee Trustee shall enforce this Securities
Guarantee for the benefit of the Holders of the Securities.
(c) Except during the continuance of an Event of
Default,
(i) the Guarantee Trustee undertakes to perform
only such duties as are specifically set forth in this
Securities Guarantee, and no implied covenants shall be read
into this Securities Guarantee against the Guarantee
Trustee; and
(ii) in the absence of bad faith on its part, the
Guarantee Trustee may, with respect to Securities of such
series, conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this
Securities Guarantee; but in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Securities Guarantee.
(d) In case an Event of Default shall have occurred
and be continuing, the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Securities Guarantee,
and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(e) No provision of this Securities Guarantee shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) this subsection shall not be construed to limit
the effect of subsection (c) of this Section;
(ii) the Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer of the Guarantee Trustee, unless it shall be proved
that the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation amount of
the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Securities
Guarantee; and
(iv) no provision of this Securities Guarantee
shall require the Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of
any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it
under the terms of this Securities Guarantee or indemnity,
reasonably satisfactory to the Guarantee Trustee, against
such risk or liability is not reasonably assured to it.
(f) The Guarantee Trustee shall be authorized to
undertake all actions set forth in Section 317(a) of the
Trust Indenture Act.
SECTION 3.2 Certain Rights of Guarantee Trustee
-----------------------------------
(a) Subject to the provisions of Section 3.1 and to
the applicable provisions of the Trust Indenture Act:
(i) The Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or
parties.
(ii) Any request, direction or act of the
Guarantor contemplated by this Securities Guarantee shall be
sufficiently evidenced by an Officer's Certificate, or as
otherwise expressly provided herein.
(iii) Whenever, in the administration of this
Securities Guarantee the Guarantee Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officer's
Certificate.
(iv) The Guarantee Trustee may consult with
counsel of its selection, and the written advice or opinion
of such counsel with respect to legal matters shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon such advice or opinion; and
any such counsel may be counsel to the Guarantor or any of
its Affiliates and may include any of its employees.
(v) The Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Securities Guarantee at the request or direction of any
Holder pursuant to this Securities Guarantee, 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 complying
with such request or direction.
(vi) 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 any such further
inquiry or investigation, it shall (subject to applicable
legal requirements) be permitted to examine, during usual
business hours, the books, records and premises of the
Issuer or the Guarantor, personally or by agent or attorney.
(vii) The 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.
(viii) The Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof.
(ix) Any action taken by the Guarantee Trustee or
its agents hereunder shall bind the Holders of the
Securities, and the signature of the Guarantee Trustee or
its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to
inquire as to the authority of the Guarantee Trustee to so
act or as to its compliance with any of the terms and
provisions of this Securities Guarantee, both of which shall
be conclusively evidenced by the Guarantee Trustee's or its
agent's taking such action.
(b) No provision of this Securities Guarantee 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. No permissive or discretionary
power or authority available to the Guarantee Trustee shall be
construed to be a duty or obligation.
SECTION 3.3 Not Responsible for Recitals or Issuance of
-------------------------------------------
Guarantee Securities
--------------------
The recitals contained in this Securities Guarantee
shall be taken as the statements of the Guarantor, and the
Guarantee Trustee does not assume any responsibility for their
correctness. The Guarantee Trustee makes no representation as to
the validity or sufficiency of this Securities Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility
------------------------------
(a) There shall at all times be a Guarantee Trustee
which shall be:
(i) a corporation organized and doing business under
the laws of the United States, any State or Territory
thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined
capital and surplus of at least Fifty Million Dollars
($50,000,000) and subject to supervision or examination by
Federal, State, Territorial or District of Columbia
authority, or
(ii) if and to the extent permitted by the
Commission by rule, regulation or order upon application, a
corporation or other Person organized and doing business
under the laws of a foreign government, authorized under
such laws to exercise corporate trust powers, having a
combined capital and surplus of at least Fifty Million
Dollars ($50,000,000) or the Dollar equivalent of the
applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to
supervision or examination applicable to United States
institutional trustees,
and, in either case, qualified and eligible under this Article
and the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Guarantee
Trustee shall immediately resign in the manner and with the
effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Guarantee Trustee and Guarantor (as
if it were the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
(d) The Guarantee Trustee shall be deemed to be
specifically described in this Securities Guarantee for purposes
of clause (i) of the first provision contained in Section 310(b)
of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Guarantee
-------------------------------------------------
Trustee
-------
(a) Subject to Section 4.2(b), the Guarantee Trustee
may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default under the Indenture.
(b) The Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) 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 his death, removal or resignation. The
Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument in writing signed 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
4.2 within 60 days after delivery of an instrument of removal or
resignation, the Guarantee Trustee resigning or being removed, as
applicable, 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 and prescribe, appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Securities Guarantee or
removal or resignation of the Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Guarantee Trustee all
amounts accrued to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer), as and
when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders
or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of
this Securities Guarantee and of any liability to which it
applies or may apply, presentment, demand for payment, any right
to require a proceeding first against the Issuer or any other
Person before proceeding against the Guarantor, protest, notice
of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of
the Guarantor under this Securities Guarantee shall in no way be
affected or impaired by reason of the happening from time to time
of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
relating to the 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 Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Securities (other than an extension of time
for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension
of any interest payment period on the Debentures);
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Holders
pursuant to the terms of the 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
Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of
the Securities have the right to direct the time, method and
place of conducting of any proceeding for any remedy available to
the Guarantee Trustee in respect of this Securities Guarantee or
exercising any trust or power conferred upon the Guarantee
Trustee under this Securities Guarantee.
(b) If the Guarantee Trustee fails to enforce such
Securities Guarantee, any Holder of Securities may institute a
legal proceeding directly against the Guarantor to enforce the
Guarantee Trustee's rights under this Securities Guarantee,
without first instituting a legal proceeding against the Issuer,
the Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action
be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
--------------------
This Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any)
rights of the Holders of Securities against the Issuer in respect
of any amounts paid to such Holders by the Guarantor under this
Securities Guarantee; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this
Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Securities Guarantee. If
any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with
respect to the Securities, and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Securities Guarantee
notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking
-------
This Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the
Guarantor and (ii) pari passu with the Common Securities
Guarantee and any other guarantee now or hereafter entered into
by the Guarantor with respect to any preferred or capital securities
issued by any trust, partnership or other entity which is a
financing vehicle of the Guarantor, except that, where an Event of
Default (as defined in the Indenture) occurs and is continuing,
the rights of holders of the Common Securities to payment in respect
of Distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights to payment of Holders of
Securities.
SECTION 6.2 Effect of Subordination Provisions; Termination
-----------------------------------------------
Notwithstanding anything contained herein to the
contrary, other than as provided in the immediately succeeding
sentence, all the provisions of this Securities Guarantee shall
be subject to the provisions of this Article Six, so far as the
same may be applicable thereto.
Notwithstanding anything contained herein to the
contrary, the provisions of Section 6.1(i) shall be of no further
effect with respect to all or a portion of all other liabilities
of the Guarantor, and this Securities Guarantee shall no longer
be subordinated in right of payment to such other liabilities of
the Guarantor, to the extent that the Guarantor shall have
delivered to the Guarantee Trustee a notice to such effect
specifying therein such other liabilities to which this
Securities Guarantee shall no longer be subordinated and shall
have taken correlative action with respect to the Common
Securities Guarantee.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the
Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Securities Guarantee will
continue to be effective or will be reinstated, as the case may
be, if at any time any Holder of Securities must restore payment
of any sums paid under the Securities or under this Securities
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Securities Guarantee
and in a manner that such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such
Indemnified Person by this Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
SECTION 8.2 Indemnification
---------------
The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against,
or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Assignment
----------
The Guarantor may assign its obligations under this
Securities Guarantee and thereupon be released and discharged
from all obligations hereunder upon compliance with the
conditions set forth in Section 1005(a)(i)-(iv) of the Indenture.
SECTION 9.2 Successors and Assigns
----------------------
All guarantees and agreements contained in this
Securities Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and
shall inure to the benefit of the Holders of the Securities then
outstanding.
SECTION 9.3 Amendments
----------
Except with respect to any changes that do not
adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Securities Guarantee may only
be amended with the prior approval of the Holders of at least a
Majority in liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding
Securities. The provisions of Section 12.2 of the Declaration
with respect to meetings of Holders of the Securities apply to
the giving of such approval.
SECTION 9.4 Notices
-------
All notices provided for in this Securities Guarantee
shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by first class mail,
as follows:
(a) If given to the Guarantee Trustee, at the
Guarantee Trustee's mailing address set forth below (or such
other address as the Guarantee Trustee may give notice of to the
Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: (302) 651-1576
(b) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the
Guarantor may give notice of to the Holders of the Securities):
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Telecopy: (509) 482-4879
(c) If given to any Holder of Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given
when received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 9.5 Benefit
-------
This Securities Guarantee is solely for the benefit of
the Holders of the Securities and, subject to Section 3.1(a), is
not separately transferable from the Securities.
SECTION 9.6 Governing Law
-------------
THIS SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 9.7 Counterparts
------------
This Securities Guarantee may contain more than one
counterpart of the signature page and this Securities Guarantee
may be executed by the affixing of the signature of each of the
parties hereto to one of such counterpart signature pages. All
of such counterpart signature pages shall be read as though one,
and they shall have the same force and effect as though all of
the signers had signed a single signature page.
THIS SECURITIES GUARANTEE is executed as of the day and
year first above written.
THE WASHINGTON WATER POWER
COMPANY, as Guarantor
By: ________________________________________
Name: _____________
Title: _____________
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Guarantee Trustee
By: ________________________________________
Name: _____________
Title: _____________
Exhibit 4(a)-15
=========================================
SECURITIES GUARANTEE AGREEMENT
Washington Water Power Capital II
Dated as of ______, 199_
=========================================
THE WASHINGTON WATER POWER COMPANY
Reconciliation and Tie between Trust Indenture Act of 1939 and
Securities Guarantee, dated as of ________ 1, 199_*
---------------------------------------------------------------
Securities
Trust Indenture Act Section Guarantee Section(s)
--------------------------- --------------------
Section 310(a)(1) . . . . . . . . . . . . . . 4.1(a)
(a)(2) . . . . . . . . . . . . . . . . . 4.1(a)
(a)(3) . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . 2.8, 4.1(c), 4.1(d)
(c) . . . . . . . . . . . . . . . . . Not Applicable
Section 311(a) . . . . . . . . . . . . . . . 2.2(b)
(b) . . . . . . . . . . . . . . . . . 2.2(b)
(c) . . . . . . . . . . . . . . . . . Not Applicable
Section 312(a) . . . . . . . . . . . . . . . 2.2(a)
(b) . . . . . . . . . . . . . . . . . 2.2(b)
Section 313 . . . . . . . . . . . . . . . . . 2.3
Section 314(a) . . . . . . . . . . . . . . . 2.4
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . 2.5
(d) . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . 1.1 (Definition of
Officer's
Certificate
Section 315(a) . . . . . . . . . . . . . . . 3.1(c)
(b) . . . . . . . . . . . . . . . . . 2.7(a)
(c) . . . . . . . . . . . . . . . . . 3.1(d)
(d) . . . . . . . . . . . . . . . . . 3.1(e)
Section 316(a)(1) . . . . . . . . . . . . . . 2.6, 5.4(a)
(b) . . . . . . . . . . . . . . . . . 5.4(b)
(c) . . . . . . . . . . . . . . . . . Not Applicable
Section 317 . . . . . . . . . . . . . . . . . 3.1(f)
Section 318 . . . . . . . . . . . . . . . . . 2.1
_____________________________
* This Reconciliation and Tie does not constitute part of the
Securities Guarantee and shall not affect the interpretation
of any of its terms or provisions.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . 5
SECTION 2.2 Lists of Holders of Securities . . . . . . 5
SECTION 2.3 Reports by the Guarantee Trustee . . . . . 5
SECTION 2.4 Periodic Reports to Guarantee Trustee . . . 5
SECTION 2.5 Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . 6
SECTION 2.6 Events of Default; Waiver . . . . . . . . . 6
SECTION 2.7 Event of Default; Notice . . . . . . . . . 6
SECTION 2.8 Conflicting Interests . . . . . . . . . . . 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee
Trustee . . . . . . . . . . . . . . . . . . 7
SECTION 3.2 Certain Rights of Guarantee Trustee . . . . 8
SECTION 3.3 Not Responsible for Recitals or Issuance
of Guarantee Securities . . . . . . . . . 10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility . . . . . 10
SECTION 4.2 Appointment, Removal and Resignation of
Guarantee Trustee . . . . . . . . . . . . 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . 12
SECTION 5.2 Waiver of Notice and Demand . . . . . . . 12
SECTION 5.3 Obligations Not Affected . . . . . . . . 12
SECTION 5.4 Rights of Holders . . . . . . . . . . . . 13
SECTION 5.5 Guarantee of Payment . . . . . . . . . . 13
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . 13
SECTION 5.7 Independent Obligations . . . . . . . . . 14
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking . . . . . . . . . . . . . . . . . 14
SECTION 6.2 Effect of Subordination Provisions;
Termination . . . . . . . . . . . . . . . 14
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . 15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . 15
SECTION 8.2 Indemnification . . . . . . . . . . . . . 15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Assignment . . . . . . . . . . . . . . . 16
SECTION 9.2 Successors and Assigns . . . . . . . . . 16
SECTION 9.3 Amendments . . . . . . . . . . . . . . . 16
SECTION 9.4 Notices . . . . . . . . . . . . . . . . . 16
SECTION 9.5 Benefit . . . . . . . . . . . . . . . . . 17
SECTION 9.6 Governing Law . . . . . . . . . . . . . . 17
SECTION 9.7 Counterparts . . . . . . . . . . . . . . 18
SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Securities Guarantee"),
dated as of ______, 199_, is executed and delivered by The
Washington Water Power Company, a Washington corporation (the
"Guarantor"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity, but solely as trustee
(the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Securities (as defined
herein) of Washington Water Power Capital II, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the "Declaration"), dated as of ______,
199_, among the trustees of the Issuer named therein, the
Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof __________ securities,
having an aggregate liquidation amount of $___________,
designated the ____% _________ Securities, Series B (the
"Securities");
WHEREAS, as incentive for the Holders to purchase the
Securities, the Guarantor desires irrevocably and unconditionally
to agree, to the extent set forth in this Securities Guarantee,
to pay to the Holders of the Securities the Guarantee Payments
(as defined herein); and
WHEREAS, the Guarantor is also executing and delivering
a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Securities Guarantee for
the benefit of the holders of the Common Securities (as defined
herein), except that if an Event of Default (as defined in the
Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments (as
defined in the Common Securities Guarantee) under the Common
Securities Guarantee are subordinated to the rights of Holders of
Securities to receive Guarantee Payments under this Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by
each Holder of Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Securities
Guarantee but not defined in the preamble above
have the respective meanings assigned to them in
this Section 1.1;
(b) terms defined in the Declaration as at the date of
execution of this Securities Guarantee have the
same meaning when used in this Securities
Guarantee unless otherwise defined in this
Securities Guarantee;
(c) a term defined anywhere in this Securities
Guarantee has the same meaning throughout;
(d) all references to "the Securities Guarantee" or
"this Securities Guarantee" are to this Securities
Guarantee as modified, supplemented or amended
from time to time;
(e) all references in this Securities Guarantee to
Articles and Sections are to Articles and Sections
of this Securities Guarantee, unless otherwise
specified;
(f) a term defined in the Trust Indenture Act has the
same meaning when used in this Securities
Guarantee, unless otherwise defined in this
Securities Guarantee or unless the context
otherwise requires; and
(g) a reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term in
---------
Rule 405 of the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Business Day" means any day other than a day on which
------------
banking institutions in the City of New York, New York are
authorized or required by any applicable law to close.
"Common Securities" means the securities representing
-----------------
common undivided beneficial interests in the assets of the
Issuer.
"Corporate Trust Office" means the office of the
----------------------
Guarantee Trustee at which the corporate trust business of the
Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this
Agreement is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890.
"Covered Person" means any Holder or beneficial owner of
--------------
Securities.
"Debentures" means the series of junior subordinated
----------
debt securities of the Guarantor designated the ____%
Junior Subordinated Deferrable Interest Debentures, Series B, due
20__ held by the Institutional Trustee of the Issuer.
"Event of Default" means a default by the Guarantor on
----------------
any of its payment or other obligations under this Securities
Guarantee.
"Guarantee Payments" means the following payments or
------------------
distributions, without duplication, with respect to the
Securities, to the extent not paid or made by the Issuer: (i) any
accrued and unpaid Distributions that are required to be paid on
such Securities to the extent the Issuer shall have funds
available therefor, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent the Issuer shall have funds
available therefor, with respect to any Securities called for
redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to
the Holders in exchange for Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Securities
to the date of payment and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Holder" means any holder, as registered on the books
------
and records of the Issuer of any Securities; provided, however, that
in determining whether the holders of the requisite percentage of
Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any
------------------
Affiliate of the Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.
"Indenture" means the Indenture dated as of ______ 1,
---------
199_, between the Guarantor (the "Debenture Issuer") and
Wilmington Trust Company, as trustee, as supplemented, pursuant
to which certain subordinated debt securities of the Debenture
Issuer are to be issued to the Property Trustee of the Issuer.
"Majority in liquidation amount of the Securities"
------------------------------------------------
means, except as provided by the Trust Indenture Act, a vote
by Holder(s) of Securities, voting separately as a class, of more
than 50% of the liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Securities.
"Officer's Certificate" means, with respect to any
---------------------
Person, a certificate signed by an Authorized Officer of such
Person. Any Officer's Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Securities Guarantee shall include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by the officer in
rendering the Officer's Certificate;
(c) a statement that such officer has made such
examination or investigation as, in such officer's opinion,
is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any
------
individual, corporation, estate, partnership, joint venture,
association, joint stock company, limited liability company,
trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Guarantee Trustee" means Wilmington Trust Company, a
-----------------
Delaware banking corporation, until a Successor Guarantee Trustee
has been appointed and has accepted such appointment pursuant to
the terms of this Securities Guarantee and thereafter means each
such Successor Guarantee Trustee.
"Responsible Officer" means, with respect to the
-------------------
Guarantee Trustee, any officer within the Corporate Trust Office
of the Guarantee Trustee, including any vice president, any
assistant vice president, any assistant secretary, the treasurer,
any assistant treasurer or other officer of the Corporate Trust
Office of the 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 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
-------------------
1939, as amended.
"Trust Securities" means the Common Securities and the
----------------
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(a) This Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be
part of this Securities Guarantee and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this
Securities Guarantee limits, qualifies or conflicts with the
duties imposed by Section 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Guarantee Trustee
with a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such date, (i) within 1
Business Day after January 1 and June 30 of each year, and (ii)
at any other time, within 30 days of receipt by the Guarantor of
a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Guarantee
Trustee; provided, however, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders
given to the Guarantee Trustee by the Guarantor. The Guarantee
Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of
the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee
--------------------------------
Within 60 days after May 15 of each year, the Guarantee
Trustee shall provide to the Holders of the Securities such
reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee
-------------------------------------
The Guarantor shall provide to the Guarantee Trustee
such documents, reports and information as required by Section
314 (if any) and the compliance certificate required by Section
314 of the Trust Indenture Act in the form, in the manner and at
the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee
such evidence of compliance with any conditions precedent, if
any, provided for in this Securities Guarantee that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of
an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of
Securities may, by vote, on behalf of the Holders of all of the
Securities, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Securities Guarantee,
but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
------------------------
(a) The Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Securities, notices
of all Events of Default actually known to a Responsible Officer
of the Guarantee Trustee, unless such defaults have been cured
before the giving of such notice; provided, however, that the
Guarantee Trustee shall be protected in withholding such notice
if and so long as a Responsible Officer of the Guarantee Trustee
in good faith determines that the withholding of such notice is
in the interests of the Holders of the Securities.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee
shall have received written notice, or a Responsible Officer of
the Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically
described in this Securities Guarantee for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee
------------------------------------------
(a) This Securities Guarantee shall be held by the
Guarantee Trustee for the benefit of the Holders of the
Securities, and the Guarantee Trustee shall not transfer this
Securities Guarantee to any Person except a Holder of Securities
exercising his or her rights pursuant to Section 5.4(b) 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 actually known to a
Responsible Officer of the Guarantee Trustee has occurred and is
continuing, the Guarantee Trustee shall enforce this Securities
Guarantee for the benefit of the Holders of the Securities.
(c) Except during the continuance of an Event of
Default,
(i) the Guarantee Trustee undertakes to perform
only such duties as are specifically set forth in this
Securities Guarantee, and no implied covenants shall be read
into this Securities Guarantee against the Guarantee
Trustee; and
(ii) in the absence of bad faith on its part, the
Guarantee Trustee may, with respect to Securities of such
series, conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this
Securities Guarantee; but in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Securities Guarantee.
(d) In case an Event of Default shall have occurred
and be continuing, the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Securities Guarantee,
and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(e) No provision of this Securities Guarantee shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) this subsection shall not be construed to limit
the effect of subsection (c) of this Section;
(ii) the Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer of the Guarantee Trustee, unless it shall be proved
that the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation amount of
the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Securities
Guarantee; and
(iv) no provision of this Securities Guarantee
shall require the Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of
any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it
under the terms of this Securities Guarantee or indemnity,
reasonably satisfactory to the Guarantee Trustee, against
such risk or liability is not reasonably assured to it.
(f) The Guarantee Trustee shall be authorized to
undertake all actions set forth in Section 317(a) of the
Trust Indenture Act.
SECTION 3.2 Certain Rights of Guarantee Trustee
-----------------------------------
(a) Subject to the provisions of Section 3.1 and to
the applicable provisions of the Trust Indenture Act:
(i) The Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or
parties.
(ii) Any request, direction or act of the
Guarantor contemplated by this Securities Guarantee shall be
sufficiently evidenced by an Officer's Certificate, or as
otherwise expressly provided herein.
(iii) Whenever, in the administration of this
Securities Guarantee the Guarantee Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officer's
Certificate.
(iv) The Guarantee Trustee may consult with
counsel of its selection, and the written advice or opinion
of such counsel with respect to legal matters shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon such advice or opinion; and
any such counsel may be counsel to the Guarantor or any of
its Affiliates and may include any of its employees.
(v) The Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Securities Guarantee at the request or direction of any
Holder pursuant to this Securities Guarantee, 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 complying
with such request or direction.
(vi) 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 any such further
inquiry or investigation, it shall (subject to applicable
legal requirements) be permitted to examine, during usual
business hours, the books, records and premises of the
Issuer or the Guarantor, personally or by agent or attorney.
(vii) The 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.
(viii) The Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof.
(ix) Any action taken by the Guarantee Trustee or
its agents hereunder shall bind the Holders of the
Securities, and the signature of the Guarantee Trustee or
its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to
inquire as to the authority of the Guarantee Trustee to so
act or as to its compliance with any of the terms and
provisions of this Securities Guarantee, both of which shall
be conclusively evidenced by the Guarantee Trustee's or its
agent's taking such action.
(b) No provision of this Securities Guarantee 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. No permissive or discretionary
power or authority available to the Guarantee Trustee shall be
construed to be a duty or obligation.
SECTION 3.3 Not Responsible for Recitals or Issuance of
-------------------------------------------
Guarantee Securities
--------------------
The recitals contained in this Securities Guarantee
shall be taken as the statements of the Guarantor, and the
Guarantee Trustee does not assume any responsibility for their
correctness. The Guarantee Trustee makes no representation as to
the validity or sufficiency of this Securities Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility
------------------------------
(a) There shall at all times be a Guarantee Trustee
which shall be:
(i) a corporation organized and doing business under
the laws of the United States, any State or Territory
thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined
capital and surplus of at least Fifty Million Dollars
($50,000,000) and subject to supervision or examination by
Federal, State, Territorial or District of Columbia
authority, or
(ii) if and to the extent permitted by the
Commission by rule, regulation or order upon application, a
corporation or other Person organized and doing business
under the laws of a foreign government, authorized under
such laws to exercise corporate trust powers, having a
combined capital and surplus of at least Fifty Million
Dollars ($50,000,000) or the Dollar equivalent of the
applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to
supervision or examination applicable to United States
institutional trustees,
and, in either case, qualified and eligible under this Article
and the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Guarantee
Trustee shall immediately resign in the manner and with the
effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Guarantee Trustee and Guarantor (as
if it were the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
(d) The Guarantee Trustee shall be deemed to be
specifically described in this Securities Guarantee for purposes
of clause (i) of the first provision contained in Section 310(b)
of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Guarantee
-------------------------------------------------
Trustee
-------
(a) Subject to Section 4.2(b), the Guarantee Trustee
may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default under the Indenture.
(b) The Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) 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 his death, removal or resignation. The
Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument in writing signed 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
4.2 within 60 days after delivery of an instrument of removal or
resignation, the Guarantee Trustee resigning or being removed, as
applicable, 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 and prescribe, appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Securities Guarantee or
removal or resignation of the Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Guarantee Trustee all
amounts accrued to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer), as and
when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders
or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of
this Securities Guarantee and of any liability to which it
applies or may apply, presentment, demand for payment, any right
to require a proceeding first against the Issuer or any other
Person before proceeding against the Guarantor, protest, notice
of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of
the Guarantor under this Securities Guarantee shall in no way be
affected or impaired by reason of the happening from time to time
of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
relating to the 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 Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Securities (other than an extension of time
for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension
of any interest payment period on the Debentures);
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Holders
pursuant to the terms of the 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
Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of
the Securities have the right to direct the time, method and
place of conducting of any proceeding for any remedy available to
the Guarantee Trustee in respect of this Securities Guarantee or
exercising any trust or power conferred upon the Guarantee
Trustee under this Securities Guarantee.
(b) If the Guarantee Trustee fails to enforce such
Securities Guarantee, any Holder of Securities may institute a
legal proceeding directly against the Guarantor to enforce the
Guarantee Trustee's rights under this Securities Guarantee,
without first instituting a legal proceeding against the Issuer,
the Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action
be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
--------------------
This Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any)
rights of the Holders of Securities against the Issuer in respect
of any amounts paid to such Holders by the Guarantor under this
Securities Guarantee; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this
Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Securities Guarantee. If
any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with
respect to the Securities, and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Securities Guarantee
notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking
-------
This Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the
Guarantor and (ii) pari passu with the Common Securities
Guarantee and any other guarantee now or hereafter entered into
by the Guarantor with respect to any preferred or capital securities
issued by any trust, partnership or other entity which is a
financing vehicle of the Guarantor, except that, where an Event of
Default (as defined in the Indenture) occurs and is continuing,
the rights of holders of the Common Securities to payment in respect
of Distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights to payment of Holders of
Securities.
SECTION 6.2 Effect of Subordination Provisions; Termination
-----------------------------------------------
Notwithstanding anything contained herein to the
contrary, other than as provided in the immediately succeeding
sentence, all the provisions of this Securities Guarantee shall
be subject to the provisions of this Article Six, so far as the
same may be applicable thereto.
Notwithstanding anything contained herein to the
contrary, the provisions of Section 6.1(i) shall be of no further
effect with respect to all or a portion of all other liabilities
of the Guarantor, and this Securities Guarantee shall no longer
be subordinated in right of payment to such other liabilities of
the Guarantor, to the extent that the Guarantor shall have
delivered to the Guarantee Trustee a notice to such effect
specifying therein such other liabilities to which this
Securities Guarantee shall no longer be subordinated and shall
have taken correlative action with respect to the Common
Securities Guarantee.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the
Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Securities Guarantee will
continue to be effective or will be reinstated, as the case may
be, if at any time any Holder of Securities must restore payment
of any sums paid under the Securities or under this Securities
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Securities Guarantee
and in a manner that such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such
Indemnified Person by this Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
SECTION 8.2 Indemnification
---------------
The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against,
or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Assignment
----------
The Guarantor may assign its obligations under this
Securities Guarantee and thereupon be released and discharged
from all obligations hereunder upon compliance with the
conditions set forth in Section 1005(a)(i)-(iv) of the Indenture.
SECTION 9.2 Successors and Assigns
----------------------
All guarantees and agreements contained in this
Securities Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and
shall inure to the benefit of the Holders of the Securities then
outstanding.
SECTION 9.3 Amendments
----------
Except with respect to any changes that do not
adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Securities Guarantee may only
be amended with the prior approval of the Holders of at least a
Majority in liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding
Securities. The provisions of Section 12.2 of the Declaration
with respect to meetings of Holders of the Securities apply to
the giving of such approval.
SECTION 9.4 Notices
-------
All notices provided for in this Securities Guarantee
shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by first class mail,
as follows:
(a) If given to the Guarantee Trustee, at the
Guarantee Trustee's mailing address set forth below (or such
other address as the Guarantee Trustee may give notice of to the
Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: (302) 651-1576
(b) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the
Guarantor may give notice of to the Holders of the Securities):
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Telecopy: (509) 482-4879
(c) If given to any Holder of Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given
when received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 9.5 Benefit
-------
This Securities Guarantee is solely for the benefit of
the Holders of the Securities and, subject to Section 3.1(a), is
not separately transferable from the Securities.
SECTION 9.6 Governing Law
-------------
THIS SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 9.7 Counterparts
------------
This Securities Guarantee may contain more than one
counterpart of the signature page and this Securities Guarantee
may be executed by the affixing of the signature of each of the
parties hereto to one of such counterpart signature pages. All
of such counterpart signature pages shall be read as though one,
and they shall have the same force and effect as though all of
the signers had signed a single signature page.
THIS SECURITIES GUARANTEE is executed as of the day and
year first above written.
THE WASHINGTON WATER POWER
COMPANY, as Guarantor
By: ________________________________________
Name: _____________
Title: _____________
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Guarantee Trustee
By: ________________________________________
Name: _____________
Title: _____________
Exhibit 4(a)-16
=========================================
SECURITIES GUARANTEE AGREEMENT
Washington Water Power Capital III
Dated as of ______, 199_
=========================================
THE WASHINGTON WATER POWER COMPANY
Reconciliation and Tie between Trust Indenture Act of 1939 and
Securities Guarantee, dated as of ________ 1, 199_*
---------------------------------------------------------------
Securities
Trust Indenture Act Section Guarantee Section(s)
--------------------------- --------------------
Section 310(a)(1) . . . . . . . . . . . . . . 4.1(a)
(a)(2) . . . . . . . . . . . . . . . . . 4.1(a)
(a)(3) . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . 2.8, 4.1(c), 4.1(d)
(c) . . . . . . . . . . . . . . . . . Not Applicable
Section 311(a) . . . . . . . . . . . . . . . 2.2(b)
(b) . . . . . . . . . . . . . . . . . 2.2(b)
(c) . . . . . . . . . . . . . . . . . Not Applicable
Section 312(a) . . . . . . . . . . . . . . . 2.2(a)
(b) . . . . . . . . . . . . . . . . . 2.2(b)
Section 313 . . . . . . . . . . . . . . . . . 2.3
Section 314(a) . . . . . . . . . . . . . . . 2.4
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . 2.5
(d) . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . 1.1 (Definition of
Officer's
Certificate
Section 315(a) . . . . . . . . . . . . . . . 3.1(c)
(b) . . . . . . . . . . . . . . . . . 2.7(a)
(c) . . . . . . . . . . . . . . . . . 3.1(d)
(d) . . . . . . . . . . . . . . . . . 3.1(e)
Section 316(a)(1) . . . . . . . . . . . . . . 2.6, 5.4(a)
(b) . . . . . . . . . . . . . . . . . 5.4(b)
(c) . . . . . . . . . . . . . . . . . Not Applicable
Section 317 . . . . . . . . . . . . . . . . . 3.1(f)
Section 318 . . . . . . . . . . . . . . . . . 2.1
_____________________________
* This Reconciliation and Tie does not constitute part of the
Securities Guarantee and shall not affect the interpretation
of any of its terms or provisions.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . 5
SECTION 2.2 Lists of Holders of Securities . . . . . . 5
SECTION 2.3 Reports by the Guarantee Trustee . . . . . 5
SECTION 2.4 Periodic Reports to Guarantee Trustee . . . 5
SECTION 2.5 Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . 6
SECTION 2.6 Events of Default; Waiver . . . . . . . . . 6
SECTION 2.7 Event of Default; Notice . . . . . . . . . 6
SECTION 2.8 Conflicting Interests . . . . . . . . . . . 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee
Trustee . . . . . . . . . . . . . . . . . . 7
SECTION 3.2 Certain Rights of Guarantee Trustee . . . . 8
SECTION 3.3 Not Responsible for Recitals or Issuance
of Guarantee Securities . . . . . . . . . 10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility . . . . . 10
SECTION 4.2 Appointment, Removal and Resignation of
Guarantee Trustee . . . . . . . . . . . . 11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . 12
SECTION 5.2 Waiver of Notice and Demand . . . . . . . 12
SECTION 5.3 Obligations Not Affected . . . . . . . . 12
SECTION 5.4 Rights of Holders . . . . . . . . . . . . 13
SECTION 5.5 Guarantee of Payment . . . . . . . . . . 13
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . 13
SECTION 5.7 Independent Obligations . . . . . . . . . 14
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking . . . . . . . . . . . . . . . . . 14
SECTION 6.2 Effect of Subordination Provisions;
Termination . . . . . . . . . . . . . . . 14
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . 15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . 15
SECTION 8.2 Indemnification . . . . . . . . . . . . . 15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Assignment . . . . . . . . . . . . . . . 16
SECTION 9.2 Successors and Assigns . . . . . . . . . 16
SECTION 9.3 Amendments . . . . . . . . . . . . . . . 16
SECTION 9.4 Notices . . . . . . . . . . . . . . . . . 16
SECTION 9.5 Benefit . . . . . . . . . . . . . . . . . 17
SECTION 9.6 Governing Law . . . . . . . . . . . . . . 17
SECTION 9.7 Counterparts . . . . . . . . . . . . . . 18
SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Securities Guarantee"),
dated as of ______, 199_, is executed and delivered by The
Washington Water Power Company, a Washington corporation (the
"Guarantor"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity, but solely as trustee
(the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Securities (as defined
herein) of Washington Water Power Capital III, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the "Declaration"), dated as of ______,
199_, among the trustees of the Issuer named therein, the
Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof __________ securities,
having an aggregate liquidation amount of $___________,
designated the ____% _________ Securities, Series C (the
"Securities");
WHEREAS, as incentive for the Holders to purchase the
Securities, the Guarantor desires irrevocably and unconditionally
to agree, to the extent set forth in this Securities Guarantee,
to pay to the Holders of the Securities the Guarantee Payments
(as defined herein); and
WHEREAS, the Guarantor is also executing and delivering
a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Securities Guarantee for
the benefit of the holders of the Common Securities (as defined
herein), except that if an Event of Default (as defined in the
Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments (as
defined in the Common Securities Guarantee) under the Common
Securities Guarantee are subordinated to the rights of Holders of
Securities to receive Guarantee Payments under this Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by
each Holder of Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Securities
Guarantee but not defined in the preamble above
have the respective meanings assigned to them in
this Section 1.1;
(b) terms defined in the Declaration as at the date of
execution of this Securities Guarantee have the
same meaning when used in this Securities
Guarantee unless otherwise defined in this
Securities Guarantee;
(c) a term defined anywhere in this Securities
Guarantee has the same meaning throughout;
(d) all references to "the Securities Guarantee" or
"this Securities Guarantee" are to this Securities
Guarantee as modified, supplemented or amended
from time to time;
(e) all references in this Securities Guarantee to
Articles and Sections are to Articles and Sections
of this Securities Guarantee, unless otherwise
specified;
(f) a term defined in the Trust Indenture Act has the
same meaning when used in this Securities
Guarantee, unless otherwise defined in this
Securities Guarantee or unless the context
otherwise requires; and
(g) a reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term in
---------
Rule 405 of the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Business Day" means any day other than a day on which
------------
banking institutions in the City of New York, New York are
authorized or required by any applicable law to close.
"Common Securities" means the securities representing
-----------------
common undivided beneficial interests in the assets of the
Issuer.
"Corporate Trust Office" means the office of the
----------------------
Guarantee Trustee at which the corporate trust business of the
Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this
Agreement is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890.
"Covered Person" means any Holder or beneficial owner of
--------------
Securities.
"Debentures" means the series of junior subordinated
----------
debt securities of the Guarantor designated the ____%
Junior Subordinated Deferrable Interest Debentures, Series C, due
20__ held by the Institutional Trustee of the Issuer.
"Event of Default" means a default by the Guarantor on
----------------
any of its payment or other obligations under this Securities
Guarantee.
"Guarantee Payments" means the following payments or
------------------
distributions, without duplication, with respect to the
Securities, to the extent not paid or made by the Issuer: (i) any
accrued and unpaid Distributions that are required to be paid on
such Securities to the extent the Issuer shall have funds
available therefor, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the
"Redemption Price") to the extent the Issuer shall have funds
available therefor, with respect to any Securities called for
redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to
the Holders in exchange for Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Securities
to the date of payment and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Holder" means any holder, as registered on the books
------
and records of the Issuer of any Securities; provided, however, that
in determining whether the holders of the requisite percentage of
Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any
------------------
Affiliate of the Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.
"Indenture" means the Indenture dated as of ______ 1,
---------
199_, between the Guarantor (the "Debenture Issuer") and
Wilmington Trust Company, as trustee, as supplemented, pursuant
to which certain subordinated debt securities of the Debenture
Issuer are to be issued to the Property Trustee of the Issuer.
"Majority in liquidation amount of the Securities"
------------------------------------------------
means, except as provided by the Trust Indenture Act, a vote
by Holder(s) of Securities, voting separately as a class, of more
than 50% of the liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Securities.
"Officer's Certificate" means, with respect to any
---------------------
Person, a certificate signed by an Authorized Officer of such
Person. Any Officer's Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Securities Guarantee shall include:
(a) a statement that the officer signing the Officer's
Certificate has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by the officer in
rendering the Officer's Certificate;
(c) a statement that such officer has made such
examination or investigation as, in such officer's opinion,
is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any
------
individual, corporation, estate, partnership, joint venture,
association, joint stock company, limited liability company,
trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Guarantee Trustee" means Wilmington Trust Company, a
-----------------
Delaware banking corporation, until a Successor Guarantee Trustee
has been appointed and has accepted such appointment pursuant to
the terms of this Securities Guarantee and thereafter means each
such Successor Guarantee Trustee.
"Responsible Officer" means, with respect to the
-------------------
Guarantee Trustee, any officer within the Corporate Trust Office
of the Guarantee Trustee, including any vice president, any
assistant vice president, any assistant secretary, the treasurer,
any assistant treasurer or other officer of the Corporate Trust
Office of the 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 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
-------------------
1939, as amended.
"Trust Securities" means the Common Securities and the
----------------
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(a) This Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be
part of this Securities Guarantee and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this
Securities Guarantee limits, qualifies or conflicts with the
duties imposed by Section 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Guarantee Trustee
with a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such date, (i) within 1
Business Day after January 1 and June 30 of each year, and (ii)
at any other time, within 30 days of receipt by the Guarantor of
a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Guarantee
Trustee; provided, however, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders
given to the Guarantee Trustee by the Guarantor. The Guarantee
Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of
the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee
--------------------------------
Within 60 days after May 15 of each year, the Guarantee
Trustee shall provide to the Holders of the Securities such
reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee
-------------------------------------
The Guarantor shall provide to the Guarantee Trustee
such documents, reports and information as required by Section
314 (if any) and the compliance certificate required by Section
314 of the Trust Indenture Act in the form, in the manner and at
the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee
such evidence of compliance with any conditions precedent, if
any, provided for in this Securities Guarantee that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of
an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of
Securities may, by vote, on behalf of the Holders of all of the
Securities, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Securities Guarantee,
but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
------------------------
(a) The Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Securities, notices
of all Events of Default actually known to a Responsible Officer
of the Guarantee Trustee, unless such defaults have been cured
before the giving of such notice; provided, however, that the
Guarantee Trustee shall be protected in withholding such notice
if and so long as a Responsible Officer of the Guarantee Trustee
in good faith determines that the withholding of such notice is
in the interests of the Holders of the Securities.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee
shall have received written notice, or a Responsible Officer of
the Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically
described in this Securities Guarantee for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee
------------------------------------------
(a) This Securities Guarantee shall be held by the
Guarantee Trustee for the benefit of the Holders of the
Securities, and the Guarantee Trustee shall not transfer this
Securities Guarantee to any Person except a Holder of Securities
exercising his or her rights pursuant to Section 5.4(b) 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 actually known to a
Responsible Officer of the Guarantee Trustee has occurred and is
continuing, the Guarantee Trustee shall enforce this Securities
Guarantee for the benefit of the Holders of the Securities.
(c) Except during the continuance of an Event of
Default,
(i) the Guarantee Trustee undertakes to perform
only such duties as are specifically set forth in this
Securities Guarantee, and no implied covenants shall be read
into this Securities Guarantee against the Guarantee
Trustee; and
(ii) in the absence of bad faith on its part, the
Guarantee Trustee may, with respect to Securities of such
series, conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this
Securities Guarantee; but in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Securities Guarantee.
(d) In case an Event of Default shall have occurred
and be continuing, the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Securities Guarantee,
and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(e) No provision of this Securities Guarantee shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) this subsection shall not be construed to limit
the effect of subsection (c) of this Section;
(ii) the Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer of the Guarantee Trustee, unless it shall be proved
that the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation amount of
the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Securities
Guarantee; and
(iv) no provision of this Securities Guarantee
shall require the Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of
any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it
under the terms of this Securities Guarantee or indemnity,
reasonably satisfactory to the Guarantee Trustee, against
such risk or liability is not reasonably assured to it.
(f) The Guarantee Trustee shall be authorized to
undertake all actions set forth in Section 317(a) of the
Trust Indenture Act.
SECTION 3.2 Certain Rights of Guarantee Trustee
-----------------------------------
(a) Subject to the provisions of Section 3.1 and to
the applicable provisions of the Trust Indenture Act:
(i) The Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or
parties.
(ii) Any request, direction or act of the
Guarantor contemplated by this Securities Guarantee shall be
sufficiently evidenced by an Officer's Certificate, or as
otherwise expressly provided herein.
(iii) Whenever, in the administration of this
Securities Guarantee the Guarantee Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officer's
Certificate.
(iv) The Guarantee Trustee may consult with
counsel of its selection, and the written advice or opinion
of such counsel with respect to legal matters shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon such advice or opinion; and
any such counsel may be counsel to the Guarantor or any of
its Affiliates and may include any of its employees.
(v) The Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Securities Guarantee at the request or direction of any
Holder pursuant to this Securities Guarantee, 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 complying
with such request or direction.
(vi) 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 any such further
inquiry or investigation, it shall (subject to applicable
legal requirements) be permitted to examine, during usual
business hours, the books, records and premises of the
Issuer or the Guarantor, personally or by agent or attorney.
(vii) The 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.
(viii) The Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof.
(ix) Any action taken by the Guarantee Trustee or
its agents hereunder shall bind the Holders of the
Securities, and the signature of the Guarantee Trustee or
its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to
inquire as to the authority of the Guarantee Trustee to so
act or as to its compliance with any of the terms and
provisions of this Securities Guarantee, both of which shall
be conclusively evidenced by the Guarantee Trustee's or its
agent's taking such action.
(b) No provision of this Securities Guarantee 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. No permissive or discretionary
power or authority available to the Guarantee Trustee shall be
construed to be a duty or obligation.
SECTION 3.3 Not Responsible for Recitals or Issuance of
-------------------------------------------
Guarantee Securities
--------------------
The recitals contained in this Securities Guarantee
shall be taken as the statements of the Guarantor, and the
Guarantee Trustee does not assume any responsibility for their
correctness. The Guarantee Trustee makes no representation as to
the validity or sufficiency of this Securities Guarantee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility
------------------------------
(a) There shall at all times be a Guarantee Trustee
which shall be:
(i) a corporation organized and doing business under
the laws of the United States, any State or Territory
thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined
capital and surplus of at least Fifty Million Dollars
($50,000,000) and subject to supervision or examination by
Federal, State, Territorial or District of Columbia
authority, or
(ii) if and to the extent permitted by the
Commission by rule, regulation or order upon application, a
corporation or other Person organized and doing business
under the laws of a foreign government, authorized under
such laws to exercise corporate trust powers, having a
combined capital and surplus of at least Fifty Million
Dollars ($50,000,000) or the Dollar equivalent of the
applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to
supervision or examination applicable to United States
institutional trustees,
and, in either case, qualified and eligible under this Article
and the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Guarantee
Trustee shall immediately resign in the manner and with the
effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Guarantee Trustee and Guarantor (as
if it were the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
(d) The Guarantee Trustee shall be deemed to be
specifically described in this Securities Guarantee for purposes
of clause (i) of the first provision contained in Section 310(b)
of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Guarantee
-------------------------------------------------
Trustee
-------
(a) Subject to Section 4.2(b), the Guarantee Trustee
may be appointed or removed without cause at any time by the
Guarantor except during an Event of Default under the Indenture.
(b) The Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) 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 his death, removal or resignation. The
Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument in writing signed 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
4.2 within 60 days after delivery of an instrument of removal or
resignation, the Guarantee Trustee resigning or being removed, as
applicable, 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 and prescribe, appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Securities Guarantee or
removal or resignation of the Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Guarantee Trustee all
amounts accrued to the date of such termination, removal or
resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer), as and
when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders
or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of
this Securities Guarantee and of any liability to which it
applies or may apply, presentment, demand for payment, any right
to require a proceeding first against the Issuer or any other
Person before proceeding against the Guarantor, protest, notice
of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of
the Guarantor under this Securities Guarantee shall in no way be
affected or impaired by reason of the happening from time to time
of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
relating to the 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 Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Securities (other than an extension of time
for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension
of any interest payment period on the Debentures);
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Holders
pursuant to the terms of the 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
Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of
the Securities have the right to direct the time, method and
place of conducting of any proceeding for any remedy available to
the Guarantee Trustee in respect of this Securities Guarantee or
exercising any trust or power conferred upon the Guarantee
Trustee under this Securities Guarantee.
(b) If the Guarantee Trustee fails to enforce such
Securities Guarantee, any Holder of Securities may institute a
legal proceeding directly against the Guarantor to enforce the
Guarantee Trustee's rights under this Securities Guarantee,
without first instituting a legal proceeding against the Issuer,
the Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action
be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
--------------------
This Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any)
rights of the Holders of Securities against the Issuer in respect
of any amounts paid to such Holders by the Guarantor under this
Securities Guarantee; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this
Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Securities Guarantee. If
any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with
respect to the Securities, and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Securities Guarantee
notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking
-------
This Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the
Guarantor and (ii) pari passu with the Common Securities
Guarantee and any other guarantee now or hereafter entered into
by the Guarantor with respect to any preferred or capital securities
issued by any trust, partnership or other entity which is a
financing vehicle of the Guarantor, except that, where an Event of
Default (as defined in the Indenture) occurs and is continuing,
the rights of holders of the Common Securities to payment in respect
of Distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights to payment of Holders of
Securities.
SECTION 6.2 Effect of Subordination Provisions; Termination
-----------------------------------------------
Notwithstanding anything contained herein to the
contrary, other than as provided in the immediately succeeding
sentence, all the provisions of this Securities Guarantee shall
be subject to the provisions of this Article Six, so far as the
same may be applicable thereto.
Notwithstanding anything contained herein to the
contrary, the provisions of Section 6.1(i) shall be of no further
effect with respect to all or a portion of all other liabilities
of the Guarantor, and this Securities Guarantee shall no longer
be subordinated in right of payment to such other liabilities of
the Guarantor, to the extent that the Guarantor shall have
delivered to the Guarantee Trustee a notice to such effect
specifying therein such other liabilities to which this
Securities Guarantee shall no longer be subordinated and shall
have taken correlative action with respect to the Common
Securities Guarantee.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the
Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Securities Guarantee will
continue to be effective or will be reinstated, as the case may
be, if at any time any Holder of Securities must restore payment
of any sums paid under the Securities or under this Securities
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Securities Guarantee
and in a manner that such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such
Indemnified Person by this Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
SECTION 8.2 Indemnification
---------------
The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against,
or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Assignment
----------
The Guarantor may assign its obligations under this
Securities Guarantee and thereupon be released and discharged
from all obligations hereunder upon compliance with the
conditions set forth in Section 1005(a)(i)-(iv) of the Indenture.
SECTION 9.2 Successors and Assigns
----------------------
All guarantees and agreements contained in this
Securities Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and
shall inure to the benefit of the Holders of the Securities then
outstanding.
SECTION 9.3 Amendments
----------
Except with respect to any changes that do not
adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Securities Guarantee may only
be amended with the prior approval of the Holders of at least a
Majority in liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding
Securities. The provisions of Section 12.2 of the Declaration
with respect to meetings of Holders of the Securities apply to
the giving of such approval.
SECTION 9.4 Notices
-------
All notices provided for in this Securities Guarantee
shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by first class mail,
as follows:
(a) If given to the Guarantee Trustee, at the
Guarantee Trustee's mailing address set forth below (or such
other address as the Guarantee Trustee may give notice of to the
Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: (302) 651-1576
(b) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the
Guarantor may give notice of to the Holders of the Securities):
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Telecopy: (509) 482-4879
(c) If given to any Holder of Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given
when received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 9.5 Benefit
-------
This Securities Guarantee is solely for the benefit of
the Holders of the Securities and, subject to Section 3.1(a), is
not separately transferable from the Securities.
SECTION 9.6 Governing Law
-------------
THIS SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.
SECTION 9.7 Counterparts
------------
This Securities Guarantee may contain more than one
counterpart of the signature page and this Securities Guarantee
may be executed by the affixing of the signature of each of the
parties hereto to one of such counterpart signature pages. All
of such counterpart signature pages shall be read as though one,
and they shall have the same force and effect as though all of
the signers had signed a single signature page.
THIS SECURITIES GUARANTEE is executed as of the day and
year first above written.
THE WASHINGTON WATER POWER
COMPANY, as Guarantor
By: ________________________________________
Name: _____________
Title: _____________
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Guarantee Trustee
By: ________________________________________
Name: _____________
Title: _____________
Exhibit 4(a)-17
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of _________, 199_, between The
Washington Water Power Company, a Washington corporation
("Washington Water Power"), and Washington Water Power Capital I,
a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common
Securities (the "Common Securities") to and receive ___% Junior
Subordinated Deferrable Interest Debentures, Series A, due 20__
(the "Subordinated Debt Securities") from Washington Water Power
and to issue its ___% _________ Securities, Series A (the
"Securities") with such powers, preferences and special rights
and restrictions as are set forth in the Amended and Restated
Declaration of Trust of the Trust dated as of _________, 199_ as
the same may be amended from time to time (the "Declaration");
WHEREAS, Washington Water Power will directly own all
of the Common Securities and will issue the Subordinated Debt
Securities;
NOW, THEREFORE, in consideration of the purchase by
each holder of the Securities, which purchase Washington Water
Power hereby agrees shall benefit Washington Water Power and
which purchase Washington Water Power acknowledges will be made
in reliance upon the execution and delivery of this Agreement,
Washington Water Power, including in its capacity as holder of
the Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by Washington Water Power.
-----------------------------------
Subject to the terms and conditions hereof, Washington Water
Power hereby irrevocably and unconditionally guarantees the full
payment, when and as due, of any and all Obligations (as
hereinafter defined) to each person or entity to whom the Trust
is now or hereafter becomes indebted or liable (the
"Beneficiaries"). As used herein, "Obligations" means any
indebtedness, expenses or liabilities of the Trust, other than
obligations of the Trust to pay to holders of any Securities the
amounts due such holders pursuant to the terms of the Securities.
This Agreement is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such
Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall
-----------------
terminate and be of no further force and effect upon the date on
which there are no Beneficiaries remaining; provided, however,
that this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any holder of
Securities or any Beneficiary must restore payment of any sums
paid under the Securities, under any Obligation, under the
Securities Guarantee Agreement dated the date hereof by
Washington Water Power and Wilmington Trust Company, as guarantee
trustee, or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. Washington Water
----------------
Power hereby waives notice of acceptance of this Agreement and of
any Obligation to which it applies or may apply, and Washington
Water Power hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 1.04. No Impairment. The obligations,
-------------
covenants, agreements and duties of Washington Water Power under
this 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 extension of time for the payment by the Trust
of all or any portion of the Obligations or for the performance
of any other obligation under, arising out of, or in connection
with, the Obligations;
(b) any failure, omission, delay or lack of diligence
on the part of the Beneficiaries to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Beneficiaries with respect to the Obligations or any action on
the part of the Trust granting indulgence or extension of any
kind; or
(c) 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 Trust or any of
the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice
to, or obtain the consent of, Washington Water Power with respect
to the happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce
-----------
this Agreement directly against Washington Water Power and
Washington Water Power waives any right or remedy to require that
any action be brought against the Trust or any other person or
entity before proceeding against Washington Water Power.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and
--------------
agreements contained in this Agreement shall bind the successors,
assigns, receivers, trustees and representatives of Washington
Water Power and shall inure to the benefit of the Beneficiaries.
Section 2.02. Amendment. So long as there remains any
---------
Beneficiary or any Securities of any series are outstanding, this
Agreement shall not be modified or amended in any manner adverse
to such Beneficiary or to the holders of the Securities.
Section 2.03. Notices. Any notice, request or other
-------
communication required or permitted to be given hereunder shall
be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or
by registered or certified mail, addressed as follows (and if so
given, shall be deemed given when mailed or upon receipt of an
answer-back, if sent by telex), to wit:
Washington Water Power Capital I
c/o The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Facsimile No.: (509) 482-4879
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Facsimile No.: (509) 482-4879
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
THIS EXPENSE AGREEMENT is executed as of the day and
year first above
written.
THE WASHINGTON WATER POWER COMPANY
By: ______________________________
Name: ____________________
Title: ____________________
WASHINGTON WATER POWER CAPITAL I
By: ______________________________
______________________________
not in his/her individual capacity,
but solely as Regular Trustee
Exhibit 4(a)-18
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of _________, 199_, between The
Washington Water Power Company, a Washington corporation
("Washington Water Power"), and Washington Water Power Capital II,
a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common
Securities (the "Common Securities") to and receive ___% Junior
Subordinated Deferrable Interest Debentures, Series B, due 20__
(the "Subordinated Debt Securities") from Washington Water Power
and to issue its ___% _________ Securities, Series B (the
"Securities") with such powers, preferences and special rights
and restrictions as are set forth in the Amended and Restated
Declaration of Trust of the Trust dated as of _________, 199_ as
the same may be amended from time to time (the "Declaration");
WHEREAS, Washington Water Power will directly own all
of the Common Securities and will issue the Subordinated Debt
Securities;
NOW, THEREFORE, in consideration of the purchase by
each holder of the Securities, which purchase Washington Water
Power hereby agrees shall benefit Washington Water Power and
which purchase Washington Water Power acknowledges will be made
in reliance upon the execution and delivery of this Agreement,
Washington Water Power, including in its capacity as holder of
the Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by Washington Water Power.
-----------------------------------
Subject to the terms and conditions hereof, Washington Water
Power hereby irrevocably and unconditionally guarantees the full
payment, when and as due, of any and all Obligations (as
hereinafter defined) to each person or entity to whom the Trust
is now or hereafter becomes indebted or liable (the
"Beneficiaries"). As used herein, "Obligations" means any
indebtedness, expenses or liabilities of the Trust, other than
obligations of the Trust to pay to holders of any Securities the
amounts due such holders pursuant to the terms of the Securities.
This Agreement is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such
Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall
-----------------
terminate and be of no further force and effect upon the date on
which there are no Beneficiaries remaining; provided, however,
that this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any holder of
Securities or any Beneficiary must restore payment of any sums
paid under the Securities, under any Obligation, under the
Securities Guarantee Agreement dated the date hereof by
Washington Water Power and Wilmington Trust Company, as guarantee
trustee, or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. Washington Water
----------------
Power hereby waives notice of acceptance of this Agreement and of
any Obligation to which it applies or may apply, and Washington
Water Power hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 1.04. No Impairment. The obligations,
-------------
covenants, agreements and duties of Washington Water Power under
this 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 extension of time for the payment by the Trust
of all or any portion of the Obligations or for the performance
of any other obligation under, arising out of, or in connection
with, the Obligations;
(b) any failure, omission, delay or lack of diligence
on the part of the Beneficiaries to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Beneficiaries with respect to the Obligations or any action on
the part of the Trust granting indulgence or extension of any
kind; or
(c) 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 Trust or any of
the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice
to, or obtain the consent of, Washington Water Power with respect
to the happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce
-----------
this Agreement directly against Washington Water Power and
Washington Water Power waives any right or remedy to require that
any action be brought against the Trust or any other person or
entity before proceeding against Washington Water Power.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and
--------------
agreements contained in this Agreement shall bind the successors,
assigns, receivers, trustees and representatives of Washington
Water Power and shall inure to the benefit of the Beneficiaries.
Section 2.02. Amendment. So long as there remains any
---------
Beneficiary or any Securities of any series are outstanding, this
Agreement shall not be modified or amended in any manner adverse
to such Beneficiary or to the holders of the Securities.
Section 2.03. Notices. Any notice, request or other
-------
communication required or permitted to be given hereunder shall
be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or
by registered or certified mail, addressed as follows (and if so
given, shall be deemed given when mailed or upon receipt of an
answer-back, if sent by telex), to wit:
Washington Water Power Capital II
c/o The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Facsimile No.: (509) 482-4879
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Facsimile No.: (509) 482-4879
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
THIS EXPENSE AGREEMENT is executed as of the day and
year first above
written.
THE WASHINGTON WATER POWER COMPANY
By: ______________________________
Name: ____________________
Title: ____________________
WASHINGTON WATER POWER CAPITAL II
By: ______________________________
______________________________
not in his/her individual capacity,
but solely as Regular Trustee
Exhibit 4(a)-19
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of _________, 199_, between The
Washington Water Power Company, a Washington corporation
("Washington Water Power"), and Washington Water Power Capital
III, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common
Securities (the "Common Securities") to and receive ___% Junior
Subordinated Deferrable Interest Debentures, Series C, due 20__
(the "Subordinated Debt Securities") from Washington Water Power
and to issue its ___% _________ Securities, Series C (the
"Securities") with such powers, preferences and special rights
and restrictions as are set forth in the Amended and Restated
Declaration of Trust of the Trust dated as of _________, 199_ as
the same may be amended from time to time (the "Declaration");
WHEREAS, Washington Water Power will directly own all
of the Common Securities and will issue the Subordinated Debt
Securities;
NOW, THEREFORE, in consideration of the purchase by
each holder of the Securities, which purchase Washington Water
Power hereby agrees shall benefit Washington Water Power and
which purchase Washington Water Power acknowledges will be made
in reliance upon the execution and delivery of this Agreement,
Washington Water Power, including in its capacity as holder of
the Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by Washington Water Power.
-----------------------------------
Subject to the terms and conditions hereof, Washington Water
Power hereby irrevocably and unconditionally guarantees the full
payment, when and as due, of any and all Obligations (as
hereinafter defined) to each person or entity to whom the Trust
is now or hereafter becomes indebted or liable (the
"Beneficiaries"). As used herein, "Obligations" means any
indebtedness, expenses or liabilities of the Trust, other than
obligations of the Trust to pay to holders of any Securities the
amounts due such holders pursuant to the terms of the Securities.
This Agreement is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such
Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall
-----------------
terminate and be of no further force and effect upon the date on
which there are no Beneficiaries remaining; provided, however,
that this Agreement shall continue to be effective or shall be
reinstated, as the case may be, if at any time any holder of
Securities or any Beneficiary must restore payment of any sums
paid under the Securities, under any Obligation, under the
Securities Guarantee Agreement dated the date hereof by
Washington Water Power and Wilmington Trust Company, as guarantee
trustee, or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. Washington Water
----------------
Power hereby waives notice of acceptance of this Agreement and of
any Obligation to which it applies or may apply, and Washington
Water Power hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 1.04. No Impairment. The obligations,
-------------
covenants, agreements and duties of Washington Water Power under
this 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 extension of time for the payment by the Trust
of all or any portion of the Obligations or for the performance
of any other obligation under, arising out of, or in connection
with, the Obligations;
(b) any failure, omission, delay or lack of diligence
on the part of the Beneficiaries to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Beneficiaries with respect to the Obligations or any action on
the part of the Trust granting indulgence or extension of any
kind; or
(c) 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 Trust or any of
the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice
to, or obtain the consent of, Washington Water Power with respect
to the happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce
-----------
this Agreement directly against Washington Water Power and
Washington Water Power waives any right or remedy to require that
any action be brought against the Trust or any other person or
entity before proceeding against Washington Water Power.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and
--------------
agreements contained in this Agreement shall bind the successors,
assigns, receivers, trustees and representatives of Washington
Water Power and shall inure to the benefit of the Beneficiaries.
Section 2.02. Amendment. So long as there remains any
---------
Beneficiary or any Securities of any series are outstanding, this
Agreement shall not be modified or amended in any manner adverse
to such Beneficiary or to the holders of the Securities.
Section 2.03. Notices. Any notice, request or other
-------
communication required or permitted to be given hereunder shall
be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by mail), telex or
by registered or certified mail, addressed as follows (and if so
given, shall be deemed given when mailed or upon receipt of an
answer-back, if sent by telex), to wit:
Washington Water Power Capital III
c/o The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Facsimile No.: (509) 482-4879
The Washington Water Power Company
1411 East Mission Avenue
Spokane, Washington 99202
Attention: Treasurer
Facsimile No.: (509) 482-4879
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
THIS EXPENSE AGREEMENT is executed as of the day and
year first above
written.
THE WASHINGTON WATER POWER COMPANY
By: ______________________________
Name: ____________________
Title: ____________________
WASHINGTON WATER POWER CAPITAL III
By: ______________________________
______________________________
not in his/her individual capacity,
but solely as Regular Trustee