Registration Nos. 333 and 333
======================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------
THE MONTANA POWER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Montana 81-0170530
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
MONTANA POWER CAPITAL I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS TRUST AGREEMENT)
Delaware To Be Applied For
(STATE OF INCORPORATION (I.R.S. EMPLOYER
OR ORGANIZATION) IDENTIFICATION NO.)
40 East Broadway
Butte, Montana 59701-9394
(406) 723-5421
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL
EXECUTIVE OFFICES)
DANIEL T. BERUBE JEROLD P. PEDERSON ELLEN M. SENECHAL
Chairman of the Board Vice President and Treasurer
and Chief Executive Officer Chief Financial and The Montana Power
The Montana Power Company Information Officer Company
40 East Broadway The Montana Power 40 East Broadway
Butte, Montana 59701-9394 Company Butte, Montana
(406) 723-5421 40 East Broadway 59701-9394
Butte, Montana 59701-9394 (406) 723-5421
(406) 723-5421
ROBERT G. SCHUUR, ESQ.
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
(212) 603-2000
(NAMES AND ADDRESSES, INCLUDING ZIP CODES,
AND TELEPHONE NUMBERS, INCLUDING AREA CODES, OF AGENTS FOR SERVICE)
--------------------------
Copy to:
M. DOUGLAS DUNN, ESQ.
ROBERT B. WILLIAMS, ESQ.
Milbank Tweed Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box.[]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box.[]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering.[]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.[]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[]
======================================================================
CALCULATION OF REGISTRATION FEE
--------------- --------------- ---------------- ------------ ----------
TITLE OF EACH PROPOSED
EACH CLASS AMOUNT PROPOSED MAXIMUM
OF SECURITIES TO BE MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED OFFERING PRICE OFFERING REGISTRATION
REGISTERED PER UNIT (1) PRICE (1) FEE
--------------- --------------- ---------------- ---------- ----------
MONTANA POWER
CAPITAL I
CUMULATIVE
QUARTERLY
INCOME
PREFERRED
SECURITIES...
--------------- --------------- ---------------- ------------ ----------
THE MONTANA
POWER COMPANY
GUARANTEE AND
OTHER OBLIGATIONS
WITH RESPECT TO
MONTANA POWER
CAPITAL I CUMULATIVE
QUARTERLY INCOME
PREFERRED SECURITIES
UNDER AN INDENTURE,
AN AMENDED AND
RESTATED TRUST
AGREEMENT AND AN
AGREEMENT AS TO
EXPENSES AND
LIABILITIES (2)......
--------------- --------------- ---------------- ------------ ----------
THE MONTANA POWER
COMPANY JUNIOR
SUBORDINATED
DEFERRABLE
INTEREST
DEBENTURES,
__% SERIES
DUE __ (2)...
--------------- --------------- -------------- -------------- ---------
TOTAL........ $65,000,000(3) 100% $65,000,000(3) $19,697
--------------- --------------- -------------- -------------- ---------
(1) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION
FEE.
(2) THE MONTANA POWER COMPANY GUARANTEE, WHEN TAKEN TOGETHER WITH THE
MONTANA POWER COMPANY'S OBLIGATIONS UNDER THE JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURES, THE INDENTURE, THE AMENDED AND
RESTATED TRUST AGREEMENT AND THE AGREEMENT AS TO EXPENSES AND
LIABILITIES, WILL PROVIDE A FULL AND UNCONDITIONAL GUARANTEE, ON A
SUBORDINATED BASIS, BY THE MONTANA POWER COMPANY OF PAYMENTS DUE ON
THE CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES. NO SEPARATE
CONSIDERATION WILL BE RECEIVED FOR THE MONTANA POWER COMPANY
GUARANTEE AND SUCH OTHER OBLIGATIONS.
(3) REPRESENTS THE PRINCIPAL AMOUNT OF THE JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURES. SUCH AMOUNT ALSO REPRESENTS THE
INITIAL PUBLIC OFFERING PRICE OF THE MONTANA POWER CAPITAL I
CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER __, 1996
PREFERRED SECURITIES
MONTANA POWER CAPITAL I
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES, SERIES A ("QUIPS"
SM)*
(LIQUIDATION PREFERENCE $25.00 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT MONTANA POWER CAPITAL I HAS FUNDS
AS SET FORTH HEREIN BY
THE MONTANA POWER COMPANY
The % Cumulative Quarterly Income Preferred Securities, Series A
("Preferred Securities") offered hereby represent undivided beneficial
interests in the assets of Montana Power Capital I ("Montana Power
Capital"), a statutory business trust formed under the laws of the State
of Delaware. The Montana Power Company, a Montana corporation
("Company"), will be the owner of all of the beneficial interests
represented by common securities of Montana Power Capital ("Common
Securities", together with the Preferred Securities herein referred to as
the "Trust Securities"). The Bank of New York is the Property Trustee of
Montana Power Capital. Montana Power Capital exists for the sole purpose
of issuing the Trust Securities and investing the proceeds thereof in
Junior Subordinated Deferrable Interest Debentures, % Series due
("Junior Subordinated Debentures"), to be issued by the Company.
The Junior Subordinated Debentures will mature on , 20 and
are redeemable prior to maturity at the option of the Company as
hereinafter described. The Preferred Securities will have a preference
with respect to cash distributions and amounts payable on liquidation,
redemption or otherwise over the Common Securities. See DESCRIPTION OF
THE PREFERRED SECURITIES "Subordination of Common Securities."
(continued on following page)
SEE RISK FACTORS, BEGINNING ON PAGE 3, FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES.
-------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY 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.
-------------------------
Initial Public Underwriting Proceeds to
Offering Price Commission(1) Company(2)(3)
-------------- -------------- ----------
Per Unit of Preferred
Securities.............. $ (2) $
Total...................... $ (2) $
(1) Montana 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.
(2) In view of the fact that the entire proceeds of the sale of the
Preferred Securities will be used to purchase the Junior
Subordinated Debentures, the Underwriting Agreement provides that
the Company will pay to the Underwriters, as compensation for
their arranging the investment therein of such proceeds, $
per unit of Preferred Securities (or $ in the aggregate).
See UNDERWRITING.
(3) Expenses of the offering, which are payable by the Company, are
estimated to be $ .
The Preferred 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 the Preferred Securities will be ready for delivery
in book-entry form only through the facilities of The Depository Trust
Company in New York, New York on or about , 199 ,
against payment therefor in immediately available funds.
--------------------
*QUIPS is a servicemark of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
---------------------
The date of this Prospectus is , 199 .
INFORMATION CONTAINED HEREIN 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 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 JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
<PAGE>
(continued from previous page)
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH 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, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
--------------------------
Holders of the Preferred Securities ("Holders") will be entitled to
receive preferential cumulative cash distributions accruing from the date
of original issuance and payable quarterly in arrears on the last day of
March, June, September and December of each year, commencing ,
199 , at the annual rate of % of the liquidation preference of $25
per Preferred Security ("Distributions"). So long as no Event of Default
under the Indenture with respect to the Junior Subordinated Debentures (a
"Debenture Event of Default") shall have occurred and be continuing, the
Company has the right to defer payments of interest on the Junior
Subordinated Debentures by extending the interest payment period thereon
at any time or from time to time for up to 20 consecutive quarters (each,
an "Extension Period"), provided that no such Extension Period may extend
beyond the maturity of the Junior Subordinated Debentures. Prior to the
end of an Extension Period, the Company may, and at the end of such
Extension Period, the Company shall, pay all interest then accrued and
unpaid (together with interest thereon at the stated rate borne thereby,
to the extent permitted by applicable law). Upon the termination of any
Extension Period and the payment of all amounts then due, including
interest on deferred interest payments, the Company may elect a new
Extension Period, subject to the requirements set forth herein.
If interest payments are so deferred, distributions on the Preferred
Securities also will be deferred, and the Company will not be permitted
to (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than dividends or distributions in common stock
of the Company) or (ii) make any payment of principal of, or interest or
premium, if any, on, or repay, repurchase or redeem, or make any sinking
fund payment with respect to, any indebtedness that is pari passu with or
junior in interest to the Junior Subordinated Debentures, or make any
guarantee payments with respect to such indebtedness. During an
Extension Period, the Preferred Securities will accumulate additional
Distributions thereon at the rate of % per annum, compounded
quarterly, and Holders of Preferred Securities will be required to accrue
interest income in the form of original issue discount ("OID") for United
States federal income tax purposes in advance of receipt of cash related
to such income. See DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
"Option to Extend Interest Payment Period" and CERTAIN UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES "Potential Extension of Interest
Payment Period and Original Issue Discount."
The payment of distributions and payments on liquidation of Montana
Power Capital or the redemption of Preferred Securities, as set forth
below, are guaranteed by the Company to the extent Montana Power Capital
has sufficient funds available to make such payments ("Guarantee"). See
DESCRIPTION OF THE GUARANTEE. If the Company fails to make interest
payments on the Junior Subordinated Debentures held by Montana Power
Capital, Montana Power Capital will have insufficient funds to pay
distributions on the Preferred Securities. The Guarantee does not cover
payment of distributions when Montana Power Capital does not have
sufficient funds to pay such distributions. In such event, a Holder of
Preferred Securities may institute a legal proceeding directly against
the Company to enforce payment of such distributions to such Holder. The
Company's obligations under the Guarantee and the Junior Subordinated
Debentures are subordinate and junior in right of payment to all Senior
Indebtedness (as defined herein) of the Company.
The Preferred Securities are subject to mandatory redemption upon
repayment of the Junior Subordinated Debentures, at stated maturity or
upon maturity by earlier acceleration, redemption or otherwise, in an
amount equal to the amount of Junior Subordinated Debentures so repaid at
a redemption price ("Redemption Price") equal to the aggregate
liquidation preference of such Preferred Securities plus accumulated and
unpaid distributions thereon to the date of redemption ("Redemption
Date"). See DESCRIPTION OF THE PREFERRED SECURITIES - "Redemption
Procedures." The Junior Subordinated Debentures are redeemable prior to
maturity at the option of the Company (i) on or after ,
in whole at any time or in part from time to time or (ii) upon the
occurrence and continuation of a Special Event (as defined herein), in
whole but not in part, in each case subject to the further conditions
described under DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
"Optional Redemption."
The Company shall have the right to terminate Montana Power Capital at
any time and cause the Junior Subordinated Debentures to be distributed
to the Holders of the Preferred Securities in liquidation of Montana
Power Capital. See DESCRIPTION OF THE PREFERRED SECURITIES
"Liquidation Distribution upon Termination."
<PAGE>
(continued from previous page)
The Junior Subordinated Debentures are subordinated and junior in
right of payment to all Senior Indebtedness of the Company. As of June
30, 1996, the Company had approximately $625,000,000 aggregate principal
amount of Senior Indebtedness outstanding. The terms of the Junior
Subordinated Debentures place no limitation on the amount of Senior
Indebtedness that may be incurred by the Company. See DESCRIPTION OF THE
JUNIOR SUBORDINATED DEBENTURES "Subordination."
In the event of the liquidation of Montana Power Capital, the Holders
of the Trust Securities will be entitled to receive either Junior
Subordinated Debentures in an aggregate principal amount of $25 for each
Preferred Security or, in certain circumstances, a liquidation preference
of $25 for each Preferred Security, plus accrued and unpaid distributions
thereon to the date of payment, subject to certain limitations. See
DESCRIPTION OF THE PREFERRED SECURITIES "Liquidation Distribution upon
Termination."
Application will be made to list the Preferred Securities on The New
York Stock Exchange ("NYSE"). If the Junior Subordinated Debentures are
distributed to the Holders of Preferred Securities upon the liquidation
of Montana Power Capital, the Company will use best efforts to list the
Junior Subordinated Debentures on the NYSE or such other stock exchange
or other organization, if any, on which the Preferred Securities are then
listed.
The Preferred Securities will be represented by global certificates
registered in the name of The Depository Trust Company ("DTC") or its
nominee. Beneficial interests in the Preferred Securities will be shown
on, and transfers thereof will be effected only through, records
maintained by participants in DTC. Except as described herein, Preferred
Securities in certificated form will not be issued in exchange for the
global certificates. See DESCRIPTION OF THE PREFERRED SECURITIES -
"Book-Entry Only Issuance".
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission ("Commission") pursuant to the Securities Exchange
Act of 1934, as amended ("1934 Act"), are incorporated herein by
reference:
1. Annual Report on Form 10-K for the year ended December 31, 1995
("1995 10-K").
2. Quarterly Reports on Form 10-Q for the quarters ended March 31
and June 30, 1996.
3. Current Reports on Form 8-K, dated January 5, January 23, April
10, April 23, and July 24, 1996.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act and prior to the termination of
the offering hereunder shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents. The documents which are incorporated by reference in this
Prospectus are sometimes hereinafter referred to as the "Incorporated
Documents."
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed
document which is deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each
person, including any beneficial owner, 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 documents referred to above which have been or
may be incorporated in this Prospectus by reference, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to Investor
Services, The Montana Power Company, 40 East Broadway, Butte, Montana
59701-9394, telephone (406) 496-5074.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the 1934
Act and in accordance therewith files reports and other information with
the Commission. Such reports and other information filed by the Company
can be inspected and copied at the public reference facilities maintained
by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following Regional Offices of the Commission: Chicago
Regional Office, Citicorp Center, 500 West Madison, Suite 1400, Chicago,
Illinois 60661; and New York Regional Office, 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
also maintains a web site (http://www.sec.gov.) that contains reports,
proxy statements and other information regarding the Company. The Common
Shares of the Company are listed on the NYSE, 20 Broad Street, New York,
New York 10005, where reports and other information concerning the
Company may be inspected.
No separate financial statements of Montana Power Capital are included
herein. Montana Power Capital will not file separate reports under the
1934 Act. The Company considers that such financial statements would not
be material to Holders of the Preferred Securities because the Company is
a reporting company under the 1934 Act and Montana Power Capital has no
independent operations, but exists for the sole purpose of issuing the
Trust Securities and holding as trust assets the Junior Subordinated
Debentures.
<PAGE>
RISK FACTORS
Prospective purchasers should carefully review the information
contained in this Prospectus and should particularly consider the
following risk factors with respect to the Preferred Securities and the
Junior Subordinated Debentures.
DEPENDENCE OF MONTANA POWER CAPITAL ON THE COMPANY FOR FUNDS;
SUBORDINATION OF JUNIOR SUBORDINATED DEBENTURES AND GUARANTEE
The ability of Montana Power Capital to pay amounts due on the
Preferred Securities is solely dependent upon the Company making payments
on the Junior Subordinated Debentures as and when required.
The Company's obligations under the Junior Subordinated Debentures and
the Guarantee are unsecured, subordinated and junior in right of payment
to Senior Indebtedness of the Company. As of June 30, 1996, Senior
Indebtedness of the Company aggregated approximately $625,000,000. There
are no terms of the Preferred Securities, the Junior Subordinated
Debentures or the Guarantee that limit the Company's ability to incur
additional indebtedness, including indebtedness that would rank senior to
the Junior Subordinated Debentures and the Guarantee. See DESCRIPTION OF
THE JUNIOR SUBORDINATED DEBENTURES "Subordination" and DESCRIPTION OF
THE GUARANTEE "Status of the Guarantee."
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; POTENTIAL
MARKET VOLATILITY DURING EXTENSION PERIOD
So long as no Debenture Event of Default shall have occurred and be
continuing, the Company has the right to defer payments of interest on
the Junior Subordinated Debentures for Extension Periods of up to 20
consecutive quarters; provided that any such Extension Period may not
extend beyond the maturity of the Junior Subordinated Debentures. Prior
to the end of an Extension Period, the Company may, and at the end of
such Extension Period, the Company shall, pay all interest then accrued
and unpaid (together with interest thereon at the stated rate borne
thereby, to the extent permitted by applicable law). Upon the
termination of any Extension Period and the payment of all amounts then
due, including interest on deferred interest payments to the extent
permitted by law, the Company may elect a new Extension Period, subject
to the requirements set forth herein. If interest payments are so
deferred, distributions on the Preferred Securities also will be
deferred, and the Company will not be permitted to (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than
dividends or distributions in common stock of the Company) or (ii) make
any payment of principal of, or interest or premium, if any, on, or
repay, repurchase or redeem, or make any sinking fund payment with
respect to, any indebtedness that is pari passu with or junior in
interest to the Junior Subordinated Debentures, or make any guarantee
payments with respect to such indebtedness. During an Extension Period,
the Preferred Securities will accumulate additional Distributions thereon
at the rate set forth on the cover page hereof, compounded quarterly.
See DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES "Option to Extend
Interest Payment Period."
Should an Extension Period occur, a Holder of Preferred Securities
will be required to accrue OID income in respect of its pro rata share of
-------
the Junior Subordinated Debentures held by Montana Power Capital for United
States federal income tax purposes. As a result, a Holder of Preferred
Securities will include such interest in gross income for United States
federal income tax purposes in advance of the receipt of cash, and will
not receive the cash related to such income from Montana Power Capital if
the Holder disposes of the Preferred Securities prior to the record date
for the payment of distributions. See CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES "Potential Extension of Interest Payment Period
and Original Issue Discount" and "Sale, Exchange and Redemption of the
Preferred Securities."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Junior Subordinated Debentures. However, should the Company elect to
exercise its right to defer payments of interest on the Junior
Subordinated Debentures, the market price of the Preferred Securities is
likely to be affected. A Holder that disposes of its Preferred
Securities during an Extension Period, therefore, might not receive the
same return on its investment as a Holder that continues to hold its
Preferred Securities. In addition, as a result of the existence of the
Company's right to defer interest payments, the market price of the
Preferred Securities (which represent preferred undivided beneficial
interests in the Junior Subordinated Debentures) may be more volatile
than other securities that do not have such rights.
RIGHTS UNDER THE GUARANTEE; LIMITED FUNDS AVAILABLE TO MONTANA POWER
CAPITAL
The Guarantee guarantees to the Holders of the Preferred Securities
the payment and not the collection of (i) any accrued and unpaid
distributions required to be paid on the Preferred Securities, but only
if and to the extent that the Property Trustee has available funds
sufficient to make such payment, (ii) the Redemption Price of Preferred
Securities called for redemption by Montana Power Capital, but only if
and to the extent that the Property Trustee has available funds
sufficient to make such payment, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of Montana Power
Capital (unless the Junior Subordinated Debentures are distributed to
Holders of the Preferred Securities) the lesser of (a) the aggregate of
the liquidation preference and all accrued and unpaid distributions on
the Preferred Securities to the date of payment and (b) the amount of
assets of Montana Power Capital remaining available for distribution to
Holders of the Preferred Securities in liquidation of Montana Power
Capital. If the Company were to default on its obligations under the
Junior Subordinated Debentures, Montana Power Capital would lack
available funds for the payment of distributions or amounts payable on
redemption of the Preferred Securities or otherwise, and in such event
Holders of the Preferred Securities would not be able to rely upon the
Guarantee for payment of such amounts. See DESCRIPTION OF THE GUARANTEE.
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Company.
SPECIAL EVENT REDEMPTION
Upon the occurrence and continuation of a Special Event (as defined
under DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES "Optional
Redemption"), the Company has the right to redeem the Junior Subordinated
Debentures, in whole but not in part, within 90 days following the
occurrence of such Special Event and thereby cause a mandatory redemption
of the Preferred Securities at the Redemption Price. See CERTAIN UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES "Possible Tax Law Changes" for
information concerning a possible Special Event.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES UPON TERMINATION;
POTENTIAL ADVERSE EFFECT UPON MARKET PRICE
The Company shall have the right to terminate Montana Power Capital at
any time and cause the Junior Subordinated Debentures to be distributed
to the Holders of Trust Securities in liquidation of Montana Power
Capital. There can be no assurance as to the market prices for the
Junior Subordinated Debentures which may be distributed in exchange for
Preferred Securities if a termination and liquidation of Montana Power
Capital were to occur. Accordingly, the Junior Subordinated Debentures
that a Holder of Preferred Securities may receive on termination and
liquidation of Montana Power Capital may trade at a discount to the price
that the investor paid to purchase the Preferred Securities offered
hereby. Because Holders of Preferred Securities may receive Junior
Subordinated Debentures upon a termination and liquidation of Montana
Power Capital, prospective purchasers of Preferred Securities are also
making an investment decision with respect to the Junior Subordinated
Debentures and should carefully review all the information regarding the
Junior Subordinated Debentures contained herein. See DESCRIPTION OF THE
JUNIOR SUBORDINATED DEBENTURES and CERTAIN UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES.
LIMITED VOTING RIGHTS
Holders of Preferred Securities generally will have limited voting
rights relating only to the modification of the Preferred Securities and
the direction of remedies upon the occurrence of an Event of Default
under the Trust Agreement (as defined herein). Holders of Preferred
Securities will not be entitled to vote to appoint, remove or replace any
Trustee, which voting rights are vested exclusively in the Holder of the
Common Securities, except upon the occurrence of certain events described
herein. The Administrative Trustees (as defined herein) and the Company
may amend the Trust Agreement (as defined herein) to ensure that Montana
Power Capital will be classified for United States federal income tax
purposes as a grantor trust without the consent of Holders, even if such
action adversely affects the interests of Holders. See "DESCRIPTION OF
THE PREFERRED SECURITIES - "Voting Rights; Actions to Enforce Rights" and
"Amendments."
NO ESTABLISHED TRADING MARKET FOR THE PREFERRED SECURITIES; TRADING
PRICE; POTENTIAL ADVERSE INCOME TAX EFFECT
Application will be made to list the Preferred Securities on the NYSE.
If approved for listing, the Preferred Securities may trade at a price
that does not fully reflect the value of accrued but unpaid interest with
respect to the underlying Junior Subordinated Debentures. Should an
Extension Period occur, a Holder that disposes of Preferred Securities
between record dates for payments of distributions thereon will be
required to include accrued but unpaid interest on the Junior
Subordinated Debentures through the date of disposition in income as
ordinary OID income and to add such amount to such Holder's adjusted tax
basis in such Holder's pro rata share of the underlying Junior
Subordinated Debentures deemed disposed of. Such Holder will recognize a
capital loss to the extent that the selling price (which may not fully
reflect the value of accrued but unpaid interest) is less than its
adjusted tax basis (which will include accrued but unpaid interest).
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 TAX CONSEQUENCES - "Sale,
Exchange and Redemption of the Preferred Securities."
<PAGE>
THE COMPANY
The Company and its subsidiaries conduct a number of diversified, but
related businesses. The Company's principal business is its Montana
electric and natural gas utility operation, which is conducted through
both its Energy Supply Division and its Energy and Communications
Services Division. This activity includes regulated utility operations
involved in the generation, purchase, transmission, and distribution of
electricity, and the production, purchase, transportation and
distribution of natural gas. The Company's non-regulated businesses are
involved principally in the mining and sale of coal, exploration for, and
the development, production, processing and sale of oil and natural gas;
the sale of telecommunication equipment and services; and independent
power activities that include the management of long-term power sales,
and the development of and investment in nonutility power projects and
other energy-related businesses. The Company was incorporated in 1961
under the laws of the State of Montana, where its principal business is
conducted, as the successor to a New Jersey corporation incorporated in
1912. The principal executive offices of the Company are located at 40
East Broadway, Butte, Montana 59701-9394. Its telephone number is (406)
723-5421.
MONTANA POWER CAPITAL
Montana Power Capital is a statutory business trust created under
Delaware law pursuant to a trust agreement among the Company, as
depositor, the Property Trustee, the Delaware Trustee and an
Administrative Trustee (each as defined herein) and a certificate of
trust with the Delaware Secretary of State on October 15, 1996. Such
trust agreement will be amended and restated in its entirety (as so
amended and restated, the "Trust Agreement") substantially in the form
filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. The Trust Agreement will be qualified as an
indenture under the Trust Indenture Act of 1939, as amended ("Trust
Indenture Act"). Montana Power Capital's business and affairs will be
conducted by The Bank of New York, as Property Trustee, The Bank of New
York (Delaware), as Delaware Trustee, and three individual Administrative
Trustees who are employees or officers or affiliated with the Company.
Montana Power Capital exists for the exclusive purposes of (i) issuing
Trust Securities representing undivided beneficial interests in its trust
assets and investing the proceeds thereof in the Junior Subordinated
Debentures, (ii) receiving payments to be made with respect to the Junior
Subordinated Debentures and disbursing such payments in accordance with
the terms of the Trust Agreement and (iii) engaging in only those other
activities necessary, convenient or incidental thereto. Accordingly, the
Junior Subordinated Debentures will be the sole assets of Montana Power
Capital, and payments under the Junior Subordinated Debentures and the
Expense Agreement (as hereinafter defined) will be the sole revenue of
Montana Power Capital. The Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Preferred Securities,
except that upon the occurrence and continuance of an Event of Default
under the Trust Agreement resulting from a Debenture Event of Default (as
defined herein), the rights of the Company as the Holder 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 Preferred Securities. The Company will acquire
Common Securities in an amount equal to at least 3% of the total capital
of Montana Power Capital and will own all of the issued and outstanding
Common Securities. Montana Power Capital has a term of approximately ___
years, but may terminate earlier as provided in the Trust Agreement.
Montana Power Capital's business and affairs will be conducted by the
Administrative Trustees. The office of the Delaware Trustee in the State
of Delaware is White Clay Center, Route 273, Newark, Delaware 19711. The
principal place of business of Montana Power Capital is c/o The Montana
Power Company, 40 East Broadway, Butte, Montana 59701-9394.
<PAGE>
SELECTED FINANCIAL INFORMATION
(THOUSANDS OF DOLLARS, EXCEPT RATIOS AND PERCENTAGES)
The following financial information, which is presented herein solely
to furnish limited introductory information, is qualified in its entirety
by, and should be considered in conjunction with, the other information
presented in or incorporated by reference into this Prospectus, including
the Incorporated Documents. In the opinion of the Company, all
adjustments (constituting only normal recurring accruals) necessary for a
fair statement of the consolidated results of operations of The Montana
Power Company for the twelve months ended June 30, 1996, have been made.
Twelve Months Ended
-------------------------------------------
December 31,
--------------------------------------------
1991 1992 1993
---------- -------------- --------
Consolidated Income
statement data:
Operating Revenues $889,254 $943,872 $1,024,285
Income from Operations 198,811 193,670 197,497
Interest Expense and
Other Income 42,703 40,966 36,166
Net Income Available
for Common Stock 101,925 103,275 102,858
Ratio of Earnings to
Fixed Charges 2.70 2.74 2.86
Twelve Months Ended
---------------------------------
December 31, June 30,
---------------------------------- 1996
1994 1995 (Unaudited)
---------- -------------- --------
Consolidated Income
statement data:
Operating Revenues...... $1,005,970 $953,539 $949,772
Income from Operations 201,103 111,352 138,957
Interest Expense and
Other Income 32,285 32,841 35,516
Net Income Available
for Common Stock 106,365 49,710 62,408
Ratio of Earnings to
Fixed Charges 3.05 1.96(1) 2.22(1)
_______________________
(1) Excluding the effects of the implementation of SFAS No. 21 and
the writedown of a coal mining investment, effective October 1,
1995, the ratio of earnings to Fixed Charges would have been
2.84x at December 31, 1995 and 3.09x at June 30, 1996.
CAPITALIZATION
(Dollars in Thousands)
Outstanding
at
June 30, 1996 Adjusted(1)
------------- -------------
Amount Amount Percent
-------- ------- --------
Consolidated Capitalization: $ $
Long-term Debt (including
portion due within
one year) . . . . . . . 624,763 624,763 36.7%
Company Obligated
Mandatorily Redeemable
Securities of Subsidiary
Trust holding Parent
Junior Subordinated
Debentures(2) . . . . . . . . 65,000 3.8%
Preferred Stock . . . . . . 101,416 57,654 3.4%
954,658 954,658 56.1%
Common Equity . . . . . . . --------- ---------- -------
$1,680,837 $1,702,075 100.0%
Total Capitalization . . .=========== ========== =======
____________________________
(1) To give effect to this transaction, the redemption of all of the
$2.15 Preferred Stock Series and 139,200 shares of the $6.875
Preferred Stock Series.
(2) The sole assets of such trust consist of junior subordinated
debentures of the Company in principal amounts, and having other
payment terms, corresponding to the securities issued by such trust.
<PAGE>
USE OF PROCEEDS
The proceeds to be received by Montana Power Capital from the sale of
the Preferred Securities will be used to purchase Junior Subordinated
Debentures of the Company. Of the proceeds of such purchase, $30,000,000
will be used to redeem all of the outstanding shares of the Company's
Preferred Stock $2.15 Series. The balance will be applied by the Company
for general corporate purposes.
DESCRIPTION OF THE PREFERRED SECURITIES
The following summaries of certain provisions of the Preferred
Securities and the Trust Agreement do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, the
provisions of the Trust Agreement, including the definitions therein of
certain terms, and the Trust Indenture Act. Wherever particular sections
or defined terms of the Trust Agreement are referred to, such sections or
defined terms are incorporated herein by reference. A form of the Trust
Agreement has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.
GENERAL
The Trust Securities represent undivided beneficial interests in the
assets of Montana Power Capital. The Trust Securities will have a
liquidation preference of $25 per unit. Approximately 97% of the total
liquidation preference amount will be represented by Preferred Securities
and the remainder by Common Securities. All of the Common Securities
will be owned by the Company. The Common Securities rank pari passu, and
payments will be made thereon pro rata, with the Preferred Securities
based on the liquidation preference of the Trust Securities, except that,
if an Event of Default under the Trust Agreement resulting from a
Debenture Event of Default shall have occurred and be continuing, the
Preferred Securities shall have a preference over the Common Securities.
(Section 4.03). The Junior Subordinated Debentures will be held by the
Property Trustee in trust for the benefit of the Holders of the Trust
Securities. (Section 2.07). The Company has agreed in an Agreement as to
Expenses and Liabilities (the "Expense Agreement") to provide funds to
Montana Power Capital as needed to pay obligations of Montana Power
Capital to parties other than the holders of the Trust Securities. The
Junior Subordinated Debentures and the Guarantee, together with the
obligations of the Company with respect to the Preferred Securities under
the Indenture, the Trust Agreement and the Expense Agreement, constitute
a full and unconditional guarantee by the Company of payments on the
Preferred Securities in accordance with their terms. See DESCRIPTION OF
THE GUARANTEE.
DISTRIBUTIONS
The distributions payable on the Preferred Securities will be fixed at
the annual rate set forth on the cover page of this Prospectus of the
stated liquidation preference amount of $25 per Preferred Security. The
term "distributions" as used herein includes interest payable on overdue
distributions, 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 and for any period shorter than a full month, on the
basis of the actual number of days elapsed in such period.
(Section 4.01(b)).
Distributions on the Preferred Securities will be cumulative, will
accrue from, and including, the date of initial issuance thereof, and
will be payable quarterly in arrears, on March 31, June 30, September 30
and December 31 of each year, commencing , 199 , except as
otherwise described below. Such distributions will accrue to, and
including, the first distribution payment date, and for each subsequent
distribution payment date will accrue from, and excluding, the last
distribution payment date through which distributions have been paid or
duly provided for. In the event that any date on which distributions are
otherwise payable on the Preferred Securities is not a Business Day,
payment of the distribution 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, payment of such distribution shall be made on
the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which distributions are
otherwise payable in accordance with the foregoing, a "Distribution
payment date"). (Section 4.01(a) and (b)). A Business Day is used
herein to mean any day, other than a Saturday or a Sunday, which is not a
day on which banking institutions in The City of New York are authorized
or required by law or executive order to remain closed and a day on which
the principal corporate trust office of the Property Trustee or the
Debenture Trustee (as defined herein) is closed for business. (Section
1.01).
The income of Montana Power Capital available for distribution to the
Holders of the Preferred Securities will be limited to payments received
on the Junior Subordinated Debentures. See DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES. If the Company does not make interest payments
on the Junior Subordinated Debentures, the Property Trustee will not have
funds available to pay distributions on the Preferred Securities. The
payment of distributions (if and to the extent Montana Power Capital has
sufficient funds available for the payment of such distributions) is
guaranteed by the Company as described under DESCRIPTION OF THE
GUARANTEE.
Distributions on the Preferred Securities will be payable to the
Holders thereof as they appear on the register of Montana Power Capital
on the relevant record dates, each of which, so long as the Preferred
Securities are held in book-entry only form, will be one Business Day
prior to the related distribution payment date. Subject to any
applicable laws and regulations and the provisions of the Trust
Agreement, each such payment will be made as described under "Book-Entry
Only Issuance." In the event the Preferred Securities are no longer held
in book-entry only form, the record date shall be 15 days prior to the
related distribution payment date. (Section 4.01(d)).
So long as no Debenture Event of Default with respect to the Junior
Subordinated Debentures shall have occurred and be continuing, the
Company has the right to defer payments of interest on the Junior
Subordinated Debentures for Extension Periods of up to 20 consecutive
quarters; provided that any such Extension Period may not extend beyond
the maturity of the Junior Subordinated Debentures. Prior to the end of
an Extension Period, the Company may, and at the end of such Extension
Period, the Company shall, pay all interest then accrued and unpaid
(together with interest thereon at the stated rate borne thereby, to the
extent permitted by applicable law). Upon the termination of any
Extension Period and the payment of all amounts then due, including
interest on deferred interest payments, the Company may elect a new
Extension Period, subject to the requirements set forth herein. If
interest payments are so deferred, distributions on the Preferred
Securities also will be deferred, and the Company will not be permitted
to (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than dividends or distributions in common stock
of the Company) or (ii) make any payment of principal of, or interest or
premium, if any, on, or repay, repurchase or redeem, or make any sinking
fund payment with respect to, any indebtedness that is pari passu with or
junior in interest to the Junior Subordinated Debentures or make any
guarantee payments with respect to such indebtedness. During an
Extension Period, the Preferred Securities will accumulate additional
Distributions thereon at the annual rate stated on the cover page hereof,
compounded quarterly. See DESCRIPTION OF THE JUNIOR SUBORDINATED
DEBENTURES "Option to Extend Interest Payment Period."
REDEMPTION
Upon the repayment of the Junior Subordinated Debentures, whether at
stated maturity or upon maturity by earlier acceleration, redemption or
otherwise, the proceeds from such repayment shall be applied by the
Property Trustee to redeem a Like Amount (as defined below) of Trust
Securities at the Redemption Price. (Section 4.02). See DESCRIPTION OF
THE JUNIOR SUBORDINATED DEBENTURES - "Optional Redemption."
"Like Amount" means (i) with respect to a redemption of Trust
Securities, Trust Securities having an aggregate liquidation value equal
to the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed and (ii) with respect to a distribution of
Junior Subordinated Debentures to Holders of Trust Securities, Junior
Subordinated Debentures having a principal amount equal to the aggregate
liquidation value of the Trust Securities with respect to which such
Junior Subordinated Debentures are distributed.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption of Junior Subordinated Debentures.
Redemptions of the Preferred Securities shall be made and the Redemption
Price shall be deemed payable on each Redemption Date only if Montana
Power Capital has funds available for the payment of such Redemption
Price. (Section 4.02(d)). See also "Subordination of Common
Securities."
Notice of redemption shall be given not less than 30 nor more than 60
days prior to the Redemption Date and shall specify, among other things,
whether (i) less than all of the outstanding Trust Securities are to be
redeemed and (ii) such redemption is conditional upon receipt of funds by
the Property Trustee on the Redemption Date. (Section 4.02(b) and (c)).
If notice of redemption shall have been given and funds deposited as
required, then on the Redemption Date, all rights of Holders of Preferred
Securities so called for redemption will cease, except the right to
receive the Redemption Price, but without interest thereon, and such
Preferred Securities will cease to be outstanding. In the event that any
date fixed for redemption of Preferred Securities is not a Business Day,
then payment of the amount payable on such date will be made on the next
succeeding day which 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. In the event that payment of the
Redemption Price in respect of Preferred Securities called for redemption
is not paid either by Montana Power Capital or by the Company pursuant to
the Guarantee, Distributions on such Preferred Securities will continue
to accrue at the then applicable rate, from the original redemption date
to the date of payment. (Section 4.02(e)).
If less than all the Trust Securities are to be redeemed on a
Redemption Date, the aggregate liquidation preference of such securities
to be redeemed shall be allocated on a pro rata basis to the Common
Securities and the Preferred Securities. The particular Preferred
Securities to be redeemed shall be selected not more than 60 days prior
to the Redemption Date by the Property Trustee from the outstanding
Preferred Securities not previously called for redemption, by such method
as the Property Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of less than all of the
Preferred Securities represented by any certificate therefor. The
Property Trustee shall promptly notify the transfer agent in writing of
the Preferred Securities selected for redemption and, in the case of any
Preferred Securities certificate selected for partial redemption, the
number of Preferred Securities to be redeemed. (Section 4.02(f)).
SUBORDINATION OF COMMON SECURITIES
If on any Distribution payment date or Redemption Date an Event of
Default under the Trust Agreement resulting from a Debenture Event of
Default shall have occurred and be continuing, no payment of any
Distribution on, or Redemption Price of, any Common Security shall be
made. (Section 4.03(a)).
In the case of any Event of Default under the Trust Agreement
resulting from a Debenture Event of Default, the Holder of Common
Securities will be deemed to have waived any such Event of Default until
the effect of such Event of Default with respect to the Preferred
Securities has been cured, waived or otherwise eliminated. Until any
such Event of Default with respect to the Preferred Securities has been
so cured, waived or otherwise eliminated, the Property Trustee shall act
solely on behalf of the Holders of the Preferred Securities, and only
Holders of Preferred Securities will have the right to direct the
Property Trustee. (Section 4.03(b)).
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to the Trust Agreement, Montana Power Capital shall terminate
and shall be liquidated by the Property Trustee on December 31, , or,
if earlier, on the first to occur of (i) certain events of bankruptcy,
dissolution or liquidation of the Company; (ii) the redemption of all of
the Preferred Securities; (iii) the receipt by the Property Trustee of a
written direction from the Company to terminate Montana Power Capital
(which direction may be given at any time and is wholly within the
discretion of the Company); and (iv) termination of the trust by court
order. (Sections 9.01 and 9.02).
If an early termination occurs as described in clause (i), (iii) or
(iv) above, Montana Power Capital shall be liquidated by the Property
Trustee by promptly distributing, after satisfaction of all amounts due
to creditors of Montana Power Capital as provided by applicable law, to
each Holder of Trust Securities a Like Amount of Junior Subordinated
Debentures, unless such distribution is determined by the Property
Trustee not to be practical, in which event such Holders will be entitled
to receive, out of the assets of Montana Power Capital available for
distribution to Holders, an amount equal to the aggregate liquidation
preference of the Trust Securities plus accrued and unpaid distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in
part because Montana Power Capital has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts
payable by Montana Power Capital on the Trust Securities shall be paid on
a pro rata basis; provided, however, that if an Event of Default has
occurred and is continuing under the Trust Agreement, the Preferred
Securities shall have a preference over the Common Securities. (Sections
9.04(a) and 9.04(d)).
On the date fixed for the distribution of Junior Subordinated
Debentures upon termination of Montana Power Capital (i) the Preferred
Securities and the Common Securities will no longer be deemed to be
outstanding; (ii) all rights of the Holders thereof will cease, except
the right to receive Junior Subordinated Debentures upon surrender of the
certificates representing their Trust Securities; and (iii) the Company
will use best efforts to list the Junior Subordinated Debentures on the
NYSE or on such other exchange or organization on which the Preferred
Securities shall then be listed. (Section 9.04(c)).
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an Event of Default under
the Trust Agreement (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see DESCRIPTION
OF THE JUNIOR SUBORDINATED DEBENTURES "Events of Default"); or
(ii) default by Montana Power Capital in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or
(iii) default by Montana Power Capital in the payment of any
Redemption Price of any Trust Security when it becomes due and
payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Trustees in the Trust Agreement
(other than a covenant or warranty a default in the performance of
which or the breach of which is specifically dealt with in clause (ii)
or (iii) above), and continuation of such default or breach for a
period of 60 days after there shall have been given, by registered or
certified mail, to the Property Trustee by the Holders of Preferred
Securities having at least 33% of the aggregate liquidation preference
amount of the outstanding Preferred Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a Notice of Default thereunder; or
(v) the occurrence of certain events of bankruptcy or insolvency
with respect to the Trust. (Section 1.01)
Within five Business Days after the occurrence of any Event of Default
known to the Property Trustee, the Property Trustee shall transmit to the
Holders of Trust Securities notice of such Event of Default, unless such
Event of Default shall have been cured or waived. (Section 8.02).
If, in the event of a Debenture Event of Default, the Debenture
Trustee fails, or the holders of not less than 33% in principal amount of
the outstanding Junior Subordinated Debentures fail, to declare the
principal of all of the Junior Subordinated Debentures to be immediately
due and payable, the Holders of at least 33% in aggregate liquidation
preference of the Preferred Securities then outstanding shall have such
right.
VOTING RIGHTS; ACTIONS TO ENFORCE RIGHTS
Holders of Trust Securities shall be entitled to one vote for each $25
in liquidation preference represented by their Trust Securities in
respect of any matter as to which such Holders of Trust Securities are
entitled to vote. Except as described below and under "Amendments," and
under DESCRIPTION OF THE GUARANTEE "Amendments" and as otherwise
required by law, the Holders of the Preferred Securities will have no
voting rights. (Section 6.01).
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Property Trustee shall not (i) direct the time, method and
place of conducting any proceeding for, or taking any other action
relating to, any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Debenture Trustee with respect to the
Junior Subordinated Debentures, (ii) waive any past default which is
waivable under Section 813 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior
Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Junior
Subordinated Debentures, where such consent shall be required, without,
in each case, obtaining the prior approval of the Holders of Preferred
Securities of a majority of the aggregate liquidation preference amount
of the outstanding Preferred Securities; provided, however, that where a
consent under the Indenture would require the consent of each holder of
Junior Subordinated Debentures affected thereby, no such consent shall be
given by the Property Trustee without the prior consent of each Holder of
Preferred Securities. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Preferred Securities,
except pursuant to a subsequent vote of the Preferred Securities. The
Property Trustee shall notify all Holders of the Preferred Securities of
any notice of default received from the Debenture Trustee. In addition
to obtaining the foregoing approvals of the Holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Property
Trustee shall receive an opinion of counsel experienced in such matters
to the effect that the contemplated action will not cause Montana Power
Capital to fail to be classified as a "grantor trust" for United States
federal income tax purposes on account of such action.
(Section 6.01(c)).
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of
the Preferred Securities that are owned by the Company, the Property
Trustee or any affiliate of the Company or the Property Trustee, shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
If the Property Trustee fails to enforce its rights under the Junior
Subordinated Debentures or the Trust Agreement, a Holder of Preferred
Securities may institute, to the fullest extent permitted by law, a legal
proceeding directly against the Company to enforce the Property Trustee's
rights under the Junior Subordinated Debentures or the Trust Agreement
without first instituting any legal proceeding against the Property
Trustee or any other person. A Holder of Preferred Securities also may
institute a proceeding for enforcement of payment to such Holder directly
of principal of or interest on the Junior Subordinated Debentures having
a principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such Holder on or after the due dates specified
in the Junior Subordinated Debentures. (Section 6.10).
AMENDMENTS
The Trust Agreement may be amended from time to time by a majority of
the Administrative Trustees and the Company, without the consent of any
Holders of Trust Securities, (i) to cure any ambiguity, correct or
supplement any provision herein or therein which may be inconsistent with
any other provision therein, or to make any other provisions with respect
to matters or questions arising under the Trust Agreement, which shall
not be inconsistent with the other provisions of the Trust Agreement;
provided that such action shall not adversely affect in any material
respect the interests of any Holder of Trust Securities or (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as shall be necessary to ensure that Montana Power Capital will
not be classified for United States federal income tax purposes other
than as a "grantor trust" at any time that any Trust Securities are
outstanding or to ensure Montana Power Capital's exemption from the
status of an "investment company" under the Investment Company Act of
1940, as amended (the "Investment Company Act") or (iii) to effect the
acceptance of a successor Trustee's appointment. (Section 10.03(a)).
Except as provided below, any provision of the Trust Agreement may be
amended by a majority of the Administrative Trustees and the Company with
(i) the consent of a majority in liquidation preference amount of the
Trust Securities then outstanding and (ii) receipt by the Trustees of an
opinion of counsel to the effect that such amendment or the exercise of
any power granted to the Trustees in accordance with such amendment will
not affect Montana Power Capital's status as a grantor trust for United
States federal income tax purposes or affect Montana Power Capital's
exemption from status of an "investment company" under the Investment
Company Act. (Section 10.03(b)).
Without the consent of each affected Holder of Trust Securities, the
Trust Agreement may not be amended to (i) reduce the liquidation
preference of any Trust Security, (ii) change the amount or timing of any
distribution with respect to the Trust Securities or otherwise adversely
affect the amount of any distribution required to be made in respect of
the Trust Securities as of a specified date, (iii) restrict the right of
a Holder of Trust Securities to institute suit for the enforcement of any
such payment on or after such date, or (iv) change the consent
requirement for any such actions. (Section 10.03(c)).
TRUSTEES
Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by act of the Holder of the Common
Securities. If an Event of Default has occurred and is continuing, any
Trustee may be removed at such time by act of the Holders of a majority
of the Preferred Securities. No resignation or removal of any Trustee
and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor Trustee in accordance with the
provisions of the Trust Agreement. (Section 8.10).
The Property Trustee, other than during the occurrence and continuance
of an Event of Default, undertakes to perform only such duties as are
specifically set forth in the Trust Agreement and, after such Event of
Default, must exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Trust Agreement at the
request of any Holder of Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. If no Event of Default has occurred and is
continuing and the Property Trustee is required to decide between
alternative causes of action, construe an ambiguous provision in the
Trust Agreement or is unsure of the application of any provision of the
Trust Agreement, and the matter is not one on which Holders of Preferred
Securities are entitled under the Trust Agreement to vote, then the
Property Trustee shall take such action as is directed by the Company and
if not so directed, shall take such action as it deems advisable and in
the best interests of the Holders of the Preferred Securities and the
Common Securities and will have no liability except for its own bad
faith, negligence or willful misconduct.
The Delaware Trustee will act as the resident trustee in the State of
Delaware and will have no other significant duties. The Property Trustee
will hold the Junior Subordinated Debentures on behalf of Montana Power
Capital and will maintain a payment account with respect to the Trust
Securities, and will also act as trustee under the Trust Agreement for
the purposes of the Trust Indenture Act. See "Events of Default;
Notice." The Administrative Trustees will administer the day to day
operations of Montana Power Capital.
The Administrative Trustees are authorized and directed to conduct the
affairs of Montana Power Capital and to operate Montana Power Capital so
that Montana Power Capital will not be deemed to be an "investment
company" required to be registered under the Investment Company Act or
taxed as a corporation for United States federal income tax purposes and
so that the Junior Subordinated Debentures will be treated as
indebtedness of the Company for United States federal income tax
purposes. In this connection, the Administrative Trustees are authorized
to take any action, not inconsistent with applicable law, the certificate
of trust or the Trust Agreement, that the Administrative Trustees
determine in their discretion to be necessary or desirable for such
purposes, as long as such action does not materially adversely affect the
interests of the Holders of the Preferred Securities.
FORM, EXCHANGE, AND TRANSFER
The following provisions shall apply to the Preferred Securities only
in the event that the Preferred Securities are no longer held in book-
entry only form.
The Preferred Securities will be issuable only in fully registered
form in units having a liquidation preference amount of $25 and any
integral multiple thereof. At the option of the Holder, subject to the
terms of the Trust Agreement, Preferred Securities will be exchangeable
for other Preferred Securities of the same series, of any authorized
denomination and of like tenor and aggregate liquidation preference.
Subject to the terms of the Trust Agreement, Preferred Securities may be
presented for exchange as provided above or for registration of transfer
(duly endorsed or accompanied by a duly executed instrument of transfer)
at the office of The Bank of New York, as transfer agent, or at the
office of any transfer agent designated by the Company for such purpose.
The Company may designate itself the Transfer Agent and Registrar. No
service charge will be made for any registration of transfer or exchange
of Preferred Securities, but the Transfer Agent may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Montana Power Capital will not be required to (i) issue, register the
transfer of, or exchange any Preferred Securities during a period
beginning at the opening of business 15 calendar days before the day of
mailing of a notice of redemption of any Preferred Securities called for
redemption and ending at the close of business on the day of such mailing
or (ii) register the transfer of or exchange any Preferred Securities so
selected for redemption, in whole or in part, except the unredeemed
portion of any such Preferred Securities being redeemed in part.
BOOK-ENTRY ONLY ISSUANCE
The Depository Trust Company ("DTC") will act as securities depositary
for the Preferred Securities. The Preferred Securities initially will be
issued only as fully-registered securities registered in the name of Cede
& Co. (DTC's nominee). One or more fully-registered global Preferred
Securities certificates, representing the total aggregate number of
Preferred 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 1934 Act. 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
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants").
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 direct or indirect custodial
relationship with a Direct Participant either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Direct
Participants and Indirect Participants (together, "Participants") are on
file with the Commission.
Purchases of Preferred Securities within the DTC system must be made
by or through Direct Participants, which will receive a credit for the
Preferred Securities on DTC's records. The ownership interest of each
actual purchaser of each Preferred Security (a "Beneficial Owner") is in
turn to be recorded on the Participants' records. Beneficial Owners will
not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their
holdings, from the Participants through which the Beneficial Owners
purchased Preferred Securities. Transfers of ownership interests in the
Preferred 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 Preferred Securities, except in the event that use of the book-entry
system for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities
deposited by Direct Participants with DTC are registered in the name of
DTC's nominee, Cede & Co. The deposit of Preferred 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 Preferred Securities. DTC's records reflect only the
identity of the Direct Participants to whose accounts such Preferred
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
Participants to Beneficial Owners will be governed by arrangements among
them, subject to any statutory or regulatory requirements that may be in
effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of
the Preferred Securities are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in
such issue to be redeemed.
Although voting with respect to the Preferred Securities is limited,
in those cases where a vote is required, neither DTC nor Cede & Co. will
itself consent or vote with respect to Preferred Securities. Under its
usual procedures, DTC would mail an Omnibus Proxy to Montana Power
Capital as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co. consenting or voting rights to those Direct
Participants to whose accounts the Preferred Securities are credited on
the record date (identified in a listing attached to the Omnibus Proxy).
The Company and Montana Power Capital believe that the arrangements among
DTC, Direct and Indirect Participants, and Beneficial Owners will enable
the Beneficial Owners to exercise rights equivalent in substance to the
rights that can be directly exercised by a holder of a beneficial
interest in Montana Power Capital.
Distribution payments on the Preferred 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
payments 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 account of customers in
bearer form or registered in "street name," and such payments will be the
responsibility of such Participant and not of DTC, Montana Power Capital
or the Company, subject to any statutory or regulatory requirements to
the contrary that may be in effect from time to time. Payment of
distributions to DTC is the responsibility of Montana Power Capital,
disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners is the responsibility of Participants.
Except as provided herein, a Beneficial Owner will not be entitled to
receive physical delivery of Preferred Securities. Accordingly, each
Beneficial Owner must rely on the procedures of DTC to exercise any
rights under the Preferred Securities.
DTC may discontinue providing its services as securities depositary
with respect to the Preferred Securities at any time by giving reasonable
notice to the Property Trustee and to Montana Power Capital. Under such
circumstances, in the event that a successor securities depositary should
not be obtained, Preferred Securities certificates would be required to
be printed and delivered. Additionally, the Administrative Trustees
(with the consent of the Company) may decide to discontinue use of the
system of book-entry transfers through DTC (or any successor depositary)
with respect to the Preferred Securities. After a Debenture Event of
Default, the holders of a majority in liquidation preference of the
Preferred Securities may determine to discontinue the system of book-
entry transfers through DTC. In that event, certificates for the
Preferred Securities would be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Company and Montana Power
Capital believe to be reliable, but neither the Company nor Montana Power
Capital takes responsibility for the accuracy thereof.
CONCERNING THE PROPERTY TRUSTEE
The Property Trustee is The Bank of New York. In addition to acting
as Property Trustee, The Bank of New York acts as trustee under the
Company's Mortgage and Deed of Trust with respect to substantially all of
the properties of the Company, which secures the Company's first mortgage
bonds. The Bank of New York also acts as the Guarantee Trustee under the
Guarantee and the Debenture Trustee under the Indenture. The Bank of New
York (Delaware) acts as the Delaware Trustee under the Trust Agreement.
The Company may maintain deposit accounts and conduct other banking
transactions with The Bank of New York in the ordinary course of its
business.
DESCRIPTION OF THE GUARANTEE
The following summary of certain provisions of the Guarantee 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 Guarantee,
including the definitions therein of certain terms, and the Trust
Indenture Act. Whenever particular sections or defined terms of the
Guarantee are referred to, such sections or defined terms are
incorporated herein by reference. The Guarantee has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a
part.
THE GUARANTEE
The Company will irrevocably and unconditionally agree, to the extent
set forth herein, to pay the Guarantee Payments (as defined herein) in
full to the Holders of the Preferred Securities (except to the extent
paid by or on behalf of Montana Power Capital), as and when due,
regardless of any defense, right of set-off or counterclaim that Montana
Power Capital may have or assert. The following payments with respect to
the Preferred Securities, to the extent not paid by or on behalf of
Montana Power Capital, will be subject to the Guarantee (without
duplication) (the "Guarantee Payments"): (i) any accrued and unpaid
distributions required to be paid on the Preferred Securities, but only
if and to the extent that the Property Trustee has available funds
sufficient to make such payment, (ii) the Redemption Price with respect
to any Preferred Securities called for redemption by Montana Power
Capital, but only if and to the extent that the Property Trustee has
available funds sufficient to make such payment, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of
Montana Power Capital (unless the Junior Subordinated Debentures are
distributed to the Holders), the lesser of (a) the aggregate of the
liquidation preference and all accrued and unpaid distributions on the
Preferred Securities to the date of payment and (b) the amount of assets
of Montana Power Capital remaining available for distribution to Holders
of Preferred Securities. 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 Preferred Securities or by causing Montana
Power Capital to pay such amounts to such Holders. (Sections 1.01 and
5.01).
The Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity). (Section 5.05).
The Company has agreed in the Expense Agreement to provide funds to
Montana Power Capital as needed to pay obligations of Montana Power
Capital to parties other than Holders of Trust Securities. The Junior
Subordinated Debentures and the Guarantee, together with the obligations
of the Company with respect to the Preferred Securities under the
Indenture, the Trust Agreement, the Guarantee and the Expense Agreement,
constitute a full and unconditional guarantee of the Preferred Securities
by the Company.
AMENDMENTS
Except with respect to any changes that do not materially adversely
affect the rights of Holders of Preferred Securities (in which case no
consent will be required), the terms of the Guarantee may be changed only
with the prior approval of the Holders of Preferred Securities of at
least 66 2/3% of the liquidation preference amount of the outstanding
Preferred Securities. (Section 8.02).
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of
the Company to perform any of its payment or other obligations
thereunder. The Holders of a majority of the liquidation preference of
the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of the Guarantee or to direct the exercise
of any trust or power conferred upon the Guarantee Trustee under the
Guarantee. Any Holder of Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against Montana
Power Capital, the Guarantee Trustee or any other person or entity.
(Section 5.04).
The Company, as Guarantor, will be required to provide annually to the
Guarantee Trustee a statement as to the performance by the Company of
certain of its obligations under the Guarantee and as to any default in
such performance, and an officer's certificate as to the Company's
compliance with all conditions under the Guarantee. (Section 2.03).
CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default by the
Company in performance of the Guarantee, has undertaken to perform only
such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her
own affairs. Subject to this provision, the Guarantee Trustee is under
no obligation to exercise any of the powers vested in it by the Guarantee
at the request of any Holder of Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. (Section 3.01).
The Bank of New York will act as Guarantee Trustee. See DESCRIPTION
OF THE PREFERRED SECURITIES - "Concerning the Property Trustee."
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company
and will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Company to the same extent as the Junior Subordinated
Debentures. (Section 6.01). The Trust Agreement provides that each
Holder of Preferred Securities by acceptance thereof agrees to the
subordination provisions and other terms of the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
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, including the definitions therein of certain
terms, and the Trust Indenture Act. Whenever particular provisions or
defined terms in the Indenture are referred to herein, such provisions or
defined terms are incorporated by reference herein. The Indenture has
been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part.
GENERAL
The Indenture provides for the issuance of unsecured, subordinated
debentures (including the Junior Subordinated Debentures), notes or other
evidence of indebtedness by the Company (each a "Debt Security") in an
unlimited amount from time to time. The Junior Subordinated Debentures
constitute a separate series under the Indenture.
The Junior Subordinated Debentures will be limited in aggregate
principal amount to the sum of the aggregate liquidation preference
amount of the Preferred Securities and the consideration paid by the
Company for the Common Securities. The Junior Subordinated Debentures
are unsecured, subordinated obligations of the Company which rank junior
to all of the Company's Senior Indebtedness.
The entire outstanding principal amount of the Junior Subordinated
Debentures will become due and payable, together with any accrued and
unpaid interest thereon, including Additional Interest (as defined
herein), if any, on the date set forth on the cover page of this
Prospectus. The amounts payable as principal and interest on the Junior
Subordinated Debentures will be sufficient to provide for payment of
distributions payable on the Trust Securities.
If Junior Subordinated Debentures are distributed to Holders of
Preferred Securities in a termination of Montana Power Capital, such
Junior Subordinated Debentures will be issued in the form of one or more
global securities, and DTC, or any successor securities depositary for
the Preferred Securities, will act as depositary for the Junior
Subordinated Debentures. It is anticipated that the depositary
arrangements for the Junior Subordinated Debentures would be
substantially identical to those in effect for the Preferred Securities.
Payments of principal and interest on Junior Subordinated Debentures
will be payable, the transfer of Junior Subordinated Debenture will be
registrable, and Junior Subordinated Debentures will be exchangeable for
Junior Subordinated Debentures of other denominations of a like aggregate
principal amount, at the corporate trust office of the Debenture Trustee
in The City of New York; provided that payment of interest may be made at
the option of the Company by check mailed to the address of the persons
entitled thereto and that the payment in full of principal with respect
to any Junior Subordinated Debenture will be made only upon surrender of
such Junior Subordinated Debenture to the Debenture Trustee.
OPTIONAL REDEMPTION
The Company will have the right to redeem the Junior Subordinated
Debentures (i) on or after ____________, in whole at any time or in part
from time to time, at a redemption price equal to 100% of the principal
amount of the Junior Subordinated Debentures so redeemed plus any accrued
and unpaid interest thereon to the date fixed for redemption or (ii) upon
the occurrence and continuation of a Tax Event or an Investment Company
Event (each as defined below, and as so defined, collectively, a "Special
Event"), in whole but not in part, on any date within 90 days of such
occurrence, at a redemption price equal to 100% of the principal amount
of the Junior Subordinated Debentures then outstanding plus any accrued
and unpaid interest (including Additional Interest) thereon to the date
fixed for redemption, in each case subject to conditions described in the
third succeeding paragraph.
"Tax Event" means the receipt by Montana Power Capital or the Company
of an opinion of counsel experienced in such matters to the effect that,
as a result of any amendment to, 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, or as a result of any official administrative
or judicial pronouncement or decision interpreting or applying such laws
or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of original
issuance of the Preferred Securities, there is more than an insubstantial
risk that at such time or within 90 days of the date thereof (i) Montana
Power Capital is, or will be, subject to United States federal income tax
with respect to income received or accrued on the Junior Subordinated
Debentures, (ii) interest payable by the Company on the Junior
Subordinated Debentures is not, or will not be, fully deductible by the
Company for United States federal income tax purposes, or (iii) Montana
Power Capital is, or will be, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by Montana Power Capital
of an opinion of counsel, rendered by a law firm having a recognized
national tax and securities practice, to the effect that as a result of
the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in
1940 Act Law"), Montana Power Capital is or will be considered an
"investment company" that is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on
or after the date of original issuance of the Preferred Securities.
For so long as Montana Power Capital is the Holder of all the
outstanding Junior Subordinated Debentures, the proceeds of any such
redemption will be used by Montana Power Capital to redeem Preferred
Securities and Common Securities in accordance with their terms. The
Company may not redeem less than all the Junior Subordinated Debentures
unless all accrued and unpaid interest, including any Additional
Interest, if any, has been paid in full (or duly provided for) on all
outstanding Junior Subordinated Debentures for all quarterly interest
periods terminating on or prior to the date of redemption.
Any optional redemption of Junior Subordinated Debentures shall be
made upon not less than 30 nor more than 60 days' notice from the
Debenture Trustee to the Holders of Junior Subordinated Debentures, as
provided in the Indenture. (Section 404).
INTEREST
The Junior Subordinated Debentures shall bear interest at the rate per
annum set forth on the cover page of this Prospectus. Such interest is
payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year (each, an "Interest Payment Date"), commencing
, 199 , to the person in whose name each Junior Subordinated
Debenture is registered, by the close of business on the Business Day
next preceding such Interest Payment Date. It is anticipated that
Montana Power Capital will be the sole Holder of the Junior Subordinated
Debentures.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months and, for any period
shorter than a full month, on the basis of the actual number of days
elapsed in such period (Section 310). In the event that any date on
which interest is payable on the Junior Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be
made on the next succeeding day which 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 the date the payment was
originally payable. (Section 113).
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default shall have occurred and be
continuing, the Company has the right to defer payments of interest on
the Junior Subordinated Debentures for Extension Periods of up to 20
consecutive quarters; provided that any such Extension Period may not
extend beyond the maturity of the Junior Subordinated Debentures. Prior
to the end of an Extension Period, the Company may, and at the end of
such Extension Period, the Company shall, pay all interest then accrued
and unpaid (together with interest thereon at the stated rate borne
thereby, to the extent permitted by applicable law). Upon the
termination of any Extension Period and the payment of all amounts then
due, including interest on deferred interest payments, the Company may
elect a new Extension Period, subject to the requirements set forth
herein. If interest payments are so deferred, distributions on the
Preferred Securities also will be deferred, and the Company will not be
permitted to (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than dividends or distributions in common
stock of the Company) or (ii) make any payment of principal of, or
interest or premium, if any, on, or repay, repurchase or redeem, or make
any sinking fund payment with respect to any indebtedness that is pari
passu with or junior in interest to the Junior Subordinated Debentures or
make any guarantee payments with respect to such indebtedness.
ADDITIONAL INTEREST
So long as any Preferred Securities remain outstanding, if Montana
Power Capital shall be required to pay, with respect to its income
derived from the interest payments on the Junior Subordinated Debentures,
any amounts for or on account of any taxes, duties, assessments or
governmental charges of whatever nature imposed by the United States, or
any other taxing authority, then, in any such case, the Company will pay
as interest on such Junior Subordinated Debentures such additional
interest ("Additional Interest") as may be necessary in order that the
net amounts received and retained by Montana Power Capital after the
payment of such taxes, duties, assessments or governmental charges shall
result in Montana Power Capital's having such funds as it would have had
in the absence of the payment of such taxes, duties, assessments or
governmental charges. (Section 313).
DEFEASANCE
The principal amount of any series of Debt Securities issued under the
Indenture will be deemed to have been paid for purposes of the Indenture,
and 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 Debenture Trustee or any paying agent, 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 such Debt Securities,
Government 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 Debenture Trustee, 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 the Debt Securities of such
series that are outstanding; provided that if such deposit shall have
been made prior to the maturity of such Debt Securities, the Company
shall have delivered to the Debenture Trustee an opinion of counsel to
the effect that the holders of such Debt Securities will not recognize
income, gain or loss for federal income tax purposes as a result of the
satisfaction and discharge of the Company's indebtedness in respect of
such Debt Securities, and such holders will be subject to federal income
taxation on the same amounts and in the same manner and at the same times
as if such satisfaction and discharge had not occurred. For this
purpose, Government Obligations include direct obligations of, or
obligations unconditionally guaranteed by, the United States of America
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. (Sections 101 and 701).
SUBORDINATION
The Junior Subordinated Debentures will be subordinate and junior in
right of payment to all Senior Indebtedness of the Company as provided in
the Indenture. No payment of principal of (including redemption and
sinking fund payments), or interest on, the Junior Subordinated
Debentures may be made (i) upon the occurrence of certain events of
bankruptcy, insolvency or reorganization, (ii) if any Senior Indebtedness
is not paid when due, (iii) if any other default has occurred pursuant to
which the holders of Senior Indebtedness shall have the right to
accelerate the maturity thereof, and, with respect to (ii) and (iii),
such default has not been cured or waived, or (iv) if the maturity of any
series of Debt Securities has been accelerated, because of an event of
default with respect thereto, which remains uncured. Upon any
distribution of assets of the Company to creditors upon any dissolution,
winding-up, liquidation or reorganization, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all principal of, and premium, if any, and interest due or
to become due on, all Senior Indebtedness must be paid in full before the
Holders of the Junior Subordinated Debentures are entitled to receive or
retain any payment thereon. (Section 1502).
The term Senior Indebtedness is defined in the Indenture to mean all
obligations (other than non-recourse obligations and the indebtedness
issued under the Indenture) of, or guaranteed or assumed by, the Company
for borrowed money, including both senior and subordinated indebtedness
for borrowed money (other than the Debt Securities), or for the payment
of money relating to any lease which is capitalized on the consolidated
balance sheet of the Company and its subsidiaries in accordance with
generally accepted accounting principles as in effect from time to time,
or evidenced by bonds, debentures, notes or other similar instruments,
and in each case, amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligations, whether existing as
of the date of the Indenture or subsequently incurred by the Company
unless, in the case of any particular indebtedness, obligation, renewal,
extension or refunding, the instrument creating or evidencing the same or
the assumption or guarantee of the same expressly provides that such
indebtedness, obligation, renewal, extension or refunding is not superior
in right of payment to or is pari passu with the Junior Subordinated
Debentures; provided that the Company's obligations under the Guarantee
shall not be deemed to be Senior Indebtedness. (Section 101).
The Indenture does not limit the aggregate amount of Senior
Indebtedness that may be issued. As of June 30, 1996, the Company had
approximately $625,000,000 principal amount of indebtedness for borrowed
money constituting Senior Indebtedness.
CERTAIN COVENANTS OF THE COMPANY
The Company covenants that it shall not, and shall not permit any
subsidiary of the Company to, (a) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock (other than dividends
or distributions in common stock of the Company), or (b) make any payment
of principal of or, interest or premium, if any, on or repay or
repurchase or redeem, or make any sinking fund payment with respect to,
any indebtedness that is pari passu with or junior in interest to the
Debt Securities or make any guarantee payments with respect to such
indebtedness if at such time (i) there shall have occurred and be
continuing a default under the Indenture with respect to the payment of
principal of or interest on any Debt Security (whether before or after
expiration of any period of grace), or (ii) the Company shall have
elected to extend any interest payment period, and any such extension
period, or any extension thereof, shall be continuing. (Section 608).
The Company also covenants that it shall (i) maintain direct or indirect
ownership of all of the Common Securities, (ii) not voluntarily (to the
extent permitted by law) dissolve, terminate, liquidate or wind up
Montana Power Capital, except in connection with a distribution of the
Junior Subordinated Debentures to the Holders of the Preferred Securities
in liquidation of Montana Power Capital or in connection with certain
mergers, consolidations or amalgamations permitted by the Trust
Agreement, (iii) remain the sole Depositor under the Trust Agreement and
timely perform in all material respects all of its duties as Depositor,
and (iv) use reasonable efforts to cause Montana Power Capital to remain
a business trust and otherwise continue to be treated as a grantor trust
for federal income tax purposes. (Section 609).
CONSOLIDATION, MERGER, AND SALE OF ASSETS
Under the terms of the Indenture, the Company may not consolidate with
or merge into any other entity or convey, transfer or lease its
properties and assets substantially as an entirety to any entity, unless
(i) the corporation formed by such consolidation or into which the
Company is merged or the entity which acquires by conveyance or transfer,
or which leases, the property and assets of the Company substantially as
an entirety shall be an entity organized and validly existing under the
laws of any domestic jurisdiction and such entity assumes the Company's
obligations on all Debt Securities and performance of every covenant
under the Indenture, (ii) immediately after giving effect to the
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing, and (iii) the Company shall have delivered to
the Debenture Trustee an Officer's Certificate and an Opinion of Counsel
as provided in the Indenture. (Section 1101).
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to the Debt Securities of any series: (a) failure
to pay any interest on the Debt Securities of such series within 30 days
after the same becomes due and payable; (b) failure to pay principal or
premium, if any, on the Debt Securities of such series when due and
payable; (c) failure to perform, or breach of, any other covenant or
warranty of the Company in the Indenture (other than a covenant or
warranty of the Company in the Indenture solely for the benefit of one or
more series of Debt Securities other than such series) for 60 days after
written notice to the Company by the Debenture Trustee, or to the Company
and the Debenture Trustee by the Holders of at least 33% in principal
amount of the Debt Securities of such series outstanding under the
Indenture as provided in the Indenture; (d) the entry by a court having
jurisdiction in the premises of (1) 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 (2) 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 unstayed and in effect for a period of 90 consecutive days; and
(e) the commencement by the Company of a voluntary case or proceeding
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
other similar proceeding or to the commencement of any bankruptcy or
insolvency case or proceeding against it under any applicable federal or
state law 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. (Section 801).
An Event of Default with respect to the Debt Securities of a
particular series may not necessarily constitute an Event of Default with
respect to Debt Securities of any other series issued under the
Indenture.
If an Event of Default due to the default in payment of principal of
or interest on any series of Debt Securities or due to the default in the
performance or breach of any other covenant or warranty of the Company
applicable to the Debt Securities of such series but not applicable to
all series occurs and is continuing, then either the Trustee or the
Holders of not less than 33% in principal amount of the outstanding Debt
Securities of such series (or, if such persons fail to act, Holders of
not less than 33% in liquidation preference of the outstanding Preferred
Securities) may declare the principal of all of the Debt Securities of
such series and interest accrued thereon to be due and payable
immediately (subject to the subordination provisions of the Indenture).
If an Event of Default due to the default in the performance of any other
covenants or agreements in the Indenture applicable to all outstanding
Debt Securities or due to certain events of bankruptcy, insolvency or
reorganization of the Company has occurred and is continuing, either the
Trustee or the Holders of not less than 33% in principal amount of all
outstanding Debt Securities, considered as one class, and not the Holders
of the Debt Securities of any one of such series, may make such
declaration of acceleration (subject to the subordination provisions of
the Indenture).
At any time after the declaration of acceleration with respect to the
Debt Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained, the Event or
Events of Default giving rise to such declaration of acceleration will,
without further act, be deemed to have been waived, 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 Debenture Trustee a sum
sufficient to pay
(1) all overdue interest on all Debt Securities of such series;
(2) the principal of and premium, if any, on any 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 Debt Securities;
(3) interest upon overdue interest at the rate or rates prescribed
therefor in such Debt Securities, to the extent that payment of such
interest is lawful; and
(4) all amounts then due to the Debenture Trustee under the
Indenture;
(b) any other Event or Events of Default with respect to Debt Securities
of such series, other than the nonpayment of the principal of the 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.
(Section 802).
Subject to the provisions of the Indenture relating to the duties of
the Debenture Trustee, the Debenture Trustee will be under no obligation
to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall
have offered to the Debenture Trustee reasonable indemnity (Section 903).
If an Event of Default has occurred and is continuing in respect of a
series of Debt Securities, subject to such provisions for the
indemnification of the Debenture Trustee, the Holders of a majority in
principal amount of the outstanding Debt Securities of such series will
have the right to direct the time, method and 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 Debt Securities of such series; provided, however, that if
an Event of Default occurs and is continuing with respect to more than
one series of Debt Securities, the Holders of a majority in aggregate
principal amount of the outstanding Debt Securities of all such series,
considered as one class, will have the right to make such direction, and
not the Holders of the Debt Securities of any one of such series; and
provided, further, that such direction will not be in conflict with any
rule of law or with the Indenture. (Section 812).
No Holder of Debt Securities of any series will have any right to
institute any proceeding with respect to the Indenture, or for the
appointment of a receiver or a trustee, or for any other remedy
thereunder, unless (i) such Holder has previously given to the Debenture
Trustee written notice of a continuing Event of Default with respect to
the Debt Securities of such series, (ii) the Holders of at least 33% in
aggregate principal amount of the outstanding Debt Securities of all
series in respect of which an Event of Default shall have occurred and be
continuing, considered as one class, have made written request to the
Debenture Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee, (iii) such Holder or Holders have
offered reasonable indemnity to the Debenture Trustee to institute such
proceeding and (iv) the Debenture Trustee has failed to institute any
proceeding, and has not received from the Holders of a majority in
aggregate principal amount of the outstanding Debt Securities of such
series a direction inconsistent with such request, within 60 days after
such notice, request and offer (Section 807). However, such limitations
do not apply to a suit instituted by a Holder of a Debt Security for the
enforcement of payment of the principal of or any premium or interest on
such Debt Security or a holder of a Preferred Security representing an
interest in a Debt Security on or after the applicable due date specified
in such Debt Security. (Section 808).
The Company will be required to furnish to the Debenture Trustee
annually a statement by an appropriate officer as to such officer's
knowledge of the Company's compliance with all conditions and covenants
under the Indenture, such compliance to be determined without regard to
any period of grace or requirement of notice under the Indenture.
(Section 606).
MODIFICATION AND WAIVER
Without the consent of any Holder of Debt Securities, the Company and
the Debenture Trustee may enter into one or more supplemental indentures
for any of the following purposes: (a) to evidence the assumption by any
permitted successor to the Company of the covenants of the Company in the
Indenture and in the Debt Securities; or (b) to add one or more covenants
of the Company or other provisions for the benefit of the Holders of
outstanding Debt Securities or to surrender any right or power conferred
upon the Company by the Indenture; or (c) to add any additional Events of
Default with respect to outstanding Debt Securities; or (d) 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 will
adversely affect the interests of the Holders of Debt Securities of any
series in any material respect, such change, elimination or addition will
become effective with respect to such series only (1) when the consent of
the Holders of Debt Securities of such series has been obtained in
accordance with the Indenture, or (2) when no Debt Securities of such
series remain outstanding under the Indenture; or (e) to provide
collateral security for all but not part of the Debt Securities; or (f)
to establish the form or terms of Debt Securities of any other series as
permitted by the Indenture; or (g) 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 (h) to
evidence and provide for the acceptance of appointment of a successor
Debenture Trustee under the Indenture with respect to the Debt Securities
of one or more series and to add to or change any of the provisions of
the Indenture as shall be necessary to provide for or to facilitate the
administration of the trusts under the Indenture by more than one
trustee; or (i) to provide for the procedures required to permit the
utilization of a noncertificated system of registration for the Debt
Securities of all or any series; or (j) to change any place where (1) the
principal of and premium, if any, and interest, if any, on all or any
series of Debt Securities shall be payable, (2) all or any series of Debt
Securities may be surrendered for registration of transfer or exchange
and (3) notices and demands to or upon the Company in respect of Debt
Securities and the Indenture may be served; or (k) to cure any ambiguity
or inconsistency or to add or change any other provisions with respect to
matters and questions arising under the Indenture, provided such changes
or additions shall not adversely affect the interests of the Holders of
Debt Securities of any series in any material respect (Section 1201).
The Holders of at least a majority in aggregate principal amount of
the Debt Securities of all series then outstanding may waive compliance
by the Company with certain restrictive provisions of the Indenture
(Section 607). The Holders of not less than a majority in principal
amount of the outstanding Debt Securities of any series may waive any
past default under the Indenture with respect to such series, except a
default in the payment of principal, premium, or interest and certain
covenants and provisions of the Indenture that cannot be modified or be
amended without the consent of the Holder of each outstanding Debt
Security of such series affected; provided, however, that so long as
Preferred Securities are outstanding such waiver shall require the
consent of a majority in liquidation preference of outstanding Preferred
Securities (Section 813).
Without limiting the generality of the foregoing, if the Trust
Indenture Act is amended after the date of the 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 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 of the Trust Indenture Act or to effect such
changes, additions or elimination, and the Company and the Debenture
Trustee may, without the consent of any Holders, enter into one or more
supplemental indentures to evidence or effect such amendment (Section
1201).
Except as provided above, the consent of the Holders of not less than
a majority in aggregate principal amount of the 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 or modifying in any
manner the rights of the Holders of such Debt Securities under the
Indenture pursuant to one or more supplemental indentures; provided,
however, that if less than all of the series of 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 Debt Securities of all series so directly affected,
considered as one class, and the consent of a majority in liquidation
preference of the related outstanding Preferred Securities will be
required; and provided further, that no such amendment or modification
may without the consent of each Holder of Debt Securities and Preferred
Securities affected thereby (a) change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any Debt
Security, 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 change the coin or currency (or other
property) in which any 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
Debt Security (or, in the case of redemption, on or after the redemption
date), (b) reduce the percentage in principal amount of the outstanding
Debt Security of any series, (or, if applicable, in liquidation
preference of Preferred Securities) 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 any default thereunder and its
consequences, or reduce the requirements for quorum or voting, 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 Debt Security of any series. 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
one or more particular series of Debt Securities, or modifies the rights
of the Holders of Debt Securities of such series with respect to such
covenant or other provision, will be deemed not to affect the rights
under the Indenture of the Holders of the Debt Securities of any other
series. (Section 1202).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the outstanding Debt Securities have given
any request, demand, authorization, direction, notice, consent or waiver
under the Indenture, or whether a quorum is present at the meeting of the
Holders of Debt Securities, Debt Securities owned by the Company or any
other obligor upon the Debt Securities or any affiliate of the Company or
of such other obligor (unless the Company, such affiliate or such obligor
owns all Debt Securities outstanding under the Indenture, determined
without regard to this provision) shall be disregarded and deemed not to
be outstanding. (Section 101).
If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, election, waiver or other Act,
the Company may, at its option, fix in advance a record date for the
determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date
shall be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of the outstanding Debt Securities
have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Debt Securities shall be computed as of the
record date. Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of a Holder shall bind every
future Holder of the same Debt Security and the Holder of every Debt
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 Debenture Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Debt
Security. (Section 104).
RESIGNATION OR REMOVAL OF DEBENTURE TRUSTEE
The Debenture Trustee may resign at any time by giving written notice
thereof to the Company or may be removed at any time by Act of the
Holders of a majority in principal amount of all series of Debt
Securities then outstanding delivered to the Debenture Trustee and the
Company (accompanied, at any time that the Preferred Securities are
outstanding, by the consent of a majority in liquidation preference of
the outstanding Preferred Securities). No resignation or removal of the
Debenture Trustee and no appointment of a successor trustee will become
effective until the acceptance of appointment by a successor trustee in
accordance with the requirements of the Indenture. So long as no Event
of Default or event which, after notice or lapse of time, or both, would
become an Event of Default has occurred and is continuing and except with
respect to a Debenture Trustee appointed by Act of the Holders, if the
Company has delivered to the Debenture Trustee a resolution of its Board
of Directors appointing a successor trustee and such successor has
accepted such appointment in accordance with the terms of the Indenture,
the Debenture Trustee will be deemed to have resigned and the successor
will be deemed to have been appointed as trustee in accordance with the
Indenture. (Section 910).
NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they may appear in the security register
therefor. (Section 106).
TITLE
The Company, the Debenture Trustee, and any agent of the Company or
the Debenture Trustee, may treat the Person in whose name Debt Securities
are registered as the absolute owner thereof (whether or not such Debt
Securities may be overdue) for the purpose of making payments and for all
other purposes irrespective of notice to the contrary. (Section 308).
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
REGARDING THE DEBENTURE TRUSTEE
The Debenture Trustee under the Indenture is The Bank of New York. In
addition to acting as Debenture Trustee under the Indenture, The Bank of
New York acts as trustee under the Company's Mortgage and Deed of Trust
with respect to substantially all the properties of the Company, which
secures the Company's first mortgage bonds. In addition, The Bank of New
York acts as Property Trustee under the Trust Agreement and as Guarantee
Trustee under the Guarantee. The Bank of New York (Delaware) acts as the
Delaware Trustee under the Trust Agreement. The Company may maintain
deposit accounts and conduct other banking transactions with the
Debenture Trustee. See DESCRIPTION OF THE PREFERRED SECURITIES -
"Concerning the Property Trustee" and DESCRIPTION OF THE GUARANTEE
"Concerning the Guarantee Trustee."
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
As long as payments of interest and other payments are made when due
on the Junior Subordinated Debentures, such payments will be sufficient
to cover Distributions and other payments due on the Preferred
Securities, primarily because (i) the aggregate principal amount of the
Junior Subordinated Debentures will be equal to the sum of the aggregate
stated liquidation preference amount of the Preferred Securities and the
Common Securities; (ii) the interest rate and interest and other payment
dates on the Junior Subordinated Debentures will match the Distribution
rate and Distribution and other payment dates for the Preferred
Securities; (iii) the Company shall pay for all and any costs, expenses
and liabilities of Montana Power Capital except Montana Power Capital's
obligations to Holders of the Preferred Securities under the Preferred
Securities; and (iv) the Trust Agreement further provides that Montana
Power Capital will not engage in any activity that is not consistent with
the limited purposes of Montana Power Capital.
Payments of Distributions and other amounts due on the Preferred
Securities (to the extent Montana Power Capital has funds available for
the payment of such Distributions) are irrevocably guaranteed by the
Company as and to the extent set forth under "Description of the
Guarantee." Taken together, the Company's obligations under the Junior
Subordinated Debentures, the Indenture, the Trust Agreement, the Expense
Agreement and the Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of distributions and
other amounts due on the Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of Montana Power Capital's
obligations under the Preferred Securities. If and to the extent that
the Company does not make payments on the Junior Subordinated Debentures,
Montana Power Capital will not pay Distributions or other amounts due on
the Preferred Securities. The guarantee does not cover payment of
Distributions when Montana Power Capital does not have sufficient funds
to pay such Distributions. In such event, a Holder of Preferred
Securities may institute a legal proceeding directly against the Company
to enforce payment of such Distributions to such Holder after the
respective due dates. The obligations of the Company under the Guarantee
are subordinate and junior in right of payment to all Senior Indebtedness
of the Company.
Notwithstanding anything to the contrary in the Indenture, the Company
has the right to set-off any payment it is otherwise required to make
thereunder with and to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the
Guarantee.
A Holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee
Trustee, Montana Power Capital or any other person or entity.
The Preferred Securities evidence preferred undivided beneficial
interests in Montana Power Capital, and Montana Power Capital exits for
the sole purpose of issuing the Preferred Securities and the Common
Securities and investing the proceeds thereof in Junior Subordinated
Debentures. A principal difference between the rights of a Holder of
Preferred Securities and a holder of Junior Subordinated Debentures is
that a holder of Junior Subordinated Debentures is entitled to receive
from the Company the principal amount of and interest accrued on Junior
Subordinated Debentures held, while a Holder of Preferred Securities is
entitled to receive Distributions from Montana Power Capital (or from the
Company under the Guarantee) if and to the extent Montana Power Capital
has funds available for the payment of such Distributions.
Upon any voluntary or involuntary termination, winding-up or
liquidation of Montana Power Capital involving the liquidation of the
Junior Subordinated Debentures, the Holders of the Preferred Securities
will be entitled to receive, out of assets held by Montana Power Capital,
the Liquidation Distribution in cash. See DESCRIPTION OF PREFERRED
SECURITIES-"Liquidation Distribution upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the
Property Trustee, as holder of the Junior Subordinated Debentures, would
be a subordinated creditor of the Company, subordinated in right of
payment to all Senior Indebtedness, but entitled to receive payment in
full of principal and interest before any stockholders of the Company
receive payments or distributions. Since the Company is the guarantor
under the Guarantee and has agreed to pay for all costs, expenses and
liabilities of Montana Power Capital (other than Montana Power Capital's
obligations to the Holders of the Preferred Securities), the positions of
a Holder of Preferred Securities and a holder of the Junior Subordinated
Debentures relative to the other creditors and to stockholders of the
Company in the event of liquidation or bankruptcy of the Company would be
substantially the same.
A default or event of default under any Senior Indebtedness of the
Company will not constitute a default or Event of Default under the
Indenture. However, in the event of payment defaults under, or
acceleration of, Senior Indebtedness of the Company, the subordination
provisions of the Indenture provide that no payments may be made in
respect of the Junior Subordinated Debentures until such Senior
Indebtedness has been paid in full or any payment default thereunder has
been cured or waived. Failure to make required payments on the Junior
Subordinated Debentures would constitute an Event of Default under the
Indenture.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income
tax consequences of the ownership of Preferred Securities as of the date
hereof and represents the opinion of Reid & Priest LLP, special counsel
to the Company, insofar as it relates to matters of law or legal
conclusions. Except where noted, it deals only with Preferred 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, persons holding Preferred Securities as a part
of a hedging or conversion transaction or a straddle, United States
Holders (as defined herein) whose "functional currency" is not the U.S.
dollar, or persons who are not United States Holders. In addition, this
discussion does not address the tax consequences to persons who purchase
Preferred 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 ("Code"), and
regulations, rulings and judicial decisions thereunder as of the date
hereof, and such authorities may be repealed, revoked or modified so as
to result in 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 Preferred Securities may differ from
the treatment described below.
PROSPECTIVE PURCHASERS OF PREFERRED SECURITIES, INCLUDING PERSONS WHO
ARE NOT UNITED STATES HOLDERS AND PERSONS WHO PURCHASE PREFERRED
SECURITIES IN THE SECONDARY MARKET, ARE ADVISED TO CONSULT WITH THEIR TAX
ADVISORS AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE
OWNERSHIP AND DISPOSITION OF PREFERRED 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 Holder that is a
citizen or 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 MONTANA POWER CAPITAL
Reid & Priest LLP, special counsel to the Company and Montana Power
Capital, is of the opinion that, under current law and assuming full
compliance with the terms of the Indenture and the instruments
establishing Montana Power Capital (and certain other documents), Montana
Power Capital 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 Holder will be treated as owning an
undivided beneficial interest in the Junior Subordinated Debentures.
Investors should be aware that the opinion of Reid & Priest LLP is not
binding on the Internal Revenue Service ("IRS") or the courts.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
Based on the advice of its counsel, the Company believes and intends
to take the position that the Junior Subordinated Debentures will
constitute indebtedness for United States federal income tax purposes.
No assurance can be given that such position will not be challenged by
the Internal Revenue Service or, if challenged, that such a challenge
will not be successful. By purchasing and accepting Preferred
Securities, each Holder covenants to treat the Junior Subordinated
Debentures as indebtedness and the Preferred Securities as evidence of an
indirect beneficial ownership in the Junior Subordinated Debentures. The
remainder of this discussion assumes that the Junior Subordinated
Debentures 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 ("Revenue
Bill"), the revenue portion of President Clinton's budget proposal, was
released. The Revenue Bill would, among other things, generally deny
interest deductions for interest on an instrument issued by a corporation
that has a maximum weighted average maturity of more than 40 years. The
Revenue Bill would also 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 provisions were proposed
to be effective generally for instruments issued on or after December 7,
1995. If either provision were to apply to the Junior Subordinated
Debentures, the Company would be unable to deduct interest on the Junior
Subordinated Debentures. 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 Junior Subordinated Debentures. If legislation were
enacted limiting, in whole or in part, the deductibility by the Company
of interest on the Junior Subordinated Debentures for United States
federal income tax purposes, such enactment could give rise to a Tax
Event.
PAYMENTS OF INTEREST
Except as set forth below, stated interest on Junior Subordinated
Debenture 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 AND POTENTIAL EXTENSION OF INTEREST PAYMENT
PERIOD
Under income tax regulations that recently became effective, the
Company believes that the Junior Subordinated Debentures will not be
treated as issued with original issue discount or 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.
The Company has the right to defer payments of interest on the Junior
Subordinated Debentures for Extension Periods of up to 20 consecutive
calendar quarters and to pay as a lump sum at the end of such period all
of the interest that has accrued during such period. During any such
Extension Period, distributions on the Preferred Securities will also be
deferred. Should the Company exercise this option to extend the interest
payment periods, the Junior Subordinated Debentures would at that time be
treated as issued with OID and all the stated interest payments on the
Junior Subordinated Debentures would thereafter be treated as OID as long
as they remained outstanding. As a result, United States Holders of
Preferred Securities would, in effect, be required to accrue interest
income even if the holders are on the cash method of tax accounting.
Consequently, in the event that the interest payment period is extended,
a United States Holder would 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 Junior Subordinated
Debentures. The tax basis of a Preferred Security will be increased by
the amount of any OID that is included in income, and will be decreased
when and if distributions are subsequently received from Montana Power
Capital by such Holders.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF
MONTANA POWER CAPITAL
As described under the caption DESCRIPTION OF THE PREFERRED SECURITIES
"Liquidation Distribution upon Termination," Junior Subordinated
Debentures may be distributed to Holders of Preferred Securities in
exchange for the Preferred Securities and in liquidation of Montana Power
Capital. Under current law, for United States federal income tax
purposes, such a 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 Junior Subordinated Debentures equal to such
Holder's aggregate tax basis in its Preferred Securities. A United
States Holder's holding period for the Junior Subordinated Debentures
received in liquidation of Montana Power Capital would include the period
during which such Holder held the Preferred Securities.
As described under the caption DESCRIPTION OF THE PREFERRED SECURITIES
"Redemption," the Junior Subordinated Debentures may be redeemed for
cash and the proceeds of such redemption distributed to Holders of
Preferred Securities in redemption of the Preferred Securities. Under
current law, such a redemption would, for United States federal income
tax purposes, constitute a taxable disposition of the Preferred
Securities, and a Holder would recognize gain or loss as if such Holder
had sold such redeemed Preferred Securities. See "Sale, Exchange and
Redemption of the Preferred Securities."
SALE, EXCHANGE AND REDEMPTION OF THE PREFERRED SECURITIES
Upon the sale, exchange or redemption of Preferred 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 Preferred Securities. A United
States Holder's adjusted tax basis will, in general, be the issue price
of the Preferred Securities, increased by any OID previously included in
income by the United States Holder and reduced by any distributions on
the Preferred Securities. Such gain or loss 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 Preferred 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 Preferred
Securities will be reported to holders on Forms 1099, which should be
mailed to such holders by January 31 following each calendar year.
For so long as the Preferred Securities will be held in book-entry
only form, Montana Power Capital will report annually to Cede & Co.,
as holder of record of the Preferred Securities, the interest
income (or if an Extension Period has occurred, the OID) related to the
Junior Subordinated Debentures that accrued during the year. Montana
Power Capital currently intends to report such information on Form 1099
prior to January 31, following each calendar year. The Underwriters have
indicated to Montana Power Capital that, to the extent that they hold
Preferred Securities as nominees for beneficial holders, they expect to
report the interest income (or OID, if appropriate) that accrued during
the calendar year on such Preferred Securities to such beneficial holders
on Forms 1099 by January 31 following each calendar year. Under current
law, holders of Preferred Securities who hold as nominees for beneficial
holders will not have any obligation to report information regarding the
beneficial holders to Montana Power Capital. Montana Power Capital,
moreover, will not have any obligation to report to beneficial holders
who are not also record holders. Thus, beneficial holders of Preferred
Securities who hold their Preferred Securities through nominees other
than the Underwriters will receive Forms 1099 reflecting the income on
their Preferred Securities from such nominee holders rather than from
Montana Power Capital or the Underwriters.
Payments made in respect of, and proceeds from the sale of, Preferred
Securities (or Junior Subordinated Debentures distributed to holders of
Preferred Securities) may be subject to "backup" withholding tax of 31%
if the holder fails to comply with certain identification requirements,
fails to report in full dividend or interest income or does not otherwise
establish its entitlement to an exemption. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax
liability, provided certain required information is provided by the
holder to the Internal Revenue Service.
These information reporting and backup withholding tax rules are
subject to temporary Treasury Regulations. Accordingly, the application
of such rules to the Preferred Securities could be changed.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The statements made as to matters of law and legal conclusions under
"Business Utility Division Regulation and Rates" and
"Business Environment" in the Company's Annual Report on Form 10-K
incorporated herein by reference have been reviewed by Michael E.
Zimmerman, Esq., General Counsel of the Company, and are set forth
therein and herein upon the authority of such Counsel as expert. As of
June 30, 1996, Mr. Zimmerman owned 2,672 shares of the Company's common
stock and held options to purchase 16,700 additional shares at the market
price existing on the date of grant. Mr. Zimmerman's shares of common
stock, including the shares subject to option, have a current fair market
value of approximately $433,000.
LEGALITY
Certain matters of Delaware law relating to the validity of the
Preferred Securities, the enforceability of the Trust Agreement and the
creation of Montana Power Capital are being passed upon by Richards,
Layton & Finger, P.A., Special Delaware counsel for the Company and
Montana Power Capital. The legality of the other securities offered
hereby will be passed upon for the Company and Montana Power Capital by
Michael E. Zimmerman, Esq., General Counsel of the Company and by Reid &
Priest LLP, New York, New York, and for the Underwriters by Milbank,
Tweed, Hadley & McCloy, New York, New York. However, all matters
pertaining to incorporation of the Company and all other matters of
Montana law will be passed upon only by Michael E. Zimmerman, Esq.
Certain United States federal income taxation matters will be passed upon
for the Company and Montana Power Capital by Reid & Priest LLP, special
tax counsel to the Company and Montana Power Capital.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement,
the Company and Montana Power Capital have agreed that Montana Power
Capital will issue and sell to each of the Underwriters named below, and
each of the Underwriters, for whom Goldman, Sachs & Co., Dean Witter
Reynolds Inc., Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated are acting as Representatives, has severally agreed to
purchase from Montana Power Capital the respective number of Preferred
Securities set forth opposite its name below:
Number of
Preferred Securities
Underwriters
------------ ______________________
Goldman, Sachs & Co. . . . . . . . . . .
Dean Witter Reynolds Inc. . . . . . . . .
Lehman Brothers Inc. . . . . . . . . . .
Merrill Lynch, Pierce, Fenner & Smith
Incorporated. . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . ===============
Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Preferred
Securities offered hereby, if any are taken.
The Underwriters propose to offer the Preferred Securities in part
directly to the public at the initial public offering price set forth on
the cover page of this Prospectus, and in part to certain securities
dealers at such price less a concession of $. per unit of Preferred
Securities. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $. per unit of Preferred Securities to
certain brokers and dealers. After the Preferred Securities are released
for sale to the public, the offering price and other selling terms may
from time to time be varied by the Representatives.
In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Junior Subordinated Debentures,
the Underwriting Agreement provides that the Company will pay as
compensation, for the Underwriters' arranging the investment therein of
such proceeds, an amount of $ per unit of Preferred Securities for the
accounts of the several Underwriters.
The Company and Montana Power Capital have agreed that, during the
period beginning from the date of the Underwriting Agreement and
continuing to an including the earlier of (i) the termination of trading
restriction on the Preferred Securities, as determined by the
Underwriters, and (ii) 30 days after the closing date, they will not
offer, sell, contract to sell or otherwise dispose of any Preferred
Securities, any other beneficial interests in the assets of Montana Power
Capital or any preferred securities or any other securities of the
Company or Montana Power Capital which are substantially similar to the
Preferred Securities, including any guarantee of such securities, or any
securities convertible or exchangeable for or that represent the right to
receive preferred securities or any such substantially similar securities
of either the Company or Montana Power Capital, without the prior written
consent of the Representatives, except for the Preferred Securities and
the Guarantee offered in connection with the offering.
Prior to this offering, there has been no public market for the
Preferred Securities. Application will be made to list the Preferred
Securities on the NYSE. In order to meet one of the requirements for
listing the Preferred Securities on the NYSE, the Underwriters will
undertake to sell lots of 100 or more Preferred Securities to a minimum
of 400 beneficial holders. Trading of the Preferred Securities on the
NYSE is expected to commence within a seven-day period after the initial
delivery of the Preferred Securities. The Representatives have advised
the Company that they intend to make a market in the Preferred Securities
prior to commencement of trading on the NYSE, but are not obligated to do
so and may discontinue any such market making at any time without notice.
The Company and Montana Power Capital have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
1933 Act.
Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated engage in transactions with, and from time to time have
performed services for, the Company in the ordinary course of business.
<PAGE BREAK>
==================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES DESCRIBED IN THIS PROSPECTUS
OR AN OFFER TO SELL OR THE SOLICITATION
OF ANY OFFER TO BUY SUCH SECURITIES IN
ANY CIRCUMSTANCES IN WHICH SUCH OFFER
OR SOLICITATION IS UNLAWFUL. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
-------------------
TABLE OF CONTENTS
Page
-----
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE................2
AVAILABLE INFORMATION....................2
RISK FACTORS.............................3
THE COMPANY..............................6
SELECTED FINANCIAL INFORMATION...........7
USE OF PROCEEDS..........................8
DESCRIPTION OF THE PREFERRED
SECURITIES............................8
DESCRIPTION OF THE GUARANTEE.............15
DESCRIPTION OF THE JUNIOR
SUBORDINATED DEBENTURES...............17
RELATIONSHIP AMONG THE
PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEE.....................25
CERTAIN UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES.......................26
EXPERTS..................................29
LEGALITY.................................29
UNDERWRITING.............................30
==================================================
==================================================
PREFERRED SECURITIES
MONTANA POWER CAPITAL I
% CUMULATIVE QUARTERLY INCOME
PREFERRED SECURITIES, SERIES A ("QUIPS")
GUARANTEED TO THE EXTENT
MONTANA POWER CAPITAL I HAS FUNDS
AS SET FORTH HEREIN BY
THE MONTANA POWER COMPANY
-----------
PROSPECTUS
----------
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
REPRESENTATIVES OF THE UNDERWRITERS
==================================================
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses payable by the Company in
connection with the issuance and distribution of the securities to be
registered.
Filing fee Securities and Exchange Commission . . . . . . . $ 19,697
Fees of the Trustees . . . . . . . . . . . . . . . . . 17,500*
Fees of counsel to Company and Trust . . . . . . . . . . . . 150,000*
Auditors' fees . . . . . . . . . . . . . . . . . . . . . . . 55,000*
Rating agencies' fees . . . . . . . . . . . . . . . . . . . 45,000*
Printing and engraving. . . . . . . . . . . . . . . . . . . 20,000*
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 27,803*
---------
Total expenses $335,000*
=========
----------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Restated Articles of Incorporation of the Company provide for the
indemnification of directors and officers to the extent and in the manner
provided in Sections 35-1-451 through 35-1-457, Montana Code Annotated,
which Sections are as follows:
35-1-451. Definitions. As used in 35-1-451 through 35-1-459, the
following definitions apply:
(1) "Corporation" includes any domestic or foreign predecessor entity
of a corporation in a merger or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(2) (a) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation, is
or was serving at the corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or
other enterprise. A director is considered to be serving an employee
benefit plan at the corporation's request if the director's duties to the
corporation include duties or services by him to the plan or to
participants in or beneficiaries of the plan.
(b) Director includes, unless the context requires otherwise, the
estate or personal representative of a director.
(3) "Expenses" include attorneys' fees.
(4) "Liability" means the obligation to pay a judgment, settlement,
penalty, or fine, including an excise tax assessed with respect to an
employee benefit plan, or to pay reasonable expenses incurred with
respect to a proceeding.
(5) (a) "Official capacity" means:
(i) when used with respect to a director, the office of director
in a corporation; or
(ii) when used with respect to an individual other than a
director, as contemplated in 35-1-457, the office in a
corporation held by the officer or the employment or agency
relationship undertaken by the employee or agent on behalf of the
corporation.
(b) Official capacity does not include service for any other
foreign or domestic corporation or any partnership, joint venture, trust,
employee benefit plan, or other enterprise.
(6) "Party" includes an individual who was, is, or is threatened to
be made a named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal.
35-1-452. Authority to indemnify.
(1) Except as provided in subsection (4), an individual made a party
to a proceeding because he is or was a director may be indemnified
against liability incurred in the proceeding if:
(a) he conducted himself in good faith;
(b) he reasonably believed:
(i) in the case of conduct in his official capacity with the
corporation, that his conduct was in the corporation's best
interests; and
(ii) in all other cases, that his conduct was at least not
opposed to the corporation's best interests; and
(c) in the case of any criminal procedure, he had no reasonable
cause to believe his conduct was unlawful.
(2) A director's conduct with respect to an employee benefit plan for
a purpose the director reasonably believed to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies
the requirement of subsection (1)(b)(ii).
(3) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, it not,
of itself, a determination that the director did not meet the standard of
conduct described in this section.
(4) A corporation may not indemnify a director under this section:
(a) in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
(b) in connection with any other proceeding charging improper
personal benefit to the director, whether or not involving action in
the director's official capacity, in which the director was adjudged
liable on the basis that personal benefit was improperly received by
the director.
(5) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.
35-1-453. Mandatory indemnification. Unless limited by its articles
of incorporation, a corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding
to which the director was a party because he is or was a director of the
corporation, against reasonable expenses incurred by the director in
connection with the proceeding.
35-1-454. Advance for expenses.
(1) A corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of final
disposition of the proceeding if:
(a) the director furnishes the corporation a written affirmation
of the director's good faith belief that the director has met the
standard of conduct described in 35-1-452;
(b) the director furnishes the corporation a written
undertaking, executed personally or on the director's behalf, to
repay the advance if it is ultimately determined that the director
did not meet the standard of conduct described in 35-1-452; and
(c) a determination is made that the facts then known to those
making the determination would not preclude indemnification under
35-1-451 through 35-1-459.
(2) The undertaking required by subsection (1)(b) must be an
unlimited general obligation of the director but need not be secured and
may be accepted without reference to financial ability to make repayment.
(3) Determinations and authorizations of payments under this section
must be made in the manner specified in 35-1-456.
35-1-455. Court-ordered indemnification. Unless a corporation's
articles of incorporation provide otherwise, a director of the
corporation who is a party to a proceeding may apply for indemnification
to the court conducting the proceeding or to another court of competent
jurisdiction. On receipt of an application, the court, after giving any
notice the court considers necessary, may order indemnification if it
determines that the director:
(1) is entitled to mandatory indemnification under 35-1-453, in which
case the court shall also order the corporation to pay the director's
reasonable expenses incurred in obtaining court-ordered indemnification;
or
(2) is fairly and reasonably entitled to indemnification in view of
all the relevant circumstances, whether or not the director met the
standard of conduct set forth in 35-1-452 or was adjudged liable as
described in 35-1-452(4). If the director was adjudged liable as
described in 35-1-452(4), the director's indemnification is limited to
reasonable expenses incurred.
35-1-456. Determination and authorization of indemnification.
(1) A corporation may not indemnify a director under 35-1-452 unless
authorized in the specific case after a determination has been made that
indemnification of the director is permissible in the circumstances
because the director has met the standard of conduct set forth in 35-1-
452.
(2) The determination must be made:
(a) by the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the
proceeding;
(b) if a quorum cannot be obtained under subsection (2)(a), by
majority vote of a committee designated by the board of
directors, in which designated directors who are parties may
participate, consisting solely of two or more directors not at
the time parties to the proceeding;
(c) by special legal counsel:
(i) selected by the board of directors or its committee in
the manner prescribed in subsection (2)(a) or (2)(b); or
(ii) if a quorum of the board of directors cannot be
obtained under subsection (2)(a) and a committee cannot be
designated under subsection (2)(b), selected by majority vote
of the full board of directors in which selected directors who
are parties may participate; or
(d) by the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding
may not be voted on the determination.
(3) Authorization of indemnification and evaluation as to
reasonableness of expenses must be made in the same manner as the
determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses must be
made by those entitled under subsection (2)(c) to select counsel.
35-1-457. Indemnification of officers, employees, and agents. Unless
a corporation's articles of incorporation provide otherwise:
(1) an officer of the corporation who is not a director is entitled
to mandatory indemnification under 35-1-453 and is entitled to apply for
court-ordered indemnification under 35-1-455 to the same extent as to a
director;
(2) the corporation may indemnify and advance expenses under 35-1-451
through 35-1-459 to an officer, employee, or agent of the corporation who
is not a director to the same extent as to a director; and
(3) a corporation may also indemnify and advance expenses to an
officer, employee, or agent who is not a director to the extent,
consistent with public policy, that may be provided by its articles of
incorporation, by-laws, general or specific action of its board of
directors, or contract.
* * * * * *
The by-laws of the Company further provide that the foregoing right of
indemnification shall not exclude or restrict any other rights or actions
which any director or officer may have, and shall be available whether or
not the director or officer continues to hold such office at the time of
incurring such expense or discharging Such liability.
The Company has insurance covering its expenditures which might arise
in connection with the lawful indemnification of its directors and
officers for their liabilities and expenses and insuring officers and
directors of the Company against certain other liabilities and expenses.
ITEM 16. EXHIBITS.
------------------
PREVIOUSLY FILED*
-------------------
WITH
FILE AS
EXHIBIT NUMBER EXHIBIT
-------- ------- --------
1(a) -- Form of Underwriting Agreement.
4(a) -- Trust Agreement relating to the Preferred
Securities
4(b) -- Form of Amended and Restated Trust
Agreement relating to the Preferred
Securities.
4(c) -- Form of Indenture relating to the Junior
Subordinated Debentures.
4(d) -- Form of Guarantee Agreement.
4(e) -- Form of Agreement as to Expenses and
Liabilities (Exhibit C to Exhibit 4(b)).
4(f) -- Form of Officers' Certificate establishing
Debentures (including the form of Junior
Subordinated Debenture as Exhibit A).
4(g) -- Form of Preferred Securities (Exhibit D to
Exhibit 4(b)).
5(a) -- Opinion of Michael E. Zimmerman, Esq.,
General Counsel for the Company.
5(b)
and 8 -- Opinion of Reid & Priest LLP, of counsel to
the Company.
5(c) -- Opinion of Richards, Layton & Finger,
Special Delaware Counsel to the Company and
Montana Power Capital.
12(a) -- Computation of Ratio of Earnings to Fixed
Charges of the Company.
23(a) -- Independent Auditors' Consent (See page II-
8).
23(b) -- Consents of Michael E. Zimmerman, Esq.,
Reid & Priest LLP and Richards, Layton &
Finger are contained in Exhibits 5(a), 5(b)
and 5(c), respectively.
24 -- Power of Attorney (see page II-6).
25(a) -- Statement on Form T-1 of The Bank of New
York relating to Amended and Restated Trust
Agreement.
25(b) -- Statement on Form T-1 of The Bank of New
York relating to Indenture.
25(c) -- Statement on Form T-1 of The Bank of New
York relating to Guarantee Agreement.
-------------------------------------
*Incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
Each undersigned registrant hereby undertakes:
(1) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating
to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(2) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(3) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(4) That, insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions
described under Item 15 above, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE>
POWER OF ATTORNEY
Each director and/or officer of the registrants whose signature
appears below hereby appoints the Agents for Service named in this
registration statement, and each of them severally, as his or her
attorney-in-fact to sign in his or her name and behalf, in any and all
capacities stated below, and to file with the Securities and Exchange
Commission, any and all amendments, including post-effective amendments,
to this registration statement, and any registration statement of the
registrant relating to the Preferred Securities, Guarantee or Junior
Subordinated Debentures filed after the date hereof pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and the registrants
hereby also appoint each such Agent for Service as their attorney-in-fact
with like authority to sign and file any such amendments or registration
statement in their names and on their behalf.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Municipality of Butte-
Silver Bow, and State of Montana, on the 16th day of October, 1996.
THE MONTANA POWER COMPANY
By: /s/ D. T. Berube
------------------------------
(D. T. Berube, Chairman of the
Board and Chief Executive
Officer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in
the capacities and on the date indicated.
Signature Title Date
--------- ------ -----
/s/ D. T. Berube Chairman of the October 16, 1996
--------------------------------- Board, Chief
D. T. Berube Executive Officer
(Principal Executive Officer) and Director
/s/ J. P. Pederson Vice President and October 16, 1996
--------------------------------- Chief Financial
J. P. Pederson and Information
(Principal Financial and Officer
Accounting Officer) and Director
/s/ T. H. Adams Director October 16, 1996
--------------------------------
T. H. Adams
/s/ A. F. Cain Director October 16, 1996
--------------------------------
A. F. Cain
/s/ R. D. Corette Director October 16, 1996
---------------------------------
R. D. Corette
/s/ K. Foster Director October 16, 1996
---------------------------------
K. Foster
/s/ R. P. Gannon Director October 16, 1996
---------------------------------
R. P. Gannon
/s/ B. D. Harris Director October 16, 1996
---------------------------------
B. D. Harris
/s/ C. T. Hibbard Director October 16, 1996
---------------------------------
C. T. Hibbard
/s/ D. P. Lambros Director October 16, 1996
---------------------------------
D. P. Lambros
/s/ J. R. Jester Director October 16, 1996
---------------------------------
J. R. Jester
/s/ C. Lehrkind, III Director October 16, 1996
---------------------------------
C. Lehrkind, III
/s/ J. P. Lucas Director October 16, 1996
---------------------------------
J. P. Lucas
/s/ A. K. Neill Director October 16, 1996
---------------------------------
A. K. Neill
/s/ G. H. Selover Director October 16, 1996
---------------------------------
G. H. Selover
/s/ N. E. Vosburg Director October 16, 1996
---------------------------------
N. E. Vosburg
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED
THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE MUNICIPALITY OF BUTTE-
SILVER BOW, AND STATE OF MONTANA, ON THE 16TH DAY OF OCTOBER, 1996.
MONTANA POWER CAPITAL I
By:/s/ Ellen M. Senechal
-----------------------
Ellen M. Senechal, not in her
individual capacity but solely
as Trustee
<PAGE>
EXHIBIT 23 (A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our
report dated February 9, 1996 appearing on page 50 of The Montana Power
Company's Annual Report on Form 10-K for the year ended December 31,
1995. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
/s/ Price Waterhouse LLP
--------------------------
Price Waterhouse LLP
Portland, Oregon
October 16, 1996
<PAGE>
EXHIBIT INDEX
----------------
1(a) -- Form of Underwriting Agreement.
4(a) -- Trust Agreement relating to the Preferred
Securities
4(b) -- Form of Amended and Restated Trust Agreement
relating to the Preferred Securities.
4(c) -- Form of Indenture relating to the Junior
Subordinated Debentures.
4(d) -- Form of Guarantee Agreement.
4(f) -- Form of Officers' Certificate establishing
Debentures (including the form of Junior
Subordinated Debenture as Exhibit A).
5(a) -- Opinion of Michael E. Zimmerman, Esq., General
Counsel for the Company.
5(b)
and 8 -- Opinion of Reid & Priest LLP, of counsel to the
Company.
5(c) -- Opinion of Richards, Layton & Finger, Special
Delaware Counsel to the Company and Montana Power
Capital.
12(a) -- Computation of Ratio of Earnings to Fixed Charges
of the Company.
25(a) -- Statement on Form T-1 of The Bank of New York
relating to Amended and Restated Trust Agreement.
25(b) -- Statement on Form T-1 of The Bank of New York
relating to Indenture.
25(c) -- Statement on Form T-1 of The Bank of New York
relating to Guarantee Agreement.
EXHIBIT 1(a)
MONTANA POWER CAPITAL I
Cumulative Quarterly Income Preferred Securities, Series A (QUIPSsm)*[FN]
[FN]
* QUIPS is a service mark of Goldman, Sachs & Co.
[TXT]
UNDERWRITING AGREEMENT
----------------------
Dated: As set forth on
Schedule I hereto
To the Representatives named on the
signature page hereof of the several
Underwriters named on Schedule I hereto.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Ladies and Gentlemen:
The Montana Power Company, a Montana corporation (the "Company"),
and its financing subsidiary, Montana Power Capital I, a Delaware business
trust (the "Trust", and, hereinafter, together with the Company, the
"Offerors"), propose that the Trust issue and sell severally to the several
underwriters named on Schedule I hereto (the "Underwriters"), the Trust's
Cumulative Quarterly Income Preferred Securities, with the terms and in the
liquidation preference amount specified in Schedule I hereto (the
"Preferred Securities"), and hereby confirms its agreement with the several
Underwriters as follows:
1. Description of Preferred Securities. The Offerors propose
-----------------------------------
that the Trust issue the Preferred Securities pursuant to an Amended and
Restated Trust Agreement, among The Bank of New York, as Property Trustee,
The Bank of New York (Delaware) as Delaware Trustee and three employees of
the Company as Administrative Trustees, in substantially the form
heretofore delivered to you, said Agreement being hereinafter referred to
as the "Trust Agreement". In connection with the issuance of the Preferred
Securities, the Company proposes (i) to issue its Junior Subordinated
Deferrable Interest Debentures (the "Debentures") pursuant to an Indenture,
dated as of ________ 1, 1996, between the Company and The Bank of New York,
as trustee (the "Indenture") and (ii) to guarantee the Preferred Securities
pursuant a Guarantee Agreement between the Company and The Bank of New
York, as guarantee trustee (the "Guarantee"), to the extent described
therein.
2. Representations and Warranties of the Offerors. The Offerors
----------------------------------------------
represent, warrant and agree that:
(a) The Company and each of its principal subsidiaries (i.e.,
---
Entech, Inc., Western Energy Company, Northwestern Resources Company, North
American Resources Company and Continental Energy Services, Inc.) (the
"Subsidiaries") have been duly incorporated and are validly existing as
corporations in good standing under the laws of the respective
jurisdictions of their incorporation with full corporate power and
authority to own and operate their properties and to conduct the businesses
in which they are now engaged, as described in the Prospectus referred to
below; the Company and its Subsidiaries are duly qualified to do business
as foreign corporations and are in good standing in all other jurisdictions
in the United States and in Canada in which such qualification is required;
and all of the outstanding shares of capital stock of each Subsidiary are
owned beneficially by the Company, subject to no mortgage, pledge, lien,
charge or other encumbrance.
(b) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Delaware Business Trust
Act with the power and authority (trust and other) to own its property and
conduct its business as described in the Registration Statement and
Prospectus, to issue and sell the common securities (the "Common
Securities") and Preferred Securities (collectively, the "Trust
Securities"), and to enter into and perform its obligations under this
Agreement and the Trust Securities and to consummate the transactions
herein contemplated; the Trust has no subsidiaries and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or the ownership of its property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Trust;
the Trust has conducted and will conduct no business other than the
transactions contemplated by this Agreement and described in the
Prospectus; the Trust is not a party to or bound by any agreement or
instrument other than this Agreement, the Trust Agreement and the
agreements and instruments contemplated by the Trust Agreement and
described in the Prospectus; the Trust has no liabilities or obligations
other than those arising out of the transactions contemplated by this
Agreement and the Trust Agreement and described in the Prospectus; the
Trust is not a party to or subject to any action, suit or proceeding of any
nature; the Trust is not, and at the Date of Delivery (as hereinafter
defined) will not be, classified as an association taxable as a corporation
for United States federal income tax purposes; and the Trust is, and as of
the Date of Delivery will be, treated as a consolidated subsidiary of the
Company pursuant to generally accepted accounting principles.
(c) A registration statement on Form S-3 as described on Schedule
I hereto with respect to the Preferred Securities, a like amount of
Debentures and the Guarantee (the "Registered Securities") including a
prospectus, has been prepared by the Offerors 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") thereunder, has been filed with the
Commission under the Act and has become effective, and, to the knowledge of
the Company, no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission. Copies of said
registration statement have heretofore been delivered to you, as
Representatives. Such registration statement, including all exhibits
thereto, in the form in which it is presently effective, is referred to
hereinafter as the "Registration Statement". The prospectus constituting a
part of the Registration Statement, as it shall be completed pursuant to
Rule 430A under the Act and filed with the Commission pursuant to Rule
424(b) under the Act, is referred to hereinafter as the "Prospectus". The
prospectus subject to completion in the form included in the registration
statement at the time of the initial filing of the registration statement,
and as such prospectus shall have been amended or supplemented from time to
time prior to the date of the Prospectus, is hereinafter referred to as the
"Prepricing Prospectus". Any reference in this Agreement to the
Registration Statement, any Prepricing Prospectus or the Prospectus shall
be deemed to refer to and include all documents incorporated therein by
reference (the "Incorporated Documents"). In the event of any amendment to
the Registration Statement after the date hereof pursuant to the provisions
of Paragraph 3 or Paragraph 5 hereof, the term "Registration Statement"
also shall mean such Registration Statement as so amended. In the event of
any amendment or supplement to the Prospectus pursuant to the provisions of
Paragraph 3 or Paragraph 5 hereof, the term "Prospectus" also shall mean
such Prospectus as so amended or supplemented.
(d) When the Registration Statement became effective and at the
time of each amendment thereof, if any, the Registration Statement
contained, and on the date hereof, the Registration Statement contains, all
statements which are required to be stated therein in accordance with, and
did and does in all material respects conform with the requirements of, the
Act and the Rules and Regulations and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the Registration Statement, at the
time at which it became effective and at the time of each amendment
thereof, if any, did not and, on the date hereof, does not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading. The Prepricing Prospectus, on the date the Registration
Statement was initially filed and as of the date of any amendment or
supplement prior to the date hereof, in all material respects conformed,
and the Prospectus, on the date on which it shall be filed with the
Commission pursuant to Rule 424(b) under the Act and as of the date of any
supplement thereto, in all material respects will conform with the
requirements of the Act and the Rules and Regulations, and on such dates
any Prepricing Prospectus did not and the Prospectus will not include any
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 were made, not
misleading; provided, however, that the Offerors make no representations or
warranties as to information contained in or omitted from any Prepricing
Prospectus or the Prospectus in reliance upon written information furnished
to the Offerors by, or on behalf of any Underwriter through, you expressly
for use in the preparation thereof. The Incorporated Documents conformed
on the date of filing or on the date of any amendment thereof in all
material respects to the requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules and regulations of the
Commission thereunder.
(e) Subsequent to the respective dates as of which information is
given in the Registration Statement, except as contemplated in the
Prospectus, (i) neither of the Offerors nor any of the Subsidiaries has
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions not in the ordinary course of
business, (ii) there has not been any material change in the capital stock
or long-term debt of the Company or any of the Subsidiaries, or any
material adverse change in the condition (financial or other) of the
Company or any of the Subsidiaries, (iii) no material loss or damage
(whether or not insured) to the property of the Company or any of the
Subsidiaries has been sustained, and (iv) no material legal or governmental
proceeding, domestic or foreign, affecting the Company or any of the
Subsidiaries or the transactions contemplated by this Agreement, has been
instituted or, to the knowledge of the Company, threatened. For purposes
of determining materiality under this subparagraph 2(e), the Company and
the Subsidiaries shall be considered as one enterprise.
(f) Price Waterhouse, which have certified the financial
statements filed with the Commission as a part of the Registration
Statement, are independent public accountants as required by the Act and
the Rules and Regulations.
(g)(i) The consolidated balance sheets as of December 31, 1995
and 1994 and the consolidated statements of income, cash flows and common
shareholders' equity for each of the three years in the period ended
December 31, 1995, incorporated by reference in the Prospectus, present
fairly, in all material respects, the financial position of the Company and
its Subsidiaries at December 31, 1995 and 1994, and the consolidated
results of their operations and cash flows for each of the three years in
the period ended December 31, 1995, in conformity with generally accepted
accounting principles, and (ii) the interim financial information as of
March 31 and June 30, 1996, incorporated by reference in the Prospectus,
has been prepared on a basis substantially consistent with that of the
consolidated financial statements referred to above and in conformity with
generally accepted accounting principles.
(h) The Company has filed with the Public Service Commission of
Montana ("MPSC") an application (the "Application") seeking an appropriate
order or orders and the MPSC has issued its order authorizing the issuance
and sale of the Debentures, the issuance of the Guarantee and related
matters; no other authorization, approval, consent, registration or
qualification or other order of any state or Federal governmental authority
or agency is required for the valid authorization, issuance or sale of the
Debentures or the Preferred Securities, or the issuance of the Guarantee
except such as have been obtained under the Act or as may be required under
state securities laws in connection with the purchase and distribution of
the Preferred Securities by the Underwriters.
(i) The Preferred Securities have been duly and validly
authorized and, when the Preferred Securities shall have been issued and
delivered pursuant to this Agreement, the Preferred Securities will have
been duly and validly issued and will be fully paid and non-assessable
undivided beneficial interests in the assets of the Trust, entitled to the
benefits of the Trust Agreement and will conform to the description thereof
contained in the Prospectus; holders of the Preferred Securities 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; the issuance of the Preferred
Securities is not subject to preemptive or similar rights.
(j) The Common Securities have been duly and validly authorized,
and, when the Common Securities shall have been issued and delivered to the
Company pursuant to this Agreement, the Common Securities will have been
duly and validly issued and will be fully paid and non-assessable undivided
beneficial interests in the assets of the Trust, entitled to the benefits
of the Trust Agreement, and will conform to the description thereof
contained in the Prospectus; the issuance of the Common Securities is not
subject to preemptive or other similar rights; on the Date of Delivery, all
of the issued and outstanding Common Securities of the Trust will be
directly owned by the Company, free and clear of all liens, encumbrances,
equities or claims.
(k) The Debentures have been duly and validly authorized, and,
when duly and validly executed, authenticated and issued as provided in the
Indenture and delivered pursuant to this Agreement, will constitute valid
and legally binding obligations of the Company entitled to the benefits of
the Indenture and will conform to the description thereof contained in the
Prospectus.
(l) Each of the Indenture, the Trust Agreement, the Guarantee and
the Agreement as to Expenses and Liabilities (the "Expense Agreement") has
been duly authorized by the Company, and, when executed and delivered by
the Company on the Date of Delivery, each such agreement will constitute a
valid and legally binding obligation of the Company and will be enforceable
against the Company in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and other
laws affecting the rights and remedies of creditors generally and of
general principles of equity; each of the Indenture, the Trust Agreement
and the Guarantee has been duly qualified under the Trust Indenture Act and
will conform to the description thereof contained in the Prospectus.
(m) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
(n) The performance of this Agreement and the consummation of the
transactions contemplated herein will not result in a breach or violation
of any of the terms or provisions of, or constitute a default under, the
Company's Articles or by-laws, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party, or by which
it or any of its property is bound, or any order, rule or regulation
applicable to the Company or any of its Subsidiaries of any court or of any
Federal or state regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or its property.
(o) Neither of the Offerors is 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 (the "Investment Company
Act"). This Agreement has been duly authorized, executed and delivered by
each of the Offerors.
(p) Ellen M. Senechal, __________ and ____________, in their
capacities as administrative trustees of the Trust, are employees of the
Company and have been duly authorized by the Company to execute and deliver
the Trust Agreement.
3. Purchase, Sale and Delivery of Preferred Securities; Substitution
-----------------------------------------------------------------
of Underwriters.
---------------
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth,
(i) the Trust shall sell to each of the Underwriters, and each Underwriter
shall purchase from the Trust, at the time and place herein specified,
severally and not jointly, the respective liquidation preference amount of
the Preferred Securities set forth opposite the name of such Underwriter in
Schedule I attached hereto, at the purchase price or prices set forth in
Schedule I hereto, and (ii) the Company shall pay to the Underwriters a
commission in the amount set forth in Schedule I hereto.
(b) If on the Date of Delivery, any Underwriter shall fail to
purchase the liquidation preference amount of Preferred Securities to be
purchased by it in accordance with the terms hereof, and the aggregate
liquidation preference amount of Preferred Securities which all such
defaulting Underwriters so fail to purchase does not exceed one-eleventh of
the total liquidation preference amount of Preferred Securities set forth
on Schedule I hereto, the remaining Underwriters shall be obligated
severally (in proportion to their respective commitments hereunder except
as may otherwise be determined by you) to purchase the liquidation
preference amount of Preferred Securities which such defaulting Underwriter
or Underwriters agreed but failed to purchase.
(c) If any Underwriter or Underwriters shall so fail to purchase
such liquidation preference amount of Preferred Securities and the
aggregate liquidation preference amount of Preferred Securities with
respect to which such failure or failures occur is more than one-eleventh
of the total liquidation preference amount of Preferred Securities set
forth in Schedule I hereto, the remaining Underwriters shall have the
right, but shall not be obligated, to take up and pay for (in such
proportions as shall be determined by you) the liquidation preference
amount of Preferred Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase. In the event that such
remaining Underwriters do not on or before the Date of Delivery agree to
take up and pay for such liquidation preference amount of Preferred
Securities, they shall have the privilege, within 24 hours after such date
of substituting another underwriter or underwriters satisfactory to the
Company who will agree to take up and pay for such liquidation preference
amount of Preferred Securities on the postponed Date of Delivery
(determined as provided in Paragraph 3(d)). If the remaining Underwriters
shall not have so agreed to take up and pay for such liquidation preference
amount of Preferred Securities and shall not have so substituted another
underwriter or underwriters, upon termination of such 24 hour period, the
Company may during a further period of 24 hours find another underwriter or
underwriters, satisfactory to the Representatives, to purchase such
liquidation preference amount of Preferred Securities. In case the
remaining Underwriters shall not have agreed to take up and pay for such
liquidation preference amount of Preferred Securities, and another
underwriter or underwriters shall not have been substituted as aforesaid,
then this Agreement shall terminate. In the event of any such termination,
the Company shall not be under any liability to any Underwriter (except for
the costs and expenses to be paid or reimbursed by the Company pursuant to
Paragraph 5(g) and except for any liability under Paragraph 8) nor shall
any non-defaulting Underwriter be under any liability to the Company
(except for any liability under Paragraph 8).
(d) If the remaining Underwriters shall agree to take up and pay
for such liquidation preference amount of Preferred Securities, or another
underwriter or underwriters shall be substituted, as aforesaid, (i) the
Representatives or the Company shall have the right to fix as a postponed
Date of Delivery a date not exceeding seven full business days after the
Date of Delivery, and (ii) the respective number of shares of the
liquidation preference amount of Preferred Securities to be purchased by
the remaining Underwriters or substituted underwriters shall be taken as
the basis of their respective underwriting obligations for all purposes of
this Agreement. Before any such postponed Date of Delivery, any changes
which in the opinion of counsel to the Company or of counsel to the
Underwriters may be necessary in the Registration Statement or Prospectus
or in any other documents or arrangements by reason of such withdrawal or
default of any Underwriter shall be effected.
(e) Nothing herein contained shall relieve any defaulting
Underwriter from liability for its default hereunder.
Payment for the Preferred Securities shall be made at the office of
Reid & Priest LLP, 40 West 57th Street, New York, N.Y. and delivery of the
Preferred Securities shall be made in New York, New York through the
facilities of The Depository Trust Company, at 10:00 A.M., New York Time,
on the date set forth on Schedule I hereto (or if The New York Stock
Exchange and commercial banks in The City of New York are not open on such
day, the next day on which such Exchange and banks are open), or at such
other place, time and date as you and the Company may agree in writing,
such time and date for delivery and payment being herein referred to as the
"Date of Delivery". On the Date of Delivery, the Company shall deliver the
Preferred Securities to you as Representatives, for the account of each
Underwriter, against payment to the Company of the purchase price of the
Preferred Securities, by wire transfer in immediately available funds.
Time shall be of the essence and delivery as set forth above is a further
condition of the obligations of each Underwriter and of the Company.
Preferred Securities so delivered shall be registered in the name of Cede &
Co., as nominee of The Depository Trust Company.
The Company agrees to make the Preferred Securities available to you
for the purpose of expediting their checking and packaging on behalf of the
Underwriters, at the office at which they are to be delivered, not later
than 2:00 P.M., on the business day next preceding the Date of Delivery.
It is understood that you, individually and not as Representatives of
the several Underwriters, may (but shall not be obligated to) make payment
to the Company, on behalf of any Underwriter, for the Preferred Securities
to be purchased by such Underwriter. Any such payment by you shall not
relieve any such Underwriter of any of its obligations hereunder.
4. Offering by Underwriters. The several Underwriters propose to
------------------------
offer the Preferred Securities for sale as set forth in the Prospectus.
5. Covenants of the Offerors. The Offerors, jointly and severally,
-------------------------
covenant and agree with the several Underwriters that:
(a) The Offerors will not file any amendment to the Registration
Statement or supplement to the Prospectus of which you have not been
advised and furnished with a copy, or to which you have reasonably objected
in writing.
(b) The Offerors will advise you promptly of any request of the
Commission for an amendment to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information and of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the institution of any proceedings for
that purpose, and the Offerors will use best efforts to prevent the
issuance of any such stop order or to obtain as soon as possible the
lifting thereof, if issued. The Offerors will advise you promptly of any
order or communication of any public authority addressed to the Offerors
suspending or threatening to suspend qualification of the Preferred
Securities for sale in any jurisdiction.
(c) If at any time when, to the knowledge of either of the
Offerors, a prospectus relating to the Preferred Securities is required to
be delivered under the Act, any event occurs 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
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, the Offerors will promptly notify you
thereof and, if such event occurs within nine months after the effective
date of the Registration Statement, the Offerors will at the cost and
expense of the Company amend or supplement the Prospectus in order to
correct such statement or omission and in order that the Prospectus as so
amended or supplemented will comply with the requirements of Section
10(a)(1) of the Act. In case any Underwriter is required to deliver a
prospectus relating to the Preferred Securities more than nine months after
the date of this Agreement, the Offerors will, at the expense of the
Underwriter requesting the same, prepare promptly such prospectus or
prospectuses and thereafter amend or supplement the same as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of
the Act.
(d) As soon as practicable, the Company will make generally
available to its security holders an earnings statement covering a period
of at least 12 months beginning after the date of this Agreement which
shall satisfy the provisions of Section 11(a) of the Act.
(e) The Offerors will cooperate with the Underwriters in
connection with (i) the qualification of the Registered Securities for sale
under the securities laws of such jurisdictions as the Representatives may
reasonably designate and the continuance of such qualifications in effect
so long as required for the distribution of the Preferred Securities,
provided that neither of the Offerors shall be required to qualify as a
foreign corporation in any jurisdiction or to give a general consent to the
service of process or to submit to any requirements which it deems unduly
burdensome, and (ii) the determination of the eligibility of the Registered
Securities for investment by savings banks, trustees and insurance
companies under the laws of such jurisdictions as the Representatives may
reasonably designate.
(f) For a period of five years from the date of this Agreement,
the Company will, upon request, deliver to you and to each of the other
Underwriters (i) as soon as practicable after the end of each fiscal year,
the consolidated financial statements of the Company and its subsidiaries
as at the end of and for such year, all in reasonable detail and certified
by independent public accountants, (ii) as soon as practicable after the
end of each quarterly fiscal period (except for the last quarterly fiscal
period of each fiscal year) such consolidated financial statements as at
the end of and for such period, all in reasonable detail, (iii) as soon as
available, a copy of each report of the Company mailed to stockholders, and
(iv) from time to time such other information concerning the Company as you
may reasonably request. For such period the Company will deliver to you,
upon request, as soon as available, a copy of each report of the Company
filed publicly with the Commission.
(g) Whether or not the transactions contemplated hereunder are
consummated or this Agreement becomes effective or is terminated, the
Company will pay, or reimburse the Underwriters on demand for, all costs
and expenses incident to the performance of the Offerors' obligations under
this Agreement, including all expenses incident to the preparation,
execution and delivery of the trust agreements with respect to the Trust,
the Indenture, the Guarantee, the Expense Agreement and the authorization
of the Preferred Securities and their issue and delivery by the Trust, any
necessary stamp taxes in connection with the foregoing, the fees and
expenses of the Offerors' counsel and accountants, any fee of a rating
agency incurred by the Representatives, with the Company's consent, in
connection with securing a rating of the Preferred Securities, and the
costs and expenses incident to the preparation, printing and filing under
the Act of the Registration Statement, each Prepricing Prospectus, the
Prospectus and this Agreement and the listing of the Preferred Securities
and, if applicable, the Debentures on The New York Stock Exchange ("NYSE")
and the registration thereof under the Securities and Exchange Act of 1934
as amended (the "Exchange Act"), and the Company will pay, or reimburse all
nondefaulting Underwriters, on demand, for, all fees and disbursements
(including fees and disbursements of counsel) incurred by the Offerors or
the Underwriters in connection with the qualification of the Registered
Securities for sale under state securities laws, the determination of the
eligibility of the Registered Securities for investment under the laws of
such jurisdictions as the Representatives may reasonably designate and the
preparation of "Blue Sky" memoranda in an amount not exceeding $7,500, and
the cost of furnishing to the Underwriters copies of "Blue Sky" memoranda,
the Registration Statement, each Prepricing Prospectus and the Prospectus
and (subject to the provisions of clause (c) of this Paragraph 5) each
amended and supplemented prospectus and each prospectus prepared to permit
compliance with Section 10(a)(3) of the Act. The Company shall not,
however, be required to pay for any of the Representatives' expenses or
those of any of the other Underwriters other than as hereinabove set forth;
provided that, if this Agreement shall not be consummated because
terminated by the Representatives pursuant to either Paragraph 6 or clause
(c) of the first paragraph of Paragraph 7, or by reason of any failure,
refusal or inability on the part of the Offerors to perform any undertaking
or satisfy any condition of this Agreement or to comply with any of the
terms hereof on its part to be performed, unless such failure to satisfy
said condition or to comply with said terms be due to the default or
omission of any Underwriter, then and in any such case the Company shall
reimburse the Underwriters a maximum of $40,000 to cover all reasonable
out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred in connection with marketing the Preferred Securities
or in contemplation of performing their obligations hereunder; but the
Company shall not in any event be liable to any of the Underwriters for
damages on account of loss of anticipated profits from the sale by them of
the Preferred Securities.
(h) The Offerors will apply the net proceeds from the sale of the
Preferred Securities for the purposes set forth in the Prospectus.
(i) The Offerors will deliver to each Representative (up to a
maximum of three) as promptly as practicable a signed copy of the
Registration Statement and all amendments thereto including all exhibits
filed therewith and signed consents, certificates and opinions of
accountants and of any other persons named in the Registration Statement as
having prepared, certified or reviewed any part thereof, and will deliver
to the Representatives such number of unsigned copies of the Registration
Statement, without exhibits, and of all amendments thereto, as the
Representatives may reasonably request. The Offerors will deliver to the
Representatives, from time to time, as many copies of each Prepricing
Prospectus and the Prospectus, as from time to time amended or
supplemented, as the Representatives may reasonably request.
(j) Each of the Offerors will not offer, sell, contract to sell
or otherwise dispose of any Preferred Securities, any other beneficial
interests in the assets of the Trust, or any other securities of the Trust
or the Company that are substantially similar to the Preferred Securities,
including any guarantee of any such beneficial interests or substantially
similar securities, or any securities convertible into or exchangeable for
or that represent the right to receive any such beneficial interest or
substantially similar securities, without the consent of the
Representatives until the earlier to occur of (i) thirty (30) days after
the Date of Delivery and (ii) the date of the termination of the trading
restrictions on the Preferred Securities, as determined by the
Underwriters. The Representatives agree to notify the Offerors of such
termination if it occurs prior to the Date of Delivery.
(k) The Offerors will use their best efforts to cause the
Preferred Securities to be duly authorized for listing on the NYSE, subject
to notice of issuance, and to be registered under the Exchange Act; if the
Preferred Securities are exchanged for Debentures, the Company will use its
best efforts to have the Debentures listed on the exchange or other
organization on which the Preferred Securities are then listed, and to have
the Debentures registered under the Exchange Act.
6. Conditions of the Obligations of the Underwriters. The respective
-------------------------------------------------
obligations of the several Underwriters hereunder shall be subject to the
accuracy of, and compliance with, at and as of the Date of Delivery, the
representations, warranties and agreements of the Offerors herein contained
and to the following additional terms and conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued at or before the Date of
Delivery and no proceeding for that purpose shall prior to that time have
been initiated or, to the knowledge of the Company, threatened by the
Commission; any request for additional information on the part of the
Commission to be included in the Registration Statement or the Prospectus
or otherwise) shall have been complied with to the reasonable satisfaction
of Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters
("Underwriters' Counsel"); and no amendment to the Registration Statement
or supplement to the Prospectus shall have been filed hereafter to which
you shall have reasonably objected, in writing, after having received
reasonable notice.
(b) Prior to the Date of Delivery, there shall have been issued,
and at the Date of Delivery there shall be in full force and effect, an
appropriate order or orders of the Public Service Commission of Montana
(the "Order") permitting the issuance and sale of the Debentures and the
undertaking of the Company of the Guarantee on the terms and conditions
herein set forth or contemplated hereby, and containing no provision
reasonably unacceptable to the Representatives (it being understood that no
such Order in effect on the date of this Agreement contains any such
unacceptable provision).
(c) On the Date of Delivery, you shall have received the opinion
of Michael E. Zimmerman, Esq., General Counsel for the Company, dated as of
such date, to the effect that:
(i) The Company and the Subsidiaries have been duly
incorporated and are validly existing as corporations in good
standing under the laws of the respective jurisdictions of their
incorporation, with full corporate power and authority to own and
operate their properties and conduct the businesses in which they
are now engaged as described in the Prospectus; the Company and
the Subsidiaries are duly qualified to do business as foreign
corporations and are in good standing in all other jurisdictions
in the United States and in Canada in which such qualification is
required; and all of the outstanding shares of capital stock of
each Subsidiary are owned beneficially by the Company, subject to
no mortgage, pledge, lien, charge or other encumbrance;
(ii) The Company and the Subsidiaries have valid and
subsisting franchise rights, licenses, permits, and other
authorizations, free from any restrictions or conditions which are
unusual or unduly burdensome, sufficient for the ownership of
their properties and the conduct of the businesses in which they
are now engaged as described in the Prospectus;
(iii) The Registration Statement has become effective under
the Act, and, to the best of the knowledge of such counsel, no
stop order suspending the effectiveness thereof has been issued
and no proceeding for that purpose has been initiated or
threatened by the Commission; the Registration Statement and the
Prospectus (excluding the Incorporated Documents) comply as to
form in all material respects with the requirements of the Act and
the Rules and Regulations (except that such counsel need express
no opinion as to the financial statements and other financial or
statistical data contained therein); and the Incorporated
Documents as of their respective dates of filing and amendment
complied as to form (except as aforesaid) in all material respects
with the requirements of the Exchange Act and the rules and reg-
ulations issued thereunder;
(iv) Each of the Indenture, the Trust Agreement and the
Guarantee has been duly qualified under the Trust Indenture Act,
has been duly authorized, executed and delivered by the Company,
and is a valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium
and other laws affecting the rights and remedies of creditors
generally and of general principles of equity;
(v) The Debentures have been duly authorized, executed and
delivered by the Company, are entitled to the benefits of the
Indenture and are legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their
terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting
the rights and remedies of creditors generally and of general
principles of equity;
(vi) The Expense Agreement has been duly authorized, executed
and delivered by the Company, and is a valid and legally binding
obligation of the Company enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting
the rights and remedies of creditors generally and of general
principles of equity;
(vii) The Order, to the best of the knowledge of such counsel,
is in full force and effect, and authorizes the issuance and sale
of the Debentures and the undertaking of the Company of the
Guarantee in conformity with this Agreement; no other
authorization, approval, consent, registration, qualification or
other order of or with any governmental authority is required for
the authorization of the issuance or sale of the Debentures and
the undertaking of the Company of the Guarantee in conformity with
the Order by the Company pursuant to the terms of this Agreement,
except such as have been obtained under the Act or as may be
required under state securities laws in connection with the
purchase and distribution of the interests in the Debentures and
the Guarantee by the Underwriters; and the Company is not a
"holding company" or a "subsidiary company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of
1935 as amended;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) The performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach
of any of the terms or provisions of, or constitute a default
under, the Company's charter or bylaws, or any indenture,
mortgage, deed of trust or other agreement or instrument known to
such counsel to which the Company is a party or by which it or any
of its property is bound, or any order, rule or regulation known
to such counsel applicable to the Company of any court or of any
governmental agency or body having jurisdiction over the Company
or its property; and
(x) All of the issued and outstanding Common Securities are
owned of record by the Company free and clear of any lien.
(xi) Neither of the Offerors is an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act.
(xii) The opinions, if any, of local counsel relied on in
giving the foregoing opinions (1) are satisfactory in form and
scope to such counsel and (2) you are justified in relying
thereon.
In addition, such counsel shall advise that (1) he has no reason to
believe that the Registration Statement contains any untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or the
Prospectus (including the Incorporated Documents) contains any untrue
statement of a material fact or omits 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; (2) the
statements made in the Registration Statement and the Prospectus under the
captions "Description of the Preferred Securities," "Description of the
Junior Subordinated Debentures," "Description of the Guarantee," and
"Relationship Among the Preferred Securities, the Junior Subordinated
Debentures and the Guarantee" have been reviewed by such counsel and,
insofar as they purport to constitute summaries of the documents referred
to therein, constitute accurate summaries of the terms of such documents;
and (3) he does not know of any legal or governmental proceeding required
to be described in the Prospectus which is not described as required, nor
of any contract or document of a character required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required;
provided, however, that such opinion may (a) state that, insofar as the
advice required by clause (l) in this paragraph depends upon the accuracy
of the Registration Statement and Prospectus, it is based upon a general
review with the Company's representatives and independent accountants of
the information contained in the Registration Statement and Prospectus,
without independent verification by such counsel of the accuracy or
completeness of such information, (b) insofar as such opinion relates to
matters of law of the States of Idaho, New York, Texas and Wyoming, of the
Province of Alberta and of Canada, rely upon opinions, if any, addressed to
you and satisfactory in form and scope to you and Underwriters' Counsel, of
local counsel, and (c) state that no examination of the certificates
representing the Debentures, except a specimen thereof, has been made and
that reliance has been placed upon certificates of the transfer agent and
registrar for the Debentures as to the issuance and registration thereof.
(d) On the Date of Delivery, you shall have received from Reid &
Priest LLP, Special Counsel to the Company, an opinion in form and
substance satisfactory to you, dated as of said date, to the same effect as
set forth in clauses (i) (as to the Company and the State of Montana only),
(iii), (iv), (v), (vi), (vii), (viii), (ix) (as to the Charter, the
by-laws, the Company's Mortgage and Deed of Trust dated as of October 1,
1945, and the 1973 Debenture Agreement only) (xi) and (xii) (as to
subclause (l) only) of subparagraph (c) above, to the effect that 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 covering such other matters
incident to the transactions contemplated hereby as you or your counsel may
reasonably request. Said opinion shall also include the additional advice
(clause (1) only) required by the second paragraph of said subparagraph
(c). In rendering such opinion, said special counsel may rely upon the
opinion of Michael E. Zimmerman, Esq., or the opinions delivered pursuant
to or referred to in the second paragraph of subparagraph (c) above with
respect to matters of law of the States of Idaho, Montana and Wyoming and
such opinion may also incorporate the matters permitted by the proviso
contained in the second paragraph of said subparagraph (c).
(e) On the Date of Delivery, you shall have received the opinion
of Richards, Layton and Finger, Special Delaware Counsel to the Offerors,
dated as of such date, to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business
Trust Act and, under the Trust Agreement and the Delaware Business
Trust Act, has the trust power and authority to conduct its
business as described in the Prospectus.
(ii) The Trust Agreement is a legal, valid and binding
agreement of the Company and the Trustees, and is enforceable
against the Company and the Trustees, in accordance with its
terms.
(iii) Under the Trust Agreement and the Delaware Business
Trust Act, the execution and delivery of the Underwriting
Agreement by the Trust, and the performance by the Trust of its
obligations thereunder, have been duly authorized by all requisite
trust action on the part of the Trust.
(iv) The Preferred Securities have been duly authorized by the
Trust Agreement, and when issued and sold in accordance with the
Trust Agreement, the Preferred Securities will be, subject to the
qualifications set forth in paragraph (v) below, fully paid and
nonassessable beneficial interests in the assets of the Trust and
entitled to the benefits of the Trust Agreement.
(v) The Preferred 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. Such opinion may note that the Preferred Security
Holders may be obligated to make payments as set forth in the
Trust Agreement.
(vi) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Preferred Securities is not subject
to preemptive rights.
(vii) The issuance and sale by the Trust of the Preferred
Securities and the Common Securities, the execution, delivery and
performance by the Trust of this Agreement, and the consummation
of the transactions contemplated by this Agreement, do not violate
(a) the Certificate of Trust or the Trust Agreement, or (b) any
applicable Delaware law, rule or regulation.
Such opinion may state that it is limited to the laws of the State
of Delaware and that the opinion expressed in paragraph (ii) above is
subject to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation,
fraudulent conveyance 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.
(f) On the Date of Delivery you shall have received from Milbank,
Tweed, Hadley & McCloy, Underwriters' Counsel, an opinion or opinions, in
form and substance satisfactory to you, with respect to the incorporation
of the Company, and the sufficiency of all such corporate proceedings and
other legal matters relating to the Preferred Securities, the Registration
Statement, the Prospectus, this Agreement, the Order and the transactions
contemplated hereby as you may reasonably require, and the Company shall
have furnished to such counsel such documents as they may have requested
for the purpose of enabling them to pass upon such matters. In rendering
such opinion, Underwriters' Counsel may rely upon the opinion of Michael E.
Zimmerman, Esq., as to all matters of law of the State of Montana.
(g) On the Date of Delivery, you shall have received from Price
Waterhouse a letter, dated as of such date, to the effect that:
(i) They are independent accountants with respect to the
Company within the meaning of the Act and the applicable published
rules and regulations thereunder;
(ii) In their opinion, the financial statements and financial
statement schedules examined by them and included or incorporated
by reference in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act
and the Exchange Act and of the published rules and regulations
and instructions of the Commission thereunder;
(iii) On the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting
of (A) a reading of (1) the unaudited interim consolidated
financial information of the Company and its Subsidiaries as of
March 31 and June 30, 1996, incorporated by reference in the
Prospectus, and (2) the most recent unaudited consolidated
financial statements of the Company and its Subsidiaries available
five business days prior to the date of such letter, not included
in the Prospectus, (B) a reading of the minutes of the meetings of
the stockholders and boards of directors of the Company and its
Subsidiaries for the period from January 1, 1996, to a specified
date not more than five business days prior to the date of such
letter, and (C) making inquiries of certain officials of the
Company responsible for financial and accounting matters regarding
the specific matters for which representations are requested
below, nothing came to their attention which caused them to
believe that (x) the unaudited interim consolidated financial
information of the Company and its Subsidiaries as of March 31 and
June 30, 1996, incorporated by reference in the Prospectus, was
not prepared on a basis substantially consistent with that of the
audited consolidated financial statements, incorporated by
reference in the Prospectus and in conformity with generally
accepted accounting principles, (y) the most recent unaudited con-
solidated financial statements of the Company and its Subsidiaries
available five business days prior to the date of such letter, not
included in the Prospectus, were not prepared on a basis
substantially consistent, except that such unaudited consolidated
financial statements do not include a consolidated statement of
common shareholders' equity or notes to the consolidated financial
statements, with that of the audited consolidated financial
statements incorporated by reference in the Prospectus, and (z)
during the period from the date of the most recent consolidated
balance sheet of the Company and its Subsidiaries included or
incorporated by reference in the Prospectus to a specified date
not more than five business days prior to the date of such letter,
there has been any change in the capital stock or long-term debt
(other than the issuance of shares of Common Stock under the
Company's dividend reinvestment and stock purchase plan,
employees' plans, scheduled redemptions of preferred stock or
repayments of long-term debt and purchases of debentures for
sinking fund purposes) of the Company and its Subsidiaries on a
consolidated basis, or any decrease in common shareholders' equity
of the Company and its Subsidiaries on a consolidated basis, as
compared with amounts shown on said balance sheet, or if unaudited
consolidated financial statements for any period subsequent to
June 30, 1996 shall be available five business days prior to the
date of such letter, during the period from June 30, 1996 to the
date of the most recent of such unaudited consolidated financial
statements available five business days prior to the date of such
letter, there has been any decrease, as compared with the
corresponding period in the preceding year, in utility operating
revenues, utility operating income, income from utility
operations, Entech sales, income from Entech operations,
consolidated net income or net income available for common stock,
of the Company and its Subsidiaries on a consolidated basis,
except in all instances for changes or decreases as set forth in
such letter, identifying the same and specifying the amounts
thereof, or which the Prospectus discloses have occurred or may
occur; and
(iv) They have performed certain other specified procedures
with respect to certain amounts and percentages set forth or
incorporated by reference in the Prospectus, as heretofore agreed
upon with the Representatives, and have found them to be in
agreement with the records of the Company and the computations to
be arithmetically correct.
In the event that the letter referred to above sets forth any change
or decrease other than those which the Prospectus discloses have occurred
or may occur, it shall be a further condition to the obligations of the
Underwriters that you, as Representatives of the Underwriters, shall have
determined after discussion with officers of the Company responsible for
financial and accounting matters and with Price Waterhouse, that such
changes or decreases as are set forth in such letter do not reflect an
adverse material change in the capital stock or long-term debt of the
Company and its Subsidiaries on a consolidated basis as compared with
amounts shown in the most recent consolidated balance sheet of the Company
and its Subsidiaries incorporated by reference in the Prospectus, or a
material adverse change in the consolidated financial position of the
Company and its Subsidiaries from that set forth in said consolidated
balance sheet, or a material adverse change in the consolidated results of
operations of the Company and its Subsidiaries as compared with their
consolidated results of operations for the corresponding period in the
fiscal year ended December 31, 1995.
(h) You shall have received a certificate or certificates, dated
the Date of Delivery, of the Chairman of the Board, the President, a Vice
President or the Treasurer of the Company to the effect that, to the best
of his or her knowledge based on a reasonable investigation, the
representations and warranties of the Company in this Agreement are true
and correct as though made on and as of the Date of Delivery; the Company
has complied with all the agreements and satisfied all the conditions
required by this Agreement to be performed or satisfied by the Company on
or prior to the Date of Delivery; and since the most recent date as of
which information is given in the Prospectus, except as contemplated by the
Prospectus, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business and there has not been
any material adverse change in the condition (financial or other) of the
Company.
(i) You shall have received a certificate, dated the Date of
Delivery, of an authorized representative of the Trust to the effect that,
to the best of his or her knowledge based upon a reasonable investigation,
the representations and warranties of the Trust in this Agreement are true
and correct as though made on and as of the Date of Delivery; the Trust has
complied with all the agreements and satisfied all the conditions required
by this Agreement to be performed or satisfied by the Trust on or prior to
the Date of Delivery; and since the most recent date as of which
information is given in the Prospectus, except as contemplated by the
Prospectus, the Trust has not incurred any material liabilities or
obligations, direct of contingent, or entered into any material
transactions not in the ordinary course of business and there has not been
any material adverse change in the condition (financial or otherwise) of
the Trust.
(j) On the Date of Delivery you shall have received duly executed
counterparts of the Trust Agreement, the Guarantee, the Indenture and the
Expense Agreement.
(k) On or prior to the Date of Delivery, Moody's Investors
Service, Inc. and Standard & Poor's Ratings Group shall have publicly
assigned to the Preferred Securities ratings of _____ and _____,
respectively, which ratings shall be in full force and effect on the Date
of Delivery.
(l) On or prior to the Date of Delivery, the Preferred Securities
shall have been duly listed, subject to notice of issuance, on the NYSE and
the Trust's registration statement on Form 8-A relating to the Preferred
Securities shall have become effective under the Exchange Act.
All such opinions, letters, certificates and evidence mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and scope satisfactory to
Underwriters' Counsel. The Company will furnish you with such conformed
copies of such opinions, certificates, letters and documents as you may
reasonably request.
If any condition to the Underwriters' obligations hereunder to be
satisfied on or prior to the Date of Delivery shall not be so satisfied,
the Representatives may terminate this Agreement without liability on the
part of any Underwriter or the Company, except for the expenses to be paid
or reimbursed by the Company pursuant to Paragraph 5(g) and except for any
liability under Paragraph 8.
7. Cancellation. You, as Representatives, by giving notice as
------------
hereinafter specified, may cancel this Agreement prior to the Date of
Delivery if, on or after the date of this Agreement and prior to the Date
of Delivery, (a) there shall have occurred any general suspension of
trading in securities on the New York Stock Exchange or there shall have
been established by the New York Stock Exchange or by the Commission or by
any Federal or state agency or by the decision of any court, any limitation
on prices for such trading or any restrictions on the distribution of
securities, all to such a degree as in your judgment would restrict
materially a free market for the Preferred Securities, or (b) there shall
have occurred an outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this clause (b), in the
judgment of the Representatives, makes it impracticable or inadvisable for
the Underwriters to proceed with the public offering or the delivery of the
Preferred Securities on the terms and in the manner contemplated in the
Prospectus, or (c) there shall have occurred a material adverse change in
the condition (financial or other) of the Company and its Subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus as first filed pursuant to Rule 424(b) after the Registration
Statement shall have become effective, the effect of which is, in the
judgment of the Representatives after consultation with the Company, so
material and adverse as to make it impracticable or inadvisable for the
Underwriters to proceed with the public offering or the delivery of the
Preferred Securities on the terms and in the manner contemplated in such
Prospectus, or (d) a downgrading shall have occurred in the rating accorded
to the Company's preferred stock by either Moody's Investors Service, Inc.
or Standard & Poor's Corporation.
In the event of such cancellation, the Company shall not be under any
liability to any Underwriter except for the expenses to be paid by it
pursuant to the provisions of Paragraph 5(g) and except for any liability
under Paragraph 8, nor shall any Underwriter be under any liability to the
Company except for any liability under Paragraph 8.
8. Indemnification. (a) The Offerors will, jointly and severally,
---------------
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of the Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter
or such controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Prepricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
Offerors will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
in any Prepricing Prospectus or the Prospectus in reliance upon and in
conformity with written information furnished to the Offerors by, or on
behalf of any Underwriter through, you specifically for use therein; and
provided further, that the indemnity agreement contained in this
subparagraph (a) shall not inure to the benefit of any Underwriter (or of
any person controlling such Underwriter) on account of any losses, claims,
damages or liabilities (or actions in respect thereof) arising from the
sale of Preferred Securities to any person if a copy of the Prospectus as
it then may be amended or supplemented (without the Incorporated Documents,
unless previously requested) 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 as so amended or supplemented, if so sent or
delivered, would have cured the defect in any Prepricing Prospectus or the
Prospectus giving rise to such losses, claims, damages or liabilities.
(b) Each Underwriter will indemnify and hold harmless each
Offeror, each of its directors, trustees, each of its officers who has
signed the Registration Statement and each person, if any, who controls
either Offeror within the meaning of the Act, against any losses, claims,
damages or liabilities to which either Offeror or any such director,
trustee, officer or controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Prepricing Prospectus, or in the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Prepricing
Prospectus or the Prospectus, in reliance upon and in conformity with
written information furnished to the Offerors by, or on behalf of such
Underwriter through, you specifically for use therein; and will reimburse
each Offeror for any legal or other expenses reasonably incurred by such
Offeror or any such director, officer or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action.
(c) Promptly after receipt by an indemnified party under this
Paragraph 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Paragraph 8, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise than under this Paragraph 8. In case
any such action is brought against any indemnified party, and such
indemnified party notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein,
and, to the extent that such indemnifying party may wish, jointly with any
other indemnifying party, similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, without the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Paragraph 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that in no event
shall such indemnifying party be obligated to retain more than one counsel,
in addition to counsel for such indemnifying party, to represent any or all
indemnified parties.
(d) If the indemnification provided for in either Paragraph 8(a)
or 8(b) is unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in
respect thereof) (i) in the event the indemnification provided for in
Paragraph 8(a) is unavailable or insufficient, in such proportion as is
appropriate to reflect the relative benefits received by the Offerors on
the one hand and each Underwriter on the other from the offering of the
Preferred Securities to which such loss, claim, damage or liability (or
action in respect thereof) relates, and (ii) in the event of
indemnification provided for in Paragraph 8(b) is unavailable or
insufficient, in such proportions as shall be appropriate to reflect the
relative fault of the Offerors on the one hand and the Underwriters on the
other in connection with the statements or omissions which shall have
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations.
If, however, the allocation provided by the immediately preceding sentence
with respect to indemnification provided for in Paragraph 8(a) should not
be permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party, in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of each Offeror on the one hand and
each Underwriter on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Offerors on the one
hand and each Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of the Preferred
Securities (before deducting expenses) received by the Trust bear to the
total underwriting commissions or discounts received by such Underwriter,
in each case as set forth in the table 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 either Offeror on the one hand or by any
Underwriter on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Offerors and each Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if all 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 8(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 8(d) 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 subsection 8(d), no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Preferred 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
Underwriters' obligations in this subsection 8(d) to contribute are several
in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Offerors under this Section 8 shall be
in addition to any liability which the Offerors may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any,
who controls any Underwriter within the meaning of the Act; and the
obligations of each Underwriter under this Section 8 shall be in addition
to any liability which such Underwriter may otherwise have and shall
extend, upon the same terms and conditions, to each director and trustee of
the Offerors, to each officer of either Offeror who has signed the
Registration Statement and to each person, if any, who controls either
Offeror within the meaning of the Act.
(f) The Company agrees to indemnify the Trust against any and all
losses, claims, damages or liabilities that may become due from the Trust
under this Section 8.
9. Representations and Indemnities to Survive Delivery. The
---------------------------------------------------
respective indemnities, agreements, representations and warranties and
other statements of the Offerors and their officers, directors or trustees
and of the Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made
by or on behalf of any Underwriter or either Offeror or any of its
officers, directors or trustees or any controlling person, and will survive
delivery of and payment for the Preferred Securities.
10. Representation of the Representative; Notices. If any person,
---------------------------------------------
firm or corporation, other than you, shall be listed as an Underwriter on
Schedule I hereto, you represent and warrant that, as Representatives of
the several Underwriters, you are entitled to execute this Agreement on
behalf of the several Underwriters and otherwise to act as representatives
on their behalf. The Offerors shall be entitled to act and rely upon any
request, consent, notice or agreement by you as Representatives of the
Underwriters. Any notices by either Offeror to the several Underwriters
shall be sufficient if given in writing or by telex, addressed to you, as
Representatives, at the address of the Representatives set forth on the
first page hereof, and any notice to the Company or the Trust shall be
sufficient if given by you as Representatives of the several Underwriters
in writing or by telex, addressed to it at 40 East Broadway, Butte, Montana
59701, marked for the attention of the Secretary of the Company.
11. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the several Underwriters and the Offerors and their respective
successors. Nothing expressed or mentioned in this Agreement is intended
or shall be construed to give any person, other than the persons mentioned
in the preceding sentence, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to
be and being for the sole and exclusive benefit of such persons and for the
benefit of no other person; except that the warranties, indemnities and
agreements of the Offerors contained in this Agreement shall also be for
the benefit of any person or persons, if any, who control(s) any
Underwriter or Underwriters within the meaning of Section 15 of the Act,
and except that the indemnities of the Underwriters shall also be for the
benefit of the directors and trustees of the Offerors, such of its officers
as shall have signed the Registration Statement and any person who controls
either Offeror within the meaning of said Section 15. No purchaser of any
of the Preferred Securities from any Underwriter shall be construed a
successor by reason merely of such purchase.
12. Underwriters Not Agents of the Company. Nothing herein contained
--------------------------------------
shall constitute the Underwriters, or any of them, agents or
representatives of the Offerors or authorize them to act for or on behalf
of the Offerors in any capacity.
13. Counterparts. This Agreement may be executed in one or more
------------
counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original
and all of which, taken together, shall constitute but one and the same
instrument.
14. Applicable Law. This Agreement shall be governed by, and
--------------
construed in accordance with, the laws of the State of New York.
<PAGE>
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for the
purpose, whereupon this letter and your acceptance shall constitute a
binding agreement between the Company, the Trust and the several Under-
writers.
Very truly yours,
THE MONTANA POWER COMPANY
By:______________________
Name:
Title:
MONTANA POWER CAPITAL I
By:______________________
Name:
Title:
ACCEPTED as of the date
first above written:
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
Acting on behalf of themselves and as
Representatives of the several Underwriters.
By:________________________________
GOLDMAN, SACHS & CO.
<PAGE>
SCHEDULE I
----------
Underwriting Agreement:
----------------------
Dated:
Securities:
----------
Designation: __% Cumulative Quarterly Income Preferred
Securities, Series A
Date of Maturity:
Liquidation Preference Amount: $25, per unit; $ total
Number of Units:
Distribution Rate per unit:
Purchase Price per unit:
Public Offering Price per unit:
Underwriting Commission:
Registration Statement:
----------------------
Nos. 333-________ and 333-________
Filed on:
MPSC Order:
----------
Effective on:
Docket No.:
Date of Issuance:
Purchase and Sale:
-----------------
Underwriters: Units of Preferred Securities:
Goldman, Sachs & Co.
Dean Witter Reynolds Inc.
Lehman Brothers Inc.
Merrill, Lynch, Pierce, Fenner & Smith
Incorporated
______________________ __________________________
Total
Closing:
-------
Date:
Exhibit 4(a)
TRUST AGREEMENT
OF MONTANA POWER CAPITAL I
This TRUST AGREEMENT of Montana Power Capital I (the
"Trust"), dated as of October__, 1996, among (i) The Montana Power
Company, a Montana corporation (the "Depositor"), (ii) The Bank of New
York, a New York banking corporation, not in its individual capacity
but solely as trustee of the Trust, (iii) The Bank of New York
(Delaware), a Delaware banking corporation, not in its individual
capacity but solely as trustee of the Trust, and (iv) Ellen M.
Senechal, an individual employed by the Depositor, not in her
individual capacity but solely as trustee of the Trust (the
"Administrative Trustee") (each of such trustees in (ii), (iii) and
(iv) a "Trustee" and collectively, the "Trustees"). The Depositor and
the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "Montana
Power Capital I", in which name the Trustees, or the Depositor to the
extent provided herein, may conduct the business of the Trust, make
and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and
sets over to the Trustees the sum of $10. The Trustees hereby
acknowledge receipt of such amount in trust from the Depositor, which
amount shall constitute the initial trust estate. The Trustees hereby
declare that they will hold the trust estate in trust for the
Depositor. It is the intention of the parties hereto that the Trust
created hereby constitute a business trust under Chapter 38 of Title
12 of the Delaware Code, 12 Del. C. Section 3801 et seq. (the
------- -------
"Business Trust Act"), and that this document constitutes the
governing instrument of the Trust. The Trustees are hereby authorized
and directed to execute and file a certificate of trust with the
Secretary of State of the State of Delaware in accordance with the
provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an
amended and restated Trust Agreement, satisfactory to each such party
and substantially in the form to be included as an exhibit to the 1933
Act Registration Statement referred to below, to provide for the
contemplated operation of the Trust created hereby and the issuance of
the Preferred Securities and Common Securities referred to therein.
Prior to the execution and delivery of such amended and restated Trust
Agreement, the Trustees shall not have any duty or obligation
hereunder or with respect of the trust estate, except as otherwise
required by applicable law or as may be necessary to obtain prior to
such execution and delivery any licenses, consents or approvals
required by applicable law or otherwise. The Administrative Trustee
is hereby authorized and directed, on behalf of the Trust, to execute
and deliver an underwriting agreement in respect of the sale of the
Preferred Securities in such form as the Depositor shall approve.
4. The Depositor and the Trustees hereby authorize and
direct the Depositor (i) to prepare and file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on
behalf of the Trust, (a) a Registration Statement on Form S-3 (the
"1933 Act Registration Statement"), including any pre-effective or
post-effective amendments to the 1933 Act Registration Statement,
relating to the registration under the Securities Act of 1933, as
amended, of the Preferred Securities of the Trust and certain other
securities and (b) a Registration Statement on Form 8-A (the "1934 Act
Registration Statement") (including all pre-effective and post-
effective amendments thereto) relating to the registration of the
Preferred Securities of the Trust under Section 12(b) of the
Securities Exchange Act of 1934, as amended; (ii) to prepare and file
with the New York Stock Exchange (the "Exchange") and execute on
behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be
necessary or desirable to cause the Preferred Securities to be listed
on the Exchange and (iii) to prepare and file and execute on behalf of
the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to register
the Preferred Securities under the securities or blue sky laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem
necessary or desirable. In the event that any filing referred to
above is required by the rules and regulations of the Commission, the
Exchange or state securities or blue sky laws, to be executed on
behalf of the Trust by one or more of the Trustees, each of the
Trustees, in its or his capacity as Trustee of the Trust, is hereby
authorized and, to the extent so required, directed to join in any
such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that The Bank of New York and The Bank
of New York (Delaware), in their capacities as Trustees of the Trust,
respectively, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by
the rules and regulations of the Commission, the Exchange or state
securities or blue sky laws. In connection with the filings referred
to above, the Depositor and each Trustee, solely in its or his
capacity as Trustee of the Trust, hereby constitutes and appoints
Daniel T. Berube, Jerry P. Pederson, Ellen M. Senechal and Robert G.
Schuur, and each of them, as its or his true and lawful attorneys-in-
fact and agents, with full power of substitution and resubstitution,
for the Depositor or such Trustee or in the Depositor's or such
Trustee's name, place and stead, in any and all capacities, to sign
any and all amendments (including post-effective amendments) to any of
such filings (including the 1933 Act Registration Statement) and the
1934 Act Registration Statement and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Commission, the Exchange and securities or blue sky laws
administrators, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as the Depositor or such Trustee might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their respective
substitute or substitutes, shall do or cause to be done by virtue
hereof.
5. This Trust Agreement may be executed in one or more
counterparts.
6. The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall be
fixed from time to time by a written instrument signed by the
Depositor which may increase or decrease the number of Trustees;
provided, however, that to the extent required by the Business Trust
Act, one Trustee shall be either 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 and
otherwise meets the requirements of applicable Delaware law. Subject
to the foregoing, the Depositor is entitled to appoint or remove
without cause any Trustee at any time. The Trustees may resign upon
thirty days prior written notice to Depositor.
7. The Depositor shall have the right to terminate the
Trust at any time prior to the issuance of any Preferred Security.
8. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware
(without regard to conflict of laws principles).
IN WITNESS WHEREOF, the parties hereto have caused this
Trust Agreement to be duly executed as of the day and year first above
written.
THE MONTANA POWER COMPANY,
as Depositor
By:______________________________
Name:
Title:
THE BANK OF NEW YORK, not in its
individual capacity but solely
as Trustee
By:_____________________________
Name:
Title:
THE BANK OF NEW YORK
(DELAWARE), not in its
individual capacity but
solely as Trustee
By:____________________________
Name:
Title:
______________________________,
Ellen M. Senechal, not in her
individual capacity but solely
as Trustee
Exhibit 4(b)
===========================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
THE MONTANA POWER COMPANY, as Depositor
and
THE BANK OF NEW YORK,
as Property Trustee,
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
and
________ ________
________ ________
and
, as Administrative Trustees
________ ________
Dated as of , 199
--------- -- -
MONTANA POWER CAPITAL I
===========================================================================
<PAGE>
MONTANA POWER CAPITAL I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
--------------- ---------------
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . 8.07
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 8.07
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . 8.09
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 8.08
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . 8.13
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 8.13
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . 5.07
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . 8.14
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . 8.14
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 8.14
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 8.14
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 8.14
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . 8.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 8.02, 8.14
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 8.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 8.01, 8.03
(e) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.09
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . 1.06
--------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
ARTICLE I.
Definitions and Other Provisions of General Application
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . 3
Section 1.02. Compliance Certificates and Opinions . . . . . . . 11
Section 1.03. Form of Documents Delivered to Trustee . . . . . . 11
Section 1.04. Acts of Securityholders . . . . . . . . . . . . . . 12
Section 1.05. Notices, etc. to the Trustees and the Depositor. . 14
Section 1.06. Notice to Securityholders; Waiver . . . . . . . . . 15
Section 1.07. Conflict with Trust Indenture Act . . . . . . . . . 16
Section 1.08. Effect of Headings and Table of Contents . . . . . 16
Section 1.09. Successors . . . . . . . . . . . . . . . . . . . . 16
Section 1.10. Separability . . . . . . . . . . . . . . . . . . . 16
Section 1.11. Governing Law . . . . . . . . . . . . . . . . . . . 16
ARTICLE II.
Establishment of the Trust; Issuance of Trust Securities; Rights of
Securityholders
Section 2.01. Name . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.02. Office of the Delaware Trustee; Principal Place of
Business . . . . . . . . . . . . . . . . . . . . . 17
Section 2.03. Initial Contribution of Trust Property; Initial
Ownership; Organizational Expenses. . . . . . . . . 17
Section 2.04. Declaration of Trust; Appointment of Additional
Administrative Trustees . . . . . . . . . . . . . . 17
Section 2.05. Authorization to Enter into Certain Transactions . 18
Section 2.06. Assets of Trust . . . . . . . . . . . . . . . . . . 21
Section 2.07. Title to Trust Property . . . . . . . . . . . . . . 21
Section 2.08. Issuance of the Preferred Securities . . . . . . . 21
Section 2.09. Subscription and Purchase of Debentures; Issuance
of the Common Securities . . . . . . . . . . . . . 22
Section 2.10. Rights of Securityholders. . . . . . . . . . . . . 22
ARTICLE III.
Payment Account
Section 3.01. Payment Account . . . . . . . . . . . . . . . . . . 22
ARTICLE IV.
Distributions; Redemption
Section 4.01. Distributions . . . . . . . . . . . . . . . . . . . 23
Section 4.02. Redemption . . . . . . . . . . . . . . . . . . . . 24
Section 4.03. Subordination of Common Securities . . . . . . . . 25
Section 4.04. Tax Returns and Reports . . . . . . . . . . . . . . 26
Section 4.05. Payments under Subordinated Indenture . . . . . . . 26
ARTICLE V.
Trust Securities Certificates
Section 5.01. The Trust Securities Certificates . . . . . . . . . 26
Section 5.02. Ownership of Common Securities by Depositor . . . . 27
Section 5.03. Registration of Transfer and Exchange of Preferred
Securities Certificates . . . . . . . . . . . . . . 27
Section 5.04. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates . . . . . . . . . . . . . . 28
Section 5.05. Cancellation by Registrar . . . . . . . . . . . . . 28
Section 5.06. Persons Deemed Securityholders . . . . . . . . . . 28
Section 5.07. List of Securityholders . . . . . . . . . . . . . . 29
Section 5.08. Maintenance of Office or Agency . . . . . . . . . . 29
Section 5.09. Appointment of Paying Agent . . . . . . . . . . . . 29
Section 5.10. Book-Entry System . . . . . . . . . . . . . . . . . 30
ARTICLE VI.
Voting; Meetings; Actions to Enforce Rights
Section 6.01. Voting Rights; Limitations Thereof . . . . . . . . 30
Section 6.02. Purpose for Which Meetings May Be Called . . . . . 31
Section 6.03. Call, Notice and Place of Meetings . . . . . . . . 31
Section 6.04. Persons Entitled to Vote at Meetings . . . . . . . 32
Section 6.05. Quorum; Action . . . . . . . . . . . . . . . . . . 32
Section 6.06. Attendance at Meetings; Determination of Voting
Rights; Conduct and Adjournment of Meetings . . . . 33
Section 6.07. Counting Votes and Recording Action of Meetings . . 34
Section 6.08. Action Without Meeting . . . . . . . . . . . . . . 34
Section 6.09. Inspection of Records . . . . . . . . . . . . . . . 34
Section 6.10. Actions to Enforce Rights. . . . . . . . . . . . . 34
ARTICLE VII.
Representations and Warranties of the Property Trustee and the Delaware
Trustee
Section 7.01. Property Trustee . . . . . . . . . . . . . . . . . 35
Section 7.02. Delaware Trustee . . . . . . . . . . . . . . . . . 36
ARTICLE VIII.
The Trustees
Section 8.01. Certain Duties and Responsibilities . . . . . . . . 37
Section 8.02. Certain Notices . . . . . . . . . . . . . . . . . . 38
Section 8.03. Certain Rights of Property Trustee . . . . . . . . 38
Section 8.04. Not Responsible for Recitals or Issuance of
Securities . . . . . . . . . . . . . . . . . . . . 40
Section 8.05. May Hold Securities . . . . . . . . . . . . . . . . 41
Section 8.06. Compensation; Fees; Indemnity . . . . . . . . . . . 41
Section 8.07. Certain Trustees Required; Eligibility . . . . . . 42
Section 8.08. Conflicting Interests . . . . . . . . . . . . . . . 42
Section 8.09. Co-Trustees and Separate Trustee . . . . . . . . . 42
Section 8.10. Resignation and Removal; Appointment of Successor . 44
Section 8.11. Acceptance of Appointment by Successor . . . . . . 45
Section 8.12. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . 46
Section 8.13. Preferential Collection of Claims Against
Depositor or Trust . . . . . . . . . . . . . . . . 46
Section 8.14. Reports by Property Trustee, Trust and Depositor . 46
Section 8.15. Number of Trustees. . . . . . . . . . . . . . . . . 47
Section 8.16. Delegation of Power. . . . . . . . . . . . . . . . 47
Section 8.17. Fiduciary Duty . . . . . . . . . . . . . . . . . . 47
ARTICLE IX.
Termination and Liquidation
Section 9.01. Termination Upon Expiration Date . . . . . . . . . 49
Section 9.02. Early Termination . . . . . . . . . . . . . . . . . 49
Section 9.03. Termination . . . . . . . . . . . . . . . . . . . . 49
Section 9.04. Liquidation . . . . . . . . . . . . . . . . . . . . 49
ARTICLE X.
Miscellaneous Provisions
Section 10.01. Guarantee by the Depositor and Assumption of
Obligations . . . . . . . . . . . . . . . . . . . . 51
Section 10.02. Limitation of Rights of Securityholders . . . . . . 51
Section 10.03. Amendment . . . . . . . . . . . . . . . . . . . . . 51
Section 10.04. Agreement Not to Petition . . . . . . . . . . . . . 53
EXHIBITS
A. Certificate of Trust . . . . . . . . . . . . . . . . . . . . A-1
B. Certificate Evidencing Common Securities . . . . . . . . . . B-1
C. Agreement as to Expenses and Liabilities . . . . . . . . . . C-1
D. Certificate Evidencing Preferred Securities . . . . . . . . . D-1
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of , 199 ,
------- --
among (i) The Montana Power Company, a Montana corporation (the
"Depositor"), (ii) The Bank of New York, a banking corporation duly
organized and existing under the laws of New York, as trustee (in such
capacity, the "Property Trustee"), (iii) The Bank of New York (Delaware), a
banking corporation duly organized and existing under the laws of Delaware,
as Delaware trustee (in such capacity, the "Delaware Trustee"), and (iv)
, , and , each an
-------- -------- ---------------- -------- --------
individual, whose address is c/o The Montana Power Company, 40 East
Broadway, Butte, Montana 59701-9989 (each, in such capacity an
"Administrative Trustee" and collectively the "Administrative Trustees")
(the Property Trustee, the Delaware Trustee and the Administrative Trustees
being hereinafter referred to collectively as the "Trustees").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Depositor, the Property Trustee, the Delaware
Trustee and , as Administrative Trustee, have heretofore duly
--------
declared and established a business trust by the name of Montana Power
Capital I (the "Trust") pursuant to the Delaware Business Trust Act (as
hereinafter defined) by the entering into of that certain Trust Agreement,
dated as of , 199 (the "Original Trust Agreement"), and by the
-------- -- -
execution by the Property Trustee, the Delaware Trustee and , as
--------
Administrative Trustee, and filing with the Secretary of State of the State
of Delaware of the Certificate of Trust, dated , 199 (the
-------- -- -
"Certificate of Trust"), a copy of which is attached as Exhibit A; and
WHEREAS, the Depositor, the Property Trustee, Delaware Trustee
and , as Administrative Trustee, desire to amend and restate the
--------
Original Trust Agreement in its entirety as set forth herein to provide
for, among other things, (i) the acquisition by the Trust from the
Depositor of all of the right, title and interest in the Debentures (as
hereinafter defined), (ii) the issuance of the Common Securities (as
hereinafter defined) by the Trust to the Depositor, (iii) the issuance of
the Preferred Securities (as hereinafter defined) by the Trust and (iv) the
appointment of the additional Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, each party, for the benefit of
the other parties and for the benefit of the Securityholders (as
hereinafter defined), hereby amends and restates the Original Trust
Agreement in its entirety and agrees as follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. DEFINITIONS. For all purposes of this Trust
Agreement, 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 other terms used herein that are defined in the
Trust Indenture Act, either directly or by reference therein,
have the meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to
an "Article" or a "Section" refers to an Article or a Section, as
the case may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole
and not to any particular Article, Section or other subdivision.
"Act," when used with respect to any Securityholder, has the
meaning specified in Section 1.04.
"Additional Amount" means, with respect to Trust Securities of a
given Liquidation Amount and for a given period, the amount of Additional
Interest (as defined in the Subordinated Indenture) paid by the Depositor
on a like principal amount of Debentures for such period.
"Administrative Trustee" means each of the individuals identified
as an "Administrative Trustee" in the preamble to this Trust Agreement,
solely in their capacities as Administrative Trustees of the Trust formed
hereunder and not in their individual capacities, or any successor trustee
appointed as herein provided.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Depositor, the
Chairman of the Board, the President, any Vice President, the Treasurer,
any Assistant Treasurer, or any other officer or agent of the Depositor
duly authorized by the Board of Directors to act in respect of matters
relating to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of such Person under Bankruptcy Laws, or appointing a
receiver, liquidator, assignee, trustee sequestrator or other
similar official of such Person or of any substantial part of its
property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days; or
(ii) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or of the consent by it to
the institution of bankruptcy or insolvency proceedings against
it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under Bankruptcy Laws, or the
consent by it to the filing of such petition or to the
appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Person 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.
"Bankruptcy Laws" has the meaning specified in Section 10.04.
"Board of Directors" means either the board of directors of the
Depositor or any committee thereof duly authorized to act in respect of
matters relating to this Trust Agreement.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor 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 appropriate Trustee.
"Business Day" means any day other than a Saturday or a Sunday,
which is not (i) a day on which banking institutions or trust companies in
New York, New York are generally authorized or required by law, regulation
or executive order to remain closed and (ii) a day on which either the
Corporate Trust Office or the Debenture Trustee's principal corporate trust
office or the office of the Paying Agent is closed for business.
"Certificate of Trust" has the meaning specified in the preamble
to this Trust Agreement.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. The Depository Trust
Company will be the initial Clearing Agency.
"Closing Date" means the date of execution and delivery of this
Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at
any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body, if any, performing such duties at such time.
"Common Security" means an undivided beneficial interest in the
assets of the Trust having a Liquidation Amount of $25 and having the
rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.
"Common Securityholder" means the Person in whose name a Common
Security is registered in the Securities Register.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as
Exhibit B.
"Corporate Trust Office" means the office of the Property Trustee
at which at any particular time its corporate trust business shall be
principally administered, which office at the date of execution and
delivery of this Trust Agreement is located at 101 Barclay Street, New
York, New York 10286.
"Covered Person" means (a) any officer, director, shareholder,
partner, beneficial owner, member, representative, employee or agent of the
Trust or the Trust's Affiliates; and (b) any Securityholder.
"Debenture Event of Default" means an "Event of Default" with
respect to the Debentures under the Subordinated Indenture.
"Debenture Issuer" means The Montana Power Company, a Montana
corporation, in its capacity as issuer of the Debentures.
"Debenture Redemption Date" means "Redemption Date" as defined in
the Subordinated Indenture.
"Debenture Trustee" means The Bank of New York, as trustee under
the Subordinated Indenture, and any duly appointed successor trustee or co-
trustee thereto.
"Debentures" means $ aggregate principal amount of
------------
the Debenture Issuer's Junior Subordinated Deferrable Interest Debentures,
% series due 20 , issued pursuant to the Subordinated Indenture.
--
"Delaware 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.
"Delaware Trustee" means the banking corporation identified as
the "Delaware Trustee" in the preamble to this Trust Agreement solely in
its capacity as Delaware Trustee of the Trust formed hereunder and not in
its individual capacity, or its successor in interest in such capacity, or
any successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this
Trust Agreement.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Early Termination Event" has the meaning specified in Section
9.02.
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default
for a period of 30 days; or
(iii) default by the Trust in the payment of any
Redemption Price of any Trust Security when it becomes due and
payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this
Trust Agreement (other than a covenant or warranty a default in
whose performance or breach is specifically dealt with in clause
(ii) or (iii), above) and continuation of such default or breach
for a period of 60 days after there has been given, by registered
or certified mail, to the Property Trustee by the Holders of at
least 33% in Liquidation Amount of the Outstanding Preferred
Securities 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; or
(v) the occurrence of a Bankruptcy Event with respect to
the Trust.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in the form
attached as Exhibit C, as amended from time to time.
"Expiration Date" means December 31, 20 .
--
"Guarantee" means the Guarantee Agreement executed and delivered
by the Depositor and The Bank of New York, a New York banking corporation,
as trustee, contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the Holders of the Preferred Securities, as
amended from time to time.
"Holder" has the meaning specified in the definition of
"Securityholder".
"Indemnified Person" means any Trustee, any Affiliate of any
Trustee, any officer, director, shareholder, member, partner, employee,
representative or agent of any Trustee, or any employee or agent of the
Trust or its Affiliates.
"Investment Company Act" means the Investment Company Act of
1940, as amended.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment,
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
"Like Amount" means, as the context requires, (i) Trust
Securities having a Liquidation Amount equal to the principal amount of
Debentures at any time to be repaid, whether at stated maturity or upon
maturity by earlier acceleration, redemption or otherwise, and (ii)
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities with respect to which such Debentures are to be
distributed.
"Liquidation Amount" means the stated amount of $25 per Trust
Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Securityholders in connection with a termination and
liquidation of the Trust pursuant to Section 9.04(d).
"Liquidation Distribution" has the meaning specified in
Section 9.04(d).
"Officer's Certificate" means a certificate signed by an
Authorized Officer.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Depositor (but not an employee thereof) or other counsel
acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
"Outstanding," when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities
theretofore delivered under this Trust Agreement, except:
(i) Preferred Securities theretofore canceled by the
Registrar or delivered to the Registrar for cancellation;
(ii) Preferred Securities for whose payment or redemption
money in the necessary amount shall have been theretofore deposited
with the Property Trustee or any Paying Agent for the Holders of such
Preferred Securities; provided that, if such Preferred Securities are
to be redeemed, notice of such redemption shall have been duly given
pursuant to this Trust Agreement; and
(iii) Preferred Securities in exchange for or in lieu of
which other Preferred Securities have been delivered pursuant to this
Trust Agreement, including pursuant to Sections 5.03 or 5.04;
provided, however, that in determining whether the Holders of the requisite
amount of the Outstanding Preferred Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, or
whether or not a quorum is present at a meeting of Securityholders,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate
of the Depositor or any Trustee (unless the Depositor, such Trustee, or
such Affiliate of the Depositor or such Trustee owns all of the Outstanding
Preferred Securities, determined without regard to this provision) shall be
disregarded and deemed not to be Outstanding, except that (a) in
determining whether any 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 Preferred
Securities which such Trustee knows to be so owned shall be so disregarded;
provided, however, that Preferred Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the
pledgee's right so to act with respect to such Preferred Securities and
that the pledgee is not the Depositor or any Affiliate of the Depositor.
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.09 and initially shall be The Bank of New
York.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with The Bank of
New York, or such other banking institution as the Depositor shall select,
in its trust department for the benefit of the Securityholders in which all
amounts paid in respect of the Debentures will be held and from which the
Paying Agent, pursuant to Section 5.09, shall make payments to the
Securityholders in accordance with Sections 4.01 and 4.02.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in
the assets of the Trust, designated as " % cumulative quarterly income
----
preferred securities", having a Liquidation Amount of $25 and having rights
provided therefor in this Trust Agreement.
"Preferred Securityholder" means a Person in whose name a
Preferred Security is registered in the Securities Register.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as
Exhibit D.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust
Agreement solely in its capacity as Property Trustee of the Trust formed
hereunder and not in its individual capacity, or its successor in interest
in such capacity, or any successor trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by Section 4.02.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions thereon to the Redemption Date.
"Registrar" shall mean the registrar for the Trust Securities
appointed pursuant to Section 2.05(a)(i)(G) and shall be initially The Bank
of New York.
"Securities Depository" shall be a Person having the
qualifications and appointed by the Depositor to perform the duties set
forth in Section 5.10. The initial Securities Depository shall be The
Depository Trust Company.
"Securities Register" shall mean the Securities Register
described in Section 5.03.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security is registered in the Securities Register. Any such Person shall
be deemed to be a beneficial owner of such security within the meaning of
the Delaware Business Trust Act.
"Subordinated Indenture" means the Indenture, dated as of
, 199 , between the Depositor and the Debenture Trustee, as
-------- -- -
amended or supplemented from time to time.
"Transfer Agent" means one or more transfer agents for the Trust
Securities appointed pursuant to Section 2.05(a)(i)(G) and shall be
initially The Bank of New York.
"Trust" means Montana Power Capital I, a statutory business trust
formed under the laws of the State of Delaware, initially established under
the Original Trust Agreement and continued hereby, or any permitted
successor hereunder.
"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in
accordance with the applicable provisions hereof.
"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 Property" means (i) the Debentures, (ii) any cash on
deposit in, or owing to, the Payment 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 Property Trustee pursuant to the trusts of this
Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
"Trustee" means any of the Administrative Trustees, the Property
Trustee or the Delaware Trustee.
"Underwriting Agreement" means the Underwriting Agreement, dated
as of , 199 , among the Trust, the Depositor and the
------------ -
underwriters named therein.
SECTION 1.02. COMPLIANCE CERTIFICATES AND OPINIONS. (a) Except
as otherwise expressly provided in this Trust Agreement, upon any
application or request by the Depositor to any Trustee to take any action
under any provision of this Trust Agreement, the Depositor shall, if
requested by such Trustee, furnish to such Trustee an Officer's Certificate
stating that all conditions precedent, if any, provided for in this Trust
Agreement relating to the proposed action (including any covenants
compliance with which constitutes a condition precedent) have been complied
with and an Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent, if any, have been complied with, except that
in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Trust
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
(b) Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Trust Agreement shall include:
(i) a statement that each Person signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(ii) 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;
(iii) a statement that, in the opinion of each such
Person, such Person has made such examination or investigation as is
necessary to enable such Person to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. (a) 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.
(b) Any Officer's Certificate may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such Officer's
Certificate are based are erroneous. Any Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of,
or representations by, an officer or officers of the Depositor stating that
the information with respect to such factual matters is in the possession
of the Depositor, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions
or other instruments under this Trust Agreement, they may, but need not, be
consolidated and form one instrument.
(d) Whenever, subsequent to the receipt by any 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 Trust Agreement to the contrary notwithstanding, if any
such corrective document or instrument indicates that action has been taken
by or at the request of the Depositor 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.
SECTION 1.04. ACTS OF SECURITYHOLDERS. (a) Any request,
demand, authorization, direction, notice, consent, election, waiver or
other action provided by this Trust Agreement to be made, given or taken by
Securityholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Securityholders in person or
by an agent duly appointed in writing or, alternatively, may be embodied in
and evidenced by the record of Securityholders voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Securityholders duly called and held in accordance with the provisions of
Article VI, 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 Administrative Trustees. 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 Securityholders
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 Trust Security, shall be
sufficient for any purpose of this Trust Agreement and (subject to Section
8.01) conclusive in favor of the Administrative Trustees, if made in the
manner provided in this Section. The record of any meeting of
Securityholders shall be proved in the manner provided in Section 6.07.
(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
appropriate Trustee and the Depositor 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 aggregate Liquidation Amount and serial numbers of Trust
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 Securityholder shall bind every
future Holder of the same Trust Security and the Holder of every Trust
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 any Trustee or the Depositor in reliance thereon,
whether or not notation of such action is made upon such Trust Security.
(e) Until such time as written instruments shall have been
delivered to the appropriate Trustee representing the requisite proportion
of Outstanding Trust Securities for the action contemplated by such
instruments, any such instrument executed and delivered by or on behalf of
a Securityholder may be revoked with respect to any or all of such Trust
Securities by written notice by such Securityholder or any subsequent
Securityholder, proven in the manner in which such instrument was proven.
(f) Trust Securities delivered after any Act of Securityholders
may, and shall if required by the Property Trustee, bear a notation in form
approved by the Property Trustee as to any action taken by such Act of
Securityholders. If the Depositor shall so determine, new Trust Securities
so modified as to conform, in the opinion of the Property Trustee and the
Depositor, to such action may be prepared and executed by an Administrative
Trustee on behalf of the Trust and delivered in exchange for Outstanding
Preferred Securities.
(g) If the Trustees shall solicit from Securityholders any
request, demand, authorization, direction, notice, consent, waiver or other
Act, the Trustees may fix in advance a record date for the determination of
Securityholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Trustees shall
have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may
be given before or after such record date, but only the Securityholders of
record at the close of business on the record date shall be deemed to be
Securityholders for the purposes of determining whether Securityholders of
the requisite proportion of the Outstanding Preferred Securities have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
Outstanding Preferred Securities shall be computed as of the record date.
SECTION 1.05. NOTICES, ETC. TO THE TRUSTEES AND THE DEPOSITOR.
(a) Any request, demand, authorization, direction, notice,
consent, election, waiver or Act of Securityholder or other document
provided or permitted by this Trust Agreement to be made upon, given or
furnished to, or filed with, any Trustee by any Holder or by the Depositor,
or the Depositor by any Trustee or by any Holder, shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and delivered personally to the individual or an officer or other
responsible employee of the addressee, or transmitted by facsimile
transmission 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 certified or
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 Property Trustee, to:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Assistant Vice President,
Corporate Trust Administration
Telephone: (212) 815-3806
Telecopy: (212) 815-5915
If to the Delaware Trustee, to:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
Telephone: (302) 451-2551
Telecopy: (302) 451-2540
with a copy to:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Assistant Vice President,
Corporate Trust Administration
Telephone: (212) 815-3806
Telecopy: (212) 815-5915
If to the Trust or the Administrative Trustees, to:
The Montana Power Company
40 East Broadway
Butte, Montana 59701
Attention: Administrative Trustees For Montana Power Capital
I
Telephone: (406) 497-2374
Telecopy: (406) 497-3018
If to the Depositor, to:
The Montana Power Company
40 East Broadway
Butte, Montana 59701-9394
Attention: Treasurer
Telephone: (406) 497-2374
Telecopy: (406) 497-3018
(b) 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 or other direct
written electronic means, on the date of transmission, and if transmitted
by registered mail, on the date of receipt.
SECTION 1.06. NOTICE TO SECURITYHOLDERS; WAIVER. (a) Except as
otherwise expressly provided herein, where this Trust Agreement 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 Securities Register, not later
than the latest date, if any, and not earlier than the earliest date, if
any, prescribed for the giving of such notice. Any notice received by any
Trustee, on behalf of the Trust in its capacity as a holder of Debentures,
shall be given to the Securityholders.
(b) 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 Administrative Trustees 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.
(c) Any notice required by this Trust Agreement 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 Administrative Trustees, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
SECTION 1.07. CONFLICT WITH TRUST INDENTURE ACT. If any
provision of this Trust Agreement limits, qualifies or conflicts with
another provision hereof which is required or deemed to be included in this
Trust Agreement by, or is otherwise governed by, any of the provisions of
the Trust Indenture Act, such other provision shall control; and if any
provision hereof otherwise conflicts with the Trust Indenture Act, the
Trust Indenture Act shall control.
SECTION 1.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The
Article and Section headings in this Trust Agreement and the Table of
Contents are for convenience only and shall not affect the construction
hereof.
SECTION 1.09. SUCCESSORS. This Trust Agreement shall be binding
upon and shall inure to the benefit of any successor to the Trust or any
Trustees, including any successor by operation of law.
SECTION 1.10. SEPARABILITY. In case any provision in this Trust
Agreement or in the Trust Securities Certificates shall 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 1.11. GOVERNING LAW. THIS TRUST AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE
TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).
ARTICLE II.
ESTABLISHMENT OF THE TRUST; ISSUANCE OF TRUST SECURITIES; RIGHTS OF
SECURITYHOLDERS
SECTION 2.01. NAME. The Trust created hereby shall be known as
"Montana Power Capital I," in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 2.02. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS. The office of the Delaware Trustee in the State of Delaware is
White Clay Center, Route 273, Newark, Delaware 19711, or at such other
address in Delaware as the Delaware Trustee may designate by written notice
to the Securityholders and the Depositor. The principal place of business
of the Trust is c/o The Montana Power Company, 40 East Broadway, Butte,
Montana 59701-9989.
SECTION 2.03. INITIAL CONTRIBUTION OF TRUST PROPERTY; INITIAL
OWNERSHIP; ORGANIZATIONAL EXPENSES. The Property Trustee acknowledges
receipt in trust from the Depositor in connection with the Original Trust
Agreement of the sum of $10, which constituted the initial contribution of
Trust Property. Upon the formation of the Trust by such contribution and
until the issuance of the Trust Securities, and at any time during which no
Trust Securities are outstanding, the Depositor shall be the sole
beneficial owner (within the meaning of the Delaware Business Trust Act) of
the Trust. The Depositor shall pay organizational expenses of the Trust as
they arise or shall, upon request of any Trustee, promptly reimburse such
Trustee for any such expenses paid by such Trustee. The Depositor shall
make no claim upon the Trust Property for the payment of such expenses.
SECTION 2.04. DECLARATION OF TRUST; APPOINTMENT OF ADDITIONAL
ADMINISTRATIVE TRUSTEES. (a) The exclusive purposes and functions of the
Trust are (i) to issue and sell Trust Securities and invest the proceeds
thereof in Debentures, (ii) to receive payments to be made with respect to
the Debentures and disburse such payments in accordance with the terms
hereof, and (iii) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees
of the Trust, to have all the rights, powers and duties to the extent set
forth herein. The Property Trustee hereby declares that it will hold the
Trust Property in trust upon and subject to the conditions set forth herein
for the benefit of the Securityholders. The Trustees shall have all
rights, powers and duties set forth herein and in accordance with
applicable law with respect to accomplishing the purposes and functions of
the Trust. Anything in this Trust Agreement to the contrary
notwithstanding, 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 Property Trustee or the Administrative Trustees
set forth herein. The Delaware Trustee shall be one of the Trustees of the
Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.
(b) The Depositor, the Property Trustee, the Delaware Trustee
and , as Administrative Trustee, hereby appoint
-------- -------- --------
and as additional Administrative Trustees, each
-------- -------- --------
of which persons by execution of this Trust Agreement accepts such
appointment.
SECTION 2.05. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section 2.05 and Article VIII and in accordance with
the following provisions (i) and (ii), the Trustees shall have the
authority to enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees under this Trust Agreement, and to
perform all acts in furtherance thereof, including without limitation, the
following:
(i) As among the Trustees, the Administrative Trustees, acting singly
or jointly, shall have the power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) the execution, delivery and performance of the Expense
Agreement, the Underwriting Agreement and such other agreements,
certificates and documents as may be necessary or desirable in
connection with the purposes and functions of the Trust;
(C) the qualification of the Trust to do business in any
jurisdiction as may be necessary or desirable;
(D) the collection of interest, principal and any other
payments made in respect of the Debentures in the Payment
Account;
(E) the registration of the Preferred Securities under the
Securities Act of 1933, as amended, and under state securities or
blue sky laws, and the qualification of this Trust Agreement as a
trust indenture under the Trust Indenture Act;
(F) the listing of the Preferred Securities upon such
securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under
the Exchange Act, and the preparation and filing of all notices
and periodic and other reports and other documents pursuant to
the foregoing;
(G) the appointment of a Paying Agent, a Transfer Agent and
a Registrar in accordance with this Trust Agreement;
(H) the registration of transfers of the Trust Securities
in accordance with this Trust Agreement;
(I) the winding up of the affairs of and liquidation of the
Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State of the
State of Delaware in accordance with this Trust Agreement;
(J) the performance of their obligations under this Trust
Agreement; and
(K) the taking of any action incidental to the foregoing as
the Administrative Trustees may from time to time determine is
necessary or advisable to protect and conserve the Trust Property
for the benefit of the Securityholders (without consideration of
the effect of any such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following ministerial matters:
(A) the establishment and maintenance of the Payment
Account;
(B) the receipt of the Debentures;
(C) the deposit of interest, principal and any other
payments made in respect of the Debentures in the Payment
Account;
(D) the distribution of amounts owed to the Securityholders
in respect of the Trust Securities in accordance with the terms
of this Trust Agreement;
(E) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with the terms of this Trust
Agreement;
(F) the distribution of the Trust Property in accordance
with this Trust Agreement;
(G) the winding up of the affairs of and liquidation of the
Trust and the execution of the certificate of cancellation to be
prepared and filed by the Administrative Trustees with the
Secretary of State of the State of Delaware in accordance with
this Trust Agreement;
(H) the performance of its obligations under this Trust
Agreement; and
(I) the taking of any ministerial action incidental to the
foregoing as the Property Trustee may from time to time determine
is necessary or advisable to protect and conserve the Trust
Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder).
Subject to this Section 2.05(a)(ii), the Property Trustee shall have none
of the duties, powers or authority of the Administrative Trustee set forth
in Section 2.05(a)(i) or the Depositor set forth in Section 2.05(c). The
Property Trustee shall have the power and authority to exercise all of the
rights, powers and privileges of a holder of Debentures under the
Subordinated Indenture, and, if an Event of Default occurs and is
continuing, the Property Trustee may, for the benefit of Holders of the
Trust Securities, in its discretion proceed to protect and enforce its
rights as holder of the Debentures subject to the rights of the Holders
pursuant to the terms of this Trust Agreement.
(b) Neither the Trust nor any Trustee acting on behalf of the
Trust shall undertake any business, activities or transaction except as
expressly provided herein or contemplated hereby. In particular, the
Trustees shall not (i) acquire any investments or engage in any activities
not authorized by this Trust Agreement, (ii) sell, assign, transfer,
exchange, pledge, set-off or otherwise dispose of any of the Trust Property
or interests therein, including to Securityholders, except as expressly
provided herein, (iii) take any action that would cause the Trust to fail
or cease to qualify as a "grantor trust" for United States Federal income
tax purposes, (iv) incur any indebtedness for borrowed money or (v) take or
consent to any action that would result in the placement of a Lien on any
of the Trust Property. The Trustees shall defend all claims and demands of
all Persons at any time claiming any Lien on any of the Trust Property
adverse to the interest of the Trust or the Securityholders in their
capacity as Securityholders.
(c) In connection with the issuance of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust
with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the
Closing Date are hereby ratified and confirmed in all respects):
(i) the preparation, execution and the filing by the Trust
with the Commission of a registration statement on Form S-3 in
relation to the Preferred Securities, including any amendments
thereto;
(ii) the determination of the states or jurisdictions in
which to take appropriate action to qualify or register for sale
all or part of the Preferred Securities and the performance of
any and all such acts, other than actions which must be taken by
or on behalf of the Trust, and the advising of the Trustees of
actions they must take on behalf of the Trust, and the
preparation, execution and filing of any documents to be executed
and filed by the Trust or on behalf of the Trust, as the
Depositor deems necessary or advisable in order to comply with
the applicable laws of any such state or jurisdiction;
(iii) the preparation, execution and the filing by the
Trust of an application to The New York Stock Exchange, any other
national stock exchange or the Nasdaq National Market for listing
upon notice of issuance of the Preferred Securities and the
filing thereafter of such notifications and documents as may be
necessary from time to time to maintain such listing;
(iv) the preparation, execution and the filing by the Trust
with the Commission of a registration statement on Form 8-A, and
any amendments thereto, relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act;
(v) the selection of the investment banker or bankers to
act as underwriters with respect to the offer and sale by the
Trust of the Preferred Securities and the negotiation of the
terms of the Underwriting Agreement providing for such offer; and
(vi) any other actions necessary or desirable to carry out
any of the foregoing activities;
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs
of the Trust and to operate the Trust so that the Trust will not be deemed
to be an "investment company" required to be registered under the
Investment Company Act, or classified other than as a "grantor trust" for
United States Federal income tax purposes and so that the Debentures will
be treated as indebtedness of the Depositor for United States Federal
income tax purposes. In this connection, the Depositor and the
Administrative Trustees are authorized to take any action, not inconsistent
with applicable law or this Trust Agreement, that each of the Depositor and
the Administrative Trustees determines in its discretion to be necessary or
desirable for such purposes, as long as such action does not materially and
adversely affect the interests of the Holders of the Preferred Securities.
SECTION 2.06. ASSETS OF TRUST. The assets of the Trust shall
consist of the Trust Property.
SECTION 2.07. TITLE TO TRUST PROPERTY. Legal title to all Trust
Property shall be vested at all times in the Property Trustee and shall be
held and administered by the Property Trustee for the benefit of the
Securityholders in accordance with this Trust Agreement.
SECTION 2.08. ISSUANCE OF THE PREFERRED SECURITIES. On the
Closing Date, one of the Administrative Trustees, on behalf of the Trust,
shall execute and deliver in accordance with Section 5.01 and deliver in
accordance with the Underwriting Agreement Preferred Securities
Certificates, registered in the name of the nominee of The Depository Trust
Company, evidencing [ ] Preferred Securities having an aggregate
Liquidation Amount of $[ ] against receipt of the purchase price of
such Preferred Securities of $[ ], which amount such Administrative
Trustee shall promptly deliver to the Property Trustee.
SECTION 2.09. SUBSCRIPTION AND PURCHASE OF DEBENTURES; ISSUANCE
OF THE COMMON SECURITIES. On the Closing Date, the Administrative
Trustees, on behalf of the Trust, shall subscribe to and purchase from the
Depositor Debentures, registered in the name of the Property Trustee on
behalf of the Trust, in an aggregate principal amount of $[ ],
and, in satisfaction of the purchase price for such Debentures, (i) one of
the Administrative Trustees, on behalf of the Trust, shall execute and
deliver to the Depositor Common Securities Certificates, registered in the
name of the Depositor, evidencing [ ] Common Securities having an
aggregate Liquidation Amount of $[ ], and (ii) the Property Trustee,
on behalf of the Trust, shall deliver to the Depositor the sum of $[ ],
representing the proceeds from the sale of the Preferred Securities
pursuant to the Underwriting Agreement.
SECTION 2.10. RIGHTS OF SECURITYHOLDERS. The legal title to the
Trust Property is vested exclusively in the Property Trustee in accordance
with Section 2.07, and the Securityholders shall have neither right or
title therein other than an undivided beneficial interest in the assets of
the Trust conferred by their Trust Securities nor any right to call for any
partition or division of property, profits or rights of the Trust, except
as described below. The Trust Securities shall be personal property giving
only the rights specifically set forth therein and in this Trust Agreement.
The Preferred Securities shall have no preemptive rights. When issued and
delivered to Securityholders against payment of the purchase price
therefor, they will be fully paid and nonassessable by the Trust.
ARTICLE III.
PAYMENT ACCOUNT
SECTION 3.01. PAYMENT ACCOUNT. (a) On or prior to the Closing
Date, the Property Trustee shall establish the Payment Account. The
Property Trustee and the Paying Agent shall have exclusive control of the
Payment Account. All monies and other property deposited or held from time
to time in the Payment Account shall be held by the Property Trustee in the
Payment Account for the exclusive benefit of the Securityholders and for
distribution as herein provided.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held
in the Payment Account shall not be invested by the Property Trustee
pending distribution thereof.
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.01. DISTRIBUTIONS. (a) Distributions on the Trust
Securities shall be cumulative, and will accumulate whether or not there
are funds of the Trust available for the payment of Distributions.
Distributions shall accrue from and including , 199 , and, unless
---------- -
the interest payment period for the Debentures is extended pursuant to the
Subordinated Indenture, shall be payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year, commencing on
--------,
199 . If any date on which Distributions are otherwise payable on the
-
Trust Securities is not a Business Day, then the payment of such
Distribution shall 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, payment of such distribution shall be made on the immediately
preceding Business Day, in each case, with the same force and effect as if
made on such date (each date on which distributions are payable in
accordance with this Section 4.01(a) being herein referred to as a
"Distribution Date").
(b) Distributions payable on the Trust Securities shall be at
the fixed rate of % per annum of the Liquidation Amount of the Trust
---
Securities. Distributions on the Trust Securities will accrue from, and
including, the date of original issuance and will accrue to, and including
the first Distribution Date, and for each subsequent Distribution Date,
will accrue from, and excluding, the last Distribution Date through which
Distributions shall have been paid or duly provided for to, and including,
such Distribution Date. The amount of Distributions payable for any full
quarterly period shall be computed on the basis of twelve 30-day months and
a 360-day year and, for any period shorter than a full month, on the basis
of the actual number of days elapsed in such period. If the interest
payment period for the Debentures is extended pursuant to the Subordinated
Indenture, (i) Distributions on the Trust Securities will be deferred for
the period equal to the extension of the interest payment period for the
Debentures and (ii) Distributions on the Trust Securities shall be
increased by an amount such that the aggregate amount of Distributions that
accumulate on all Trust Securities during any such extended payment period
shall be equal to the aggregate amount of interest that accrues during any
such extended interest payment period on the Debentures. The amount of
Distributions payable for any period also shall include the Additional
Amounts, if any.
(c) Distributions on the Trust Securities shall be made and
shall be deemed payable on each Distribution Date only if the Trust has
funds immediately available in the Payment Account for the payment of such
Distributions.
(d) Subject to Section 5.10, (i) Distributions on the Trust
Securities with respect to a Distribution Date shall be payable to the
Holders thereof as they appear on the Securities Register on the record
date therefor, which shall be 15 days prior to such Distribution Date and
(ii) payments of Distributions in respect of the Preferred Securities shall
be made by check mailed to the address of the Person entitled thereto as
such address shall appear on the Securities Register. Payments in respect
of the Common Securities shall be made in such manner as shall be mutually
agreed between the Administrative Trustees and the Holder of the Common
Securities.
SECTION 4.02. REDEMPTION. (a) On each Debenture Redemption
Date and at the stated maturity of the Debentures, the Property Trustee
will be required to redeem a Like Amount of Trust Securities at the
Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee
by first-class mail, postage prepaid, mailed not less than 30 nor more than
60 days prior to the Redemption Date to each Holder of Trust Securities to
be redeemed, at such Holder's address appearing in the Security Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price to be paid on the Redemption Date;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are
to be redeemed, the identification and the total Liquidation
Amount of the particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be
redeemed and that Distributions thereon will cease to accrue on
and after said date.
(c) The Trust Securities to be redeemed on each Redemption Date
shall be redeemed with the proceeds from the contemporaneous redemption or
payment of Debentures. Redemptions of the Trust Securities shall be made
only if the Trust has funds immediately available in the Payment Account
for such payment.
(d) By 12:00 noon, New York time, on each Redemption Date, the
Property Trustee shall irrevocably deposit in the Payment Account
immediately available funds sufficient to pay the applicable Redemption
Price and shall give to the Paying Agent irrevocable instructions to pay
the Redemption Price to the Holders of the Trust Securities to be redeemed
on such date upon surrender of their Trust Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the
Securities Register for the Trust Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then on the Redemption Date all
rights of the Holders of the Trust Securities so called for redemption will
cease, except the right of such Holders to receive the Redemption Price,
but without interest thereon, and such Trust Securities will cease to be
outstanding. In the event that any Redemption Date is not a Business Day,
then payment of the Redemption Price payable on such date shall be made on
the next succeeding day which 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 Redemption Date. In the event that
payment of the Redemption Price in respect of any Trust Security called for
redemption is not paid either by the Trust or by the Depositor pursuant to
the Guarantee, Distributions on such Trust Security will continue to
accrue, at the then applicable rate, from the Redemption Date originally
established to the date on which such Redemption Price shall actually be
paid.
(e) Subject to Section 4.03(a), if less than all of the
Outstanding Trust Securities are to be redeemed on a Redemption Date, then
the aggregate Liquidation Amount of Trust Securities to be redeemed shall
be allocated 3% to the Common Securities and 97% to the Preferred
Securities. The particular Preferred Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Property
Trustee from the Outstanding Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of less
than all of the Preferred Securities represented by a Preferred Securities
Certificate. The Property Trustee shall promptly notify the Transfer Agent
and Registrar of the Preferred Securities Certificates representing
Preferred Securities selected for redemption and, in the case of any
Preferred Securities Certificate selected for partial redemption, the
number of Preferred Securities to be redeemed. For all purposes of this
Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Preferred Securities shall relate, in the
case of any Preferred Securities Certificates redeemed or to be redeemed
only in part, to those Preferred Securities which have been or are to be
redeemed.
SECTION 4.03. SUBORDINATION OF COMMON SECURITIES. (a) If on
any Distribution Date or Redemption Date any Event of Default resulting
from a Debenture Event of Default shall have occurred and be continuing, no
payment of any Distribution on, or of the Redemption Price of, any Common
Security shall be made.
(b) In the case of the occurrence of an Event of Default
resulting from a Debenture Event of Default, the Common Securityholder will
be deemed to have waived such Event of Default until the effect of such
Event of Default with respect to the Preferred Securities has been cured,
waived or otherwise eliminated. Until each such Event of Default with
respect to the Preferred Securities has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders
of the Preferred Securities, and only the Holders of the Preferred
Securities will have the right to direct the Property Trustee to act.
SECTION 4.04. TAX RETURNS AND REPORTS. The Administrative
Trustees shall prepare (or cause to be prepared), at the Depositor's
expense and direction, and file all United States Federal, state and local
tax and information returns and reports required to be filed by or in
respect of the Trust. The Administrative Trustees shall (a) prepare and
file (or cause to be prepared and filed) the Internal Revenue Service Form
1041 (or any successor form) required to be filed in respect of the Trust
in each taxable year of the Trust and (b) prepare and furnish (or cause to
be prepared and furnished) to each Securityholder the related Internal
Revenue Service Form 1099, or any successor form or the information
required to be provided on such form. The Administrative Trustees shall
provide the Depositor and the Property Trustee with a copy of all such
returns, reports and schedules promptly after such filing or furnishing.
The Trustees shall comply with United States Federal withholding and backup
withholding tax laws and information reporting requirements with respect to
any payments to Securityholders under the Trust Securities.
SECTION 4.05. PAYMENTS UNDER SUBORDINATED INDENTURE. Any amount
payable hereunder to any Holder of Preferred Securities shall be reduced by
the amount of any corresponding payment such Holder has directly received
pursuant to Section 808 of the Subordinated Indenture. The acceptance of a
Preferred Security or any interest therein by or on behalf of a Preferred
Securityholder shall be deemed to be an acknowledgment that any Holder of
Preferred Securities that receives payment under Section 808 of the
Subordinated Indenture may receive amounts greater than the amount such
Holder may be entitled to receive pursuant to the provisions of this Trust
Agreement.
ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 5.01. THE TRUST SECURITIES CERTIFICATES. The Trust
Securities Certificates shall be issued in denominations of $25 Liquidation
Amount and integral multiples thereof. The Trust Securities Certificates
shall be executed on behalf of the Trust by manual or facsimile signature
of at least one Administrative Trustee and, if executed on behalf of the
Trust by facsimile signature, countersigned by the Transfer Agent or its
agent. Trust Securities Certificates bearing the signatures of individuals
who were, at the time when such signatures shall have been affixed,
Administrative Trustees of the Trust, shall be validly issued and entitled
to the benefits of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be Administrative Trustees
prior to the delivery of such Trust Securities Certificates. Certificates
evidencing Trust Securities may be typewritten, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable
to the Administrative Trustees, as evidenced by the execution thereof by
the Administrative Trustees, or any one of them, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements as the Administrative 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 the Preferred Securities may be listed, or to
conform to usage.
SECTION 5.02. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR. On
the Closing Date, the Depositor shall acquire, and thereafter retain,
beneficial and record ownership of the Common Securities. Any attempted
transfer of the Common Securities (other than a transfer in connection with
a merger or consolidation of the Depositor pursuant to Section 1101 of the
Subordinated Indenture) shall be void. The Administrative Trustees shall
cause each Common Securities Certificate issued to the Depositor to contain
a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
SECTION 5.03. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED
SECURITIES CERTIFICATES. (a) The Registrar shall keep or cause to be
kept, at the office or agency maintained pursuant to Section 5.08, a
Securities Register in which, subject to such reasonable regulations as it
may prescribe, the Registrar shall provide for the registration of
Preferred Securities Certificates and the registration of transfers and
exchanges of Preferred Securities Certificates as herein provided. The
Bank of New York shall be the initial Registrar. The Securities Register
shall be open for inspection by the Administrative Trustees and the
Depositor at all reasonable times.
(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to
Section 5.08, any one of the Administrative Trustees, on behalf of the
Trust, shall execute by manual or facsimile signature, cause the Transfer
Agent or its agent to countersign (if executed on behalf of the Trust by
facsimile signature) and deliver (or cause the Transfer Agent to deliver),
in the name of the designated transferee or transferees, one or more new
Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount. At the option of a Holder, any Preferred
Securities Certificate may be exchanged for one or more new Preferred
Securities Certificates in authorized denominations and of a like aggregate
Liquidation Amount upon surrender of the Preferred Securities Certificates
to be exchanged at the office or agency maintained pursuant to Section
5.08.
(c) Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied
by a written instrument of transfer in form satisfactory to the
Administrative Trustees and the Transfer Agent duly executed by the Holder
or such Holder's attorney duly authorized in writing. The Trust shall not
be required to (i) issue, register the transfer of, or exchange any
Preferred Securities Certificate during a period beginning at the opening
of business 15 calendar days before the day of mailing of a notice of
redemption of any Preferred Securities called for redemption and ending at
the close of business on the day of such mailing or (ii) register the
transfer of or exchange any Preferred Securities Certificate so selected
for redemption, in whole or in part, except the unredeemed portion of any
such Preferred Securities Certificate being redeemed in part.
(d) No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the Transfer
Agent may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Preferred Securities Certificates.
SECTION 5.04. MUTILATED, DESTROYED, LOST OR STOLEN TRUST
SECURITIES CERTIFICATES. If any mutilated Trust Securities Certificate
shall be surrendered to the Transfer Agent, the Administrative Trustees or
any one of them shall execute by manual or facsimile signature, cause the
Transfer Agent to countersign and deliver (or cause the Transfer Agent to
deliver), in exchange for such mutilated Trust Security Certificate, a new
Trust Securities Certificate of like class, tenor and denomination. If (i)
the Transfer Agent shall receive evidence to its satisfaction of the
destruction, loss or theft of any Trust Securities Certificate and (ii)
there shall be delivered to the Transfer Agent and the Administrative
Trustees such security or indemnity as may be required by them to save each
of them and the Depositor harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide
purchaser, any one of the Administrative Trustees, on behalf of the Trust,
shall execute by manual or facsimile signature, cause the Transfer Agent to
countersign (if executed on behalf of the Trust by facsimile signature) and
deliver (or cause the Transfer Agent to deliver), in exchange for or in
lieu of any such destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under
this Section, the Administrative Trustees or the Transfer Agent may require
the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Trust
Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 5.05. CANCELLATION BY REGISTRAR. All Trust Securities
Certificates surrendered for payment, redemption, registration of transfer
or exchange shall, if surrendered to any Person other than the Registrar,
be delivered to the Registrar and, if not theretofore canceled, shall be
promptly canceled by the Registrar. No Trust Securities Certificates shall
be issued in lieu of or in exchange for any Trust Securities Certificates
canceled as provided in this Section, except as expressly permitted by this
Trust Agreement. All canceled Trust Securities Certificates held by the
Registrar shall be disposed of in accordance with customary practices.
SECTION 5.06. PERSONS DEEMED SECURITYHOLDERS. Prior to due
presentation of a Preferred Securities Certificate for registration of
transfer, the Trustees and the Registrar shall be entitled to treat the
Person in whose name any Preferred Securities Certificate shall be
registered in the Securities Register as the Holder of such Preferred
Securities Certificate for the purpose of receiving Distributions and for
all other purposes whatsoever, and neither the Trustee nor the Registrar
shall be bound by any notice to the contrary.
SECTION 5.07. LIST OF SECURITYHOLDERS. Semiannually, not later
than June 1 and December 1 in each year, commencing June 1, 1997, and at
such other times as the Property Trustee may request in writing, the
Depositor or the Administrative Trustees shall furnish or cause to be
furnished to the Property Trustee information as to the names and addresses
of the Holders, and the Property 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
Property Trustee shall be the Registrar.
SECTION 5.08. MAINTENANCE OF OFFICE OR AGENCY. The
Administrative Trustees shall maintain in the Borough of Manhattan, The
City of New York, an office or offices or agency or agencies where
Preferred Securities Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustees
in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate The Bank of New York, 101
Barclay Street, Floor 21 West, New York, New York 10286 at its principal
corporate trust office for such purposes. The Administrative Trustees
shall give prompt written notice to the Depositor and to the
Securityholders of any change in the location of the Securities Register or
any such office or agency.
SECTION 5.09. APPOINTMENT OF PAYING AGENT. The Paying Agent
shall make Distributions to Securityholders from the Payment Account and
shall report the amounts of such Distributions to the Administrative
Trustees and the Property Trustee. Any Paying Agent shall have the
revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions. The Property Trustee shall be entitled to
rely upon a certificate of the Paying Agent stating in effect the amount of
such funds so to be withdrawn and that same are to be applied by the Paying
Agent in accordance with this Section 5.09. The Administrative Trustees or
any one of them may revoke such power and remove the Paying Agent in their
or its sole discretion. The Paying Agent shall initially be The Bank of
New York, and it may choose any co-Paying Agent that is acceptable to the
Administrative Trustees and the Depositor. Any Paying Agent may resign
upon 30 days' written notice to the Administrative Trustees and the
Depositor. In the event that The Bank of New York shall no longer be the
Paying Agent, the Administrative Trustees or any one of them shall appoint
a successor (which shall be a bank or trust company) that is acceptable to
the Property Trustee and the Depositor to act as Paying Agent. The
Administrative Trustees or any one of them shall cause such successor
Paying Agent or any co-Paying Agent appointed to execute and deliver to the
Trustees an instrument in which such Paying Agent shall agree with the
Trustees that such Paying Agent will hold all sums, if any, held by it for
payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. Each Paying Agent shall return all unclaimed funds to the
Property Trustee, and upon resignation or removal of a Paying Agent such
Paying Agent shall also return all other funds in its possession to the
Property Trustee. The provisions of Sections 8.01 through 8.06 shall apply
to each Paying Agent appointed hereunder.
SECTION 5.10. BOOK-ENTRY SYSTEM. (a) The Administrative
Trustees, at the direction and expense of the Depositor, may from time to
time appoint a Securities Depository or a successor thereto and enter into
a letter of representations or other agreement with such Securities
Depository to establish procedures with respect to the Preferred
Securities. Any Securities Depository shall be a Clearing Agency.
(b) The Depositor and the Trustees covenant and agree to meet
the requirements of a Securities Depository for the Preferred Securities
with respect to required notices and other provisions of the letter of
representations or agreement executed with respect to such Preferred
Securities.
(c) Whenever the beneficial ownership of any Preferred
Securities is determined through the books of a Securities Depository, the
requirements in this Trust Agreement of holding, delivering or
transferring, and making payments in respect of, such Preferred Securities
shall be deemed modified with respect to such Preferred Securities to meet
the requirements of the Securities Depository with respect to actions of
the Trustees, the Depositor and the Paying Agent. Any provisions hereof
permitting or requiring delivery of such Preferred Securities shall, while
such Preferred Securities are in a book-entry system, be satisfied by the
notation on the books of the Securities Depository in accordance with
applicable state law.
(d) After a Debenture Event of Default, the Holders of a
majority in Liquidation Preference of the Preferred Securities may
determine to discontinue the use of the book-entry system for the Preferred
Securities.
ARTICLE VI.
VOTING; MEETINGS; ACTIONS TO ENFORCE RIGHTS
SECTION 6.01. VOTING RIGHTS; LIMITATIONS THEREOF. (a)
Securityholders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.
(b) Except as provided in this Section 6.01, Section 10.03 and
as otherwise required by law, no Holder of Preferred Securities shall have
any right to vote or in any manner otherwise control the administration,
operation and management of the Trust or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of
the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(c) So long as any of the Debentures are held by the Property
Trustee, the Property Trustee shall not (i) direct the time, method and
place of conducting any proceeding for, or taking any other action relating
to, any remedy available to the Debenture Trustee, or executing any trust
or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 813
of the Subordinated Indenture, (iii) exercise any right to rescind or annul
a declaration that the principal of all the Debentures shall be due and
payable or (iv) consent to any amendment, modification or termination of
the Subordinated Indenture or the Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the
Holders of at least 33% in aggregate Liquidation Amount of the Outstanding
Preferred Securities; provided, however, that where a consent under the
Subordinated Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each Holder of Preferred
Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Preferred Securities, except
pursuant to a subsequent vote of the Preferred Securities. The Property
Trustee shall notify all Holders of the Preferred Securities of any notice
of default received from the Debenture Trustee with respect to the
Debentures. In addition to obtaining the foregoing approvals of the
Preferred Securities, prior to taking any of the foregoing actions, the
Property Trustee shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the contemplated
action will not cause the Trust to fail to be classified as a "grantor
trust" for United States Federal income tax purposes on account of such
action.
SECTION 6.02. PURPOSE FOR WHICH MEETINGS MAY BE CALLED. A
meeting of Securityholders of one or more, or all, series 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 Trust Agreement to be made, given or taken
by Securityholders. No annual meeting of Securityholders is required to be
held.
SECTION 6.03. CALL, NOTICE AND PLACE OF MEETINGS. (a) The
Administrative Trustees may at any time call a meeting of Securityholders
for any purpose specified in Section 6.02, to be held at such time and at
such place in the Borough of Manhattan, The City of New York, or any other
place, as the Administrative Trustees shall determine. 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 1.06, not less than 21 nor more
than 180 days prior to the date fixed for the meeting.
(b) If the Administrative Trustees shall have been requested to
call a meeting of the Securityholders by the Common Securityholder or by
the Holders of 33% in aggregate Liquidation Amount of Preferred Securities
for any purpose specified in Section 6.02, by written request setting forth
in reasonable detail the action proposed to be taken at the meeting, and
the Administrative Trustees shall not have given the notice of such meeting
within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Common
Securityholder or the Holders of Preferred Securities of the amount above
specified, as the case may be, 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 Administrative Trustees, 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 Securityholders shall be valid without notice
if the Holders of all Outstanding Trust Securities are present in person or
by proxy and the Administrative Trustees are present, or if notice is
waived in writing before or after the meeting by the Holders of all
Outstanding Trust Securities, or by such of them as are not present at the
meeting in person or by proxy, and by the Administrative Trustees.
SECTION 6.04. PERSONS ENTITLED TO VOTE AT MEETINGS. To be
entitled to vote at any meeting of Securityholders a Person shall be (a) a
Holder of one or more Outstanding Preferred Securities, or (b) a Person
appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Preferred Securities by such Holder or Holders.
The only Persons who shall be entitled to attend any meeting of
Securityholders shall be the Persons entitled to vote at such meeting and
their counsel, the Administrative Trustees, any representatives of the
Property Trustee and its counsel and any representatives of the Depositor
and its counsel.
SECTION 6.05. QUORUM; ACTION. (a) The Persons entitled to vote
a majority in aggregate Liquidation Amount of the Outstanding Preferred
Securities shall constitute a quorum for a meeting of Securityholders;
provided, however, that if any action is to be taken at such meeting which
this Trust Agreement expressly provides may be taken by the Holders of a
specified percentage, which is less than a majority in aggregate
Liquidation Amount of the Outstanding Preferred Securities, the Persons
entitled to vote such specified percentage in Liquidation Amount of the
Outstanding Preferred Securities 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 Preferred
Securities, 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
6.06(e), notice of the reconvening of any meeting adjourned for more than
30 days shall be given as provided in Section 6.03(a) not less than 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 aggregate Liquidation Amount of the
Outstanding Preferred Securities which shall constitute a quorum.
(b) Except as limited by Section 10.03, 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 Liquidation Amount of the Outstanding
Preferred Securities; provided, however, that, except as so limited, 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 aggregate Liquidation Amount of the Outstanding
Preferred Securities, 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 aggregate
Liquidation Amount of the Outstanding Preferred Securities.
(c) Any resolution passed or decision taken at any meeting of
Securityholders duly held in accordance with this Section shall be binding
on all Securityholders, whether or not present or represented at the
meeting.
SECTION 6.06. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING
RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS. (a) Attendance at meetings
of Securityholders 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 Trust Securities with respect to which it was
given unless and until specifically revoked by the Holder or future Holder
of such Securities before being voted (except as provided in Section
104(g)).
(b) Notwithstanding any other provisions of this Trust
Agreement, the Administrative Trustees may make such reasonable regulations
as they may deem advisable for any meeting of Securityholders in regard to
proof of the holding of such Preferred 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, the holding of Trust Securities and the
appointment of any proxy shall be proved in the manner specified in Section
1.04. 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 1.04 or other proof.
(c) The Administrative Trustees shall, by an instrument in
writing, appoint a temporary chairman of the meeting, unless the meeting
shall have been called by the Common Securityholder or by Preferred
Securityholders as provided in Section 6.03, in which case the Common
Securityholder or the Preferred Securityholders 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
Liquidation Amount of the Outstanding Preferred Securities represented at
the meeting.
(d) No vote shall be cast or counted at any meeting in respect
of any Preferred 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 Trust Security or
proxy.
(e) Any meeting duly called pursuant to Section 6.03 at which a
quorum is present may be adjourned from time to time by Persons entitled to
vote a majority in aggregate Liquidation Amount of the Outstanding
Preferred Securities; and the meeting may be held as so adjourned without
further notice.
SECTION 6.07. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Securityholders
shall be by written ballots on which shall be subscribed the signatures of
the Securityholders or of their representatives by proxy and the
Liquidation Amounts and serial numbers of the Outstanding Trust Securities
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 of the proceedings of each meeting of
Securityholders shall be prepared by the secretary of the meeting and there
shall be attached to said 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 said notice was given as provided in Section
6.03. 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 Depositor, and another to the Property Trustee to be
preserved by the Property 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 6.08. ACTION WITHOUT MEETING. In lieu of a vote of
Securityholders 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 Securityholders by written
instruments as provided in Section 1.04.
SECTION 6.09. INSPECTION OF RECORDS. Subject to Section 5.07
concerning access to the list of Securityholders, upon reasonable notice to
the Administrative Trustees and the Property Trustee, the records of the
Trust shall be open to inspection by any Securityholder during normal
business hours for any purpose reasonably related to such Securityholder's
interest as a Securityholder.
SECTION 6.10. ACTIONS TO ENFORCE RIGHTS. (a) If the Property
Trustee should fail to enforce its rights against the Depositor under the
Debentures or this Trust Agreement, a Holder of Preferred Securities may
institute a legal proceeding, to the fullest extent permitted by law,
directly against the Depositor to enforce the Property Trustee's rights
under the Debentures or this Trust Agreement, without first instituting any
legal proceeding against the Property Trustee or any other person. A
Holder of Preferred Securities also may directly institute a proceeding for
enforcement of payment to such Holder directly of principal of or interest
on the Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Preferred Securities of such Holder on or after
the due dates specified in the Debentures. In connection with any such
proceeding, the Depositor will be subrogated to the rights of any Holder of
Preferred Securities to the extent of any payment made by the Depositor to
such Holder.
(b) So long as any Preferred Securities remain Outstanding, if,
upon a Debenture Event of Default, the Debenture Trustee fails, or the
holders of not less than 33% in principal amount of the outstanding
Debentures fail, to declare the principal of all of the Debentures to be
immediately due and payable, the Holders of at least 33% in Liquidation
Amount of the Preferred Securities then Outstanding shall have such right
by a notice in writing to the Depositor and the Debenture Trustee; and upon
any such declaration such principal amount of and the accrued interest on
all of the Debentures shall become immediately due and payable.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF THE PROPERTY
TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 7.01. PROPERTY TRUSTEE. The Property Trustee hereby
represents and warrants for the benefit of the Depositor and the
Securityholders that:
(i) the Property Trustee is a banking corporation or trust
company duly organized, validly existing and in good standing under the
laws of the State of New York;
(ii) the Property Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this
Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(iii) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and constitutes the valid and legally
binding agreement of the Property Trustee enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(iv) the execution, delivery and performance by the Property
Trustee of this Trust Agreement will not violate, conflict with or
constitute a breach of the Property Trustee's charter or by-laws; and
(v) neither the authorization, execution or delivery by the
Property Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein require the
consent or approval of, the giving of notice to, the registration with or
the taking of any other action with respect to any governmental authority
or agency under any existing Federal or New York law governing the banking
or trust powers of the Property Trustee.
SECTION 7.02. DELAWARE TRUSTEE. The Delaware Trustee represents
and warrants for the benefit of the Depositor and the Securityholders that:
(i) the Delaware Trustee is a banking corporation or trust
company duly organized, validly existing and in good standing under the
laws of the State of Delaware;
(ii) the Delaware Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this
Trust Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Trust Agreement;
(iii) this Trust Agreement has been duly authorized, executed
and delivered by the Delaware Trustee and constitutes the valid and legally
binding agreement of the Delaware Trustee enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(iv) the execution, delivery and performance by the Delaware
Trustee of this Trust Agreement will not violate the Delaware Trustee's
charter or by-laws; and
(v) neither the authorization, execution or delivery by the
Delaware Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware Trustee contemplated herein require the
consent or approval of, the giving of notice to, the registration with or
the taking of any other action with respect to any governmental authority
or agency under any existing Federal or Delaware law governing the banking
or trust powers of the Delaware Trustee.
ARTICLE VIII.
THE TRUSTEES
SECTION 8.01. CERTAIN DUTIES AND RESPONSIBILITIES. (a) The
duties and responsibilities of the Trustees shall be restricted to those
set forth in the express provisions of this Trust Agreement and, in the
case of the Property Trustee, as provided in the Trust Indenture Act, and
no implied covenants or obligations shall be read into this Trust Agreement
against any of the Trustees. No provision of this Trust Agreement 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. Notwithstanding anything contained in this Trust Agreement to the
contrary, the duties and responsibilities of the Property Trustee under
this Trust Agreement shall be subject to the protections, exculpations and
limitations on liability afforded to the Property Trustee under this Trust
Agreement, the Trust Indenture Act, the Delaware Business Trust Act and, to
the extent applicable, Rule 3a-7 under the Investment Company Act, or any
successor rule thereunder. Whether or not therein expressly so provided,
every provision of this Trust Agreement relating to the conduct or
affecting the liability of or affording protection to the Trustees shall be
subject to the provisions of this Section.
(b) All payments made by the Property Trustee or a Paying Agent
in respect of the Trust Securities shall be made only from the income and
proceeds from the Trust Property and only to the extent that there shall be
sufficient income or proceeds from the Trust Property to enable the
Property Trustee or Paying Agent to make payments in accordance with the
terms hereof. Each Securityholder, 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 8.01(b) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust Indenture
Act.
(c) All duties and responsibilities of the Property Trustee
contained in this Trust Agreement are subject to the following:
(i) the Property 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 Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement, the
Trust Indenture Act, the Delaware Business Trust Act and, to the
extent applicable, Rule 3a-7 under the Investment Company Act;
(ii) the Property 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;
(iii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree with the Depositor. Money held by the Property Trustee
need not be segregated from other funds held by it except in
relation to the Payment Account established by the Property
Trustee pursuant to this Trust Agreement and except to the extent
otherwise required by law; and
(iv) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust
Agreement, nor shall the Property Trustee be liable for the
default or misconduct of the Administrative Trustees or the
Depositor.
(d) No Administrative Trustee shall be liable for any act or
omission to act hereunder, except for his or her own gross negligence or
willful misconduct.
SECTION 8.02. CERTAIN NOTICES. (a) Within five Business Days
after the occurrence of any Event of Default known to the Property Trustee,
the Property Trustee shall give notice of such Event of Default to the
Securityholders in the manner and to the extent provided in Section 1.06,
unless such Event of Default shall have been cured or waived; provided,
however, that in the case of any default of the character specified in
clause (iv) of the definition of Event of Default, no such notice to
Holders shall be given until at least 45 days after the occurrence thereof.
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.
(b) Within Five Business Days after receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Subordinated Indenture, an Administrative
Trustee shall transmit, in the manner and to the extent provided in
Sections 1.05 and 1.06, notice of such exercise to the Securityholders and
the Property Trustee.
SECTION 8.03. CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to
the provisions of Section 8.01 and to the applicable provisions of the
Trust Indenture Act:
(i) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, 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;
(ii) any request or direction of the Depositor mentioned
herein shall be sufficiently evidenced by a written request or
order signed with the name of the Depositor by an Authorized
Officer and delivered to the Property Trustee, or as otherwise
expressly provided herein, and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(iii) whenever in the administration of this Trust
Agreement the Property Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Property Trustee (unless other
evidence be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officer's Certificate;
(iv) the Property 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;
(v) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any Securityholder
pursuant to this Trust Agreement, unless such Securityholder
shall have offered to the Property Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;
(vi) the Property 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 or
other evidence of indebtedness or other paper or document, but
the Property Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit, and, if the Property 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 Depositor,
personally or by agent or attorney;
(vii) the Property 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 Property
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 Property 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
Trust Agreement, except for any such action taken, suffered or
omitted to be taken due to the gross negligence or willful
misconduct of the Property Trustee;
(ix) the Property 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
Property 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 Property Trustee by the
Depositor, the Administrative Trustees or by any Securityholder;
(x) no provision of this Trust Agreement shall be deemed to
impose any duty or obligation on the Property 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 Property 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 Property Trustee shall be construed to be a
duty;
(xi) the Property 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);
(xii) the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this
Trust Agreement from any court of competent jurisdiction; and
(xiii) whenever in the administration of this Trust
Agreement the Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder the Property Trustee (a) may
request instructions from the Securityholders, which instructions
may only be given by the Holders of the same amount of the Trust
Securities as would be entitled to direct the Property Trustee
under the terms of this Trust Agreement 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 8.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES. The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Trust, and the
Trustees do not assume any responsibility for their correctness. The
Trustees make no representations as to the title to, or value or condition
of, the property of the Trust or any part thereof, nor as to the validity
or sufficiency of this Trust Agreement or the Trust Securities. The
Trustees shall not be accountable for the use or application by the Trust
of the proceeds of the sale of the Trust Securities in accordance with
Section 2.09.
SECTION 8.05. MAY HOLD SECURITIES. Any Trustee or any agent of
any Trustee or the Trust, in its individual or any other capacity, may
become the owner or pledgee of Trust Securities and, subject to Sections
8.08 and 8.13, may otherwise deal with the Trust with the same rights it
would have if it were not a Trustee or such agent.
SECTION 8.06. COMPENSATION; FEES; INDEMNITY. (a) The Depositor
shall:
(i) pay to the Trustees from time to time reasonable
compensation for all services rendered by the Trustees hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, reimburse
the Trustees upon request for all reasonable expenses, disbursements
and advances reasonably incurred or made by the Trustees in accordance
with any provision of this Trust Agreement (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 as may be attributable to its negligence (gross negligence, in
the case of any Administrative Trustee), bad faith or willful
misconduct; and
(iii) indemnify each Trustee for, and to hold each Trustee
harmless against, any and all loss, damage, claims, liability or
expense incurred by it, arising out of or in connection with the
acceptance or administration of this Trust Agreement, 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 that any such
expense, disbursement or advance as may be attributable to its
negligence (gross negligence, in the case of any Administrative
Trustee), bad faith or willful misconduct; and
(b) As security for the performance of the obligations of the
Depositor under this Section, each of the Trustees shall have a lien prior
to the Trust Securities upon all property and funds held or collected by
such Trustee as such, except funds held in trust for the payment of
Distributions on the Trust Securities.
(c) In addition to the rights provided to each Trustee pursuant
to the provisions of the paragraph (b) of this Section 806, when a Trustee
incurs expenses or renders services in connection with an Event of Default
resulting from a Bankruptcy Event with respect to the Trust, the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency
or other similar law.
(d) The provisions of this Section shall survive the termination
of this Trust Agreement.
SECTION 8.07. CERTAIN TRUSTEES REQUIRED; ELIGIBILITY. (a) There
shall at all times be a Property Trustee hereunder with respect to the
Trust Securities. The Property Trustee shall be a Person that has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person
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 Property
Trustee with respect to the Trust Securities 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
VIII.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each
Administrative 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 persons
authorized to bind such entity.
(c) There shall at all times be a Delaware Trustee with respect
to the Trust Securities. The Delaware Trustee shall either be (i) a
natural person who is at least 21 years of age and a resident of the State
of Delaware or (ii) a legal entity with its principal place of business in
the State of Delaware that otherwise meets the requirements of applicable
Delaware law and that shall act through one or more persons authorized to
bind such entity.
SECTION 8.08. CONFLICTING INTERESTS. If the Property Trustee
shall have or shall acquire a 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
Trust Agreement. The Subordinated Indenture and the Guarantee Agreement
shall be deemed to be specifically described in this Trust Agreement for
the purposes of clause (i) of the first proviso contained in Section 310(b)
of the Trust Indenture Act.
SECTION 8.09. CO-TRUSTEES AND SEPARATE TRUSTEE. (a) Unless an
Event of Default shall have occurred and be continuing, at any time or
times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Property Trustee
shall have power to appoint, and upon the written request of the Property
Trustee or the Holders of at least 33% of the aggregate Liquidation Amount
of Outstanding Preferred Securities, the Depositor shall for such purpose
join with the Property Trustee in the execution, delivery, and performance
of all instruments and agreements necessary or proper to appoint, one or
more Persons approved by the Property Trustee either to act as co-trustee,
jointly with the Property Trustee, of all or any part of such Trust
Property, or to act as separate trustee of any such property, in either
case with such powers as may be provided in the instrument of appointment,
and to vest in such Person or Persons in the capacity aforesaid, any
property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Depositor does not join in
such appointment within 15 days after the receipt by it of a request so to
do, or in case a Debenture Event of Default has occurred and is continuing,
the Property Trustee alone shall have power to make such appointment.
(b) Should any written instrument from the Depositor be required
by any co-trustee or separate trustee so appointed for more fully
confirming to such co-trustee or separate trustee such property, title,
right, or power, any and all such instruments shall, on request, be
executed, acknowledged, and delivered by the Depositor.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms, namely:
(i) The Trust Securities shall be executed and delivered
and all rights, powers, duties, and obligations hereunder in
respect of the custody of securities, cash and other personal
property held by, or required to be deposited or pledged with,
the Trustees designated for such purpose hereunder, shall be
exercised, solely by such Trustees.
(ii) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed by the Property Trustee
or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any
particular act is to be performed, the Property Trustee shall be
incompetent or unqualified to perform such Act, in which event
such rights, powers, duties, and obligations shall be exercised
and performed by such co-trustee or separate trustee.
(iii) The Property Trustee at any time, by an instrument
in writing executed by it, with the written concurrence of the
Depositor, may accept the resignation of or remove any co-trustee
or separate trustee appointed under this Section 8.09, and, in
case a Debenture Event of Default has occurred and is continuing,
the Property Trustee shall have power to accept the resignation
of, or remove, any such co-trustee or separate trustee without
the concurrence of the Depositor. Upon the written request of
the Property Trustee, the Depositor shall join with the Property
Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the
manner provided in this Section.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the
Trustee, or any other such trustee hereunder.
(v) The Property Trustee shall not be liable by reason of
any act of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee
and separate trustee.
SECTION 8.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of any 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
requirements of Section 8.11.
(b) Any Trustee may resign at any time with respect to the Trust
Securities by giving written notice thereof to the Securityholders. If the
instrument of acceptance by a successor Trustee required by Section 8.11
shall not have been delivered to the Trustee within 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 Trust Securities.
(c) Unless an Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If an Event of Default shall have occurred and be
continuing, any Trustee may be removed at such time by Act of the Holders
of a majority in aggregate Liquidation Amount of the Outstanding Preferred
Securities, delivered to such Trustee (in its individual capacity and on
behalf of the Trust).
(d) If a Trustee shall resign, be removed or become incapable of
continuing to act as Trustee at a time when no Event of Default shall have
occurred and be continuing, the Common Securityholder, by Act of the Common
Securityholder delivered to such Trustee, shall promptly appoint a
successor Trustee, and the Trustee so succeeded shall comply with the
applicable requirements of Section 8.11. If any Trustee shall resign, be
removed or become incapable of continuing to act as Trustee at a time when
an Event of Default shall have occurred and be continuing, the Preferred
Securityholders, by Act of the Holders of a majority in aggregate
Liquidation Amount of the Outstanding Preferred Securities delivered to
such Trustee, shall promptly appoint a successor Trustee, and the Trustee
so succeeded shall comply with the applicable requirements of Section 8.11.
If no successor Trustee shall have been so appointed by the Securityholders
and accepted appointment in the manner required by Section 8.11, any
Securityholder who has been a Securityholder for at least six months may,
on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(e) A retiring Trustee shall give notice thereof and of the
appointment of its successor Trustee to all Securityholders in the manner
provided in Section 1.06 and shall give notice to the Depositor. Each
notice shall include the name and address of the successor Trustee with
respect to the Trust Securities and the Trust and, in the case of the
Property Trustee, the address of its Corporate Trust Office.
(f) Notwithstanding the foregoing or any other provision of this
Trust Agreement, (i) in the event any Administrative Trustee or a Delaware
Trustee who is a natural person dies or becomes incompetent or
incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (A) the unanimous act of remaining
Administrative Trustees if there are at least two of them or (B) otherwise
by the Depositor (with the successor in each case being an individual or a
corporation which satisfies the eligibility requirement for Administrative
Trustees or Delaware Trustee, as the case may be, set forth in Section
8.07); and (ii), in the event the Depositor reasonably believes that any
Administrative Trustee who is a natural person has become incompetent or
incapacitated, the Depositor, by notice to the remaining Trustees, may
terminate the status of such person as an Administrative Trustee (in which
case the vacancy so created will be filled in accordance with the preceding
clause).
SECTION 8.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In
case of the appointment hereunder of a successor Trustee, the successor
Trustee shall execute, acknowledge and deliver to the Trust and to the
retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective
and the successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Depositor or the successor
Trustee, the retiring Trustee shall, upon payment of its expenses by the
Depositor, execute and deliver an instrument transferring to the successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to the successor Trustee all property and
money held by the retiring Trustee hereunder, subject, nevertheless, to the
retiring Trustee's prior lien provided for in Section 8.06.
(b) In case of the appointment hereunder of a successor Trustee,
the retiring Trustee and the successor Trustee shall execute and deliver an
amendment hereto wherein the successor Trustee shall accept such
appointment and which shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, the successor
Trustee all the rights, powers, trusts and duties of the retiring Trustee.
(c) Upon request of any successor Trustee, the retiring Trustee
shall execute any and all instruments for more fully and certainly vesting
in and confirming to the successor Trustee all such rights, powers and
trusts referred to in the first or second preceding paragraph, as the case
may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance the successor Trustee shall be qualified and
eligible under this Article VIII.
SECTION 8.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any Person into which the Property Trustee or the Delaware
Trustee or any Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any Person resulting
from any merger, conversion or consolidation to which such Trustee shall be
a party, or any Person succeeding to all or substantially all the corporate
trust business of such Trustee, shall be the successor of such Trustee
hereunder, provided such Person shall be otherwise qualified and eligible
under this Article VIII, without the execution or filing of any paper or
any further act on the part of any of the parties hereto.
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
DEPOSITOR OR TRUST. If the Property Trustee shall be or become a creditor
of the Trust, the Depositor or any other obligor upon the Trust Securities
or the Debentures (other than by reason of a relationship described in
Section 311(b) of the Trust Indenture Act), the Property Trustee shall be
subject to any and all applicable provisions of the Trust Indenture Act
regarding the collection of claims against the Trust, the Depositor or such
other obligor. For purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Depositor 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 Depositor arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
SECTION 8.14. REPORTS BY PROPERTY TRUSTEE, TRUST AND DEPOSITOR.
Not later than July 31 in each year, commencing July 31, 1997, the Property
Trustee shall transmit to the Holders and the Commission a report, dated as
of the next preceding May 31 with respect to any events and other matters
described in Section 313(a) of the Trust Indenture Act, in such manner and
to the extent required by the Trust Indenture Act. The Property Trustee
shall transmit to the Holders and the Commission, and the Depositor and the
Administrative Trustees, on behalf of the Trust, shall file with the
Property Trustee (within 30 days after filing with the Commission in the
case of reports which pursuant to the Trust Indenture Act must be filed
with the Commission and furnished to the Property Trustee) and transmit to
the Holders, such other information, reports and other documents, if any,
at such times and in such manner, as shall be required by the Trust
Indenture Act.
SECTION 8.15. NUMBER OF TRUSTEES. (a) The number of Trustees
shall be five, provided that the Depositor, by written instrument, may
increase or decrease the number of Administrative Trustees.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to this Section
8.15, or if the number of Trustees is increased pursuant to this Section
8.15, the vacancy shall be filled with a Trustee appointed in accordance
with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not
operate to annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10,
the Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.16. DELEGATION OF POWER. (a) Any Administrative
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 2.05(a),
including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate
from time to time to such of their number the doing of such things and the
execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative 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 8.17. 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 Trust Agreement shall not
be liable to the Trust or to any other Covered Person for its good faith
reliance on the provisions of this Trust Agreement. The provisions of this
Trust Agreement, 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 Property 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, and subject to
the provisions of the Trust Indenture Act:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and the Trust or any Covered
Person; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein 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 Securityholder, 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 terms so
made, taken or provided by the Indemnified Person shall not
constitute a breach of this Trust Agreement or any other
agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise; and
(c) Unless otherwise expressly provided herein, and subject to
the provisions of the Trust Indenture Act, whenever in this Trust Agreement
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,
to the extent permitted by applicable law, shall not be subject
to any other or different standard.
ARTICLE IX.
TERMINATION AND LIQUIDATION
SECTION 9.01. TERMINATION UPON EXPIRATION DATE. The Trust shall
automatically terminate on the Expiration Date, if not terminated prior to
such date pursuant to Section 9.02, and, thereupon, the Property Trustee
shall liquidate the Trust in accordance with Section 9.04.
SECTION 9.02. EARLY TERMINATION. Upon the first to occur of
(such first occurrence an "Early Termination Event"):
(i) a Bankruptcy Event or the dissolution or liquidation of
the Depositor;
(ii) the redemption of all of the Preferred Securities;
(iii) the receipt by the Property Trustee of a written
direction from the Depositor to terminate the Trust (which
direction may be given at any time and is wholly within the
discretion of the Depositor); and
(iv) the entrance by a court of competent jurisdiction of an
order for judicial termination of the Trust;
the Trust shall terminate and the Property Trustee shall liquidate the
Trust in accordance with Section 9.04.
SECTION 9.03. TERMINATION. The respective obligations and
responsibilities of the Trust and the Trustees created hereby shall
terminate upon the latest to occur of the following: (i) the distribution
by the Property Trustee to Securityholders of (A) Debentures upon the
liquidation of the Trust pursuant to Section 9.04, or (B) of all amounts
required to be distributed hereunder upon the final payment of the Trust
Securities upon the redemption of all of the Trust Securities pursuant to
Section 4.02; (ii) the payment of all amounts due to creditors of the
Trust; and (iii) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.
SECTION 9.04. LIQUIDATION. (a) If an Early Termination Event
specified in clause (i), (iii) or (iv) of Section 9.02 shall occur, subject
to Section 9.04(d), after satisfaction of all amounts due to creditors of
the Trust, the Trust shall be liquidated by the Property Trustee by
promptly distributing to each Securityholder a Like Amount of Debentures.
Notice of liquidation shall be given by the Administrative Trustees by
first-class mail, postage prepaid, mailed not later than 30 nor more than
60 days prior to the Liquidation Date to each Holder of Trust Securities at
such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be outstanding and
any Trust Securities Certificates not surrendered for exchange
will be deemed to represent a Like Amount of Debentures; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Debentures, or, in the case of a liquidation
under Section 9.04(d), receive a Liquidation Distribution, as the
Property Trustee shall deem appropriate.
(b) In order to effect the distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for
such distribution (which shall be not more than 45 days prior to the
Liquidation Date) and, either itself acting as exchange agent or through
the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of
Debentures in exchange for the outstanding Trust Securities Certificates.
(c) After the Liquidation Date, (i) the Trust Securities will no
longer be deemed to be outstanding, (ii) certificates representing a Like
Amount of Debentures will be issued to Holders of Trust Securities
Certificates, upon surrender of Trust Securities certificates to the
Property Trustee or its agent for exchange, (iii) the Depositor shall use
best efforts to have the Debentures listed on The New York Stock Exchange
or on such other stock exchange or other organization as the Preferred
Securities are then listed or traded, (iv) any Trust Securities Certificate
not so surrendered for exchange will be deemed to represent a Like Amount
of Debentures, accruing interest at the rate provided for in the Debentures
from the last Distribution Date on which a Distribution was made on such
Trust Securities Certificate until such Certificate shall be so surrendered
(and until such Certificate shall be so surrendered, no payments of
interest and principal received by the Property Trust with respect to a
Like Amount of Debentures represented by such Certificate will be made to
the Holder of such Certificate), and (v) all rights of Securityholders will
cease, except the right to receive Debentures and payments of interest and
principal received by the Trustee with respect to the Debentures
represented by Trust Securities Certificates not surrendered for exchange
upon surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of
this Section 9.04, whether because of an order for termination entered by a
court of competent jurisdiction or otherwise, distribution of the
Debentures in the manner provided herein is determined by the Property
Trustee not to be practical, the Trust Property shall be liquidated, and
the Trust shall be dissolved, woundup or terminated, by the Property
Trustee in such manner as the Property Trustee shall determine. In such
event, on the date of the dissolution, windingup or other termination of
the Trust, Securityholders will be entitled to receive out of the assets of
the Trust available for distribution to Securityholders, after satisfaction
of all amounts due to creditors of the Trust, an amount equal to the
Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If, upon any such dissolution, winding up or
termination, the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, the amounts payable by the Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation
Amounts); provided, however, that if an Event of Default has occurred and
is continuing or if an Event of Default has not occurred solely by reason
of a requirement that time lapse or notice be given, the Liquidation
Distribution with respect to the Preferred Securities shall be made in full
prior to the making of any distribution with respect to the Common
Securities.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.01. GUARANTEE BY THE DEPOSITOR AND ASSUMPTION OF
OBLIGATIONS. Subject to the terms and conditions hereof, the Depositor
irrevocably and unconditionally guarantees to each Person to whom the Trust
is now or hereafter becomes indebted or liable (the "Beneficiaries"), and
agrees to assume liability for, the full payment, when and as due, of any
and all Obligations (as hereinafter defined) to such Beneficiaries. As
used herein, "Obligations" means any indebtedness, expenses or liabilities
of the Trust, other than (i) obligations of the Trust to pay to Holders the
amounts due such Holders pursuant to the terms of the Trust Securities.
This guarantee and assumption 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 10.02. LIMITATION OF RIGHTS OF SECURITYHOLDERS. The
death or incapacity of any person having an interest, beneficial or
otherwise, in a Trust Security shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or
any Securityholder for such person, to claim an accounting, take any action
or bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
SECTION 10.03. AMENDMENT. (a) This Trust Agreement may be
amended from time to time by a majority of the Administrative Trustees and
the Depositor, without the consent of any Securityholders, (i) to cure any
ambiguity, correct or supplement any provision herein or therein which may
be inconsistent with any other provision herein or therein, or to make any
other provisions with respect to matters or questions arising under this
Trust Agreement, (ii) to modify, eliminate or add to any provisions of this
Trust Agreement to such extent as shall be necessary to ensure that the
Trust will not be classified for United States Federal income tax purposes
other than as a "grantor trust" at any time that any Trust Securities are
outstanding or to ensure the Trust's exemption from the status of an
"investment company" under the Investment Company Act or (iii) to effect
the acceptance of a successor Trustee's appointment; provided, however,
that, except in the case of clause (ii), such action shall not adversely
affect in any material respect the interests of any Securityholder and, in
the case of clause (i), any amendments of this Trust Agreement shall become
effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.03(c), any provision of
this Trust Agreement may be amended by a majority of the Administrative
Trustees and the Depositor with the consent of a majority of the aggregate
Liquidation Amount of Trust Securities then outstanding and receipt by the
Trustees of an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for United
States Federal income tax purposes or the Trust's exemption from status of
an "investment company" under the Investment Company Act.
(c) In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected Securityholder
(such consent being obtained in accordance with Article VI), this Trust
Agreement may not be amended to (i) reduce the Liquidation Amount of any
Trust Security, (ii) change the amount or timing of any Distribution on the
Trust Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Trust Securities as of a
specified date, (iii) restrict the right of a Securityholder to institute
suit for the enforcement of any such payment on or after such date, (iv)
reduce the percentage in Liquidation Amount of the Outstanding Preferred
Securities, the consent of whose Holder is required for any amendment of
this Trust Agreement or any waiver of compliance with any provision of this
Trust Agreement and any default hereunder and its consequences, or (v)
change the provisions of this subsection.
(d) Notwithstanding any other provisions of this Trust
Agreement, no Trustee shall enter into or consent to any amendment to this
Trust Agreement which would cause the Trust to fail or cease to qualify for
the exemption from status of an "investment company" under the Investment
Company Act, afforded by Rule 3a-5 thereunder.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the affected party, this Trust Agreement
may not be amended in a manner which imposes any additional obligation on
the Depositor or any Trustee.
(f) In the event that there shall be any amendment to this Trust
Agreement the Administrative Trustees shall promptly provide to the
Depositor a copy of such amendment.
(g) The Trustees are entitled to receive an Opinion of Counsel
as conclusive evidence that any amendment to this Trust Agreement executed
pursuant to this Section 10.03 is authorized or permitted by, and conforms
to, the terms of this Section 10.03, has been duly authorized by and
lawfully executed and delivered on behalf of the other requisite parties,
that it is proper for the Trustees under the provisions of this Section
10.03 to join in the execution thereof, and that such amendment or the
exercise of any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for United
States Federal income tax purposes.
SECTION 10.04. AGREEMENT NOT TO PETITION. Each of the Trustees
and the Depositor agrees for the benefit of the Securityholders that, until
at least one year and one day after the Trust has been terminated in
accordance with Article IX, it shall not file, or join in the filing of, a
petition against the Trust under any bankruptcy, reorganization,
arrangement, insolvency, liquidation or other similar law (including,
without limitation, the United States Bankruptcy Code) (collectively,
"Bankruptcy Laws") or otherwise join in the commencement of any proceeding
against the Trust under any Bankruptcy Law. In the event the Depositor
takes action in violation of this Section 10.04, the Property Trustee
agrees, for the benefit of Securityholders, that it shall file an answer
with the bankruptcy court or otherwise properly contest the filing of such
petition by the Depositor against the Trust or the commencement of such
action and raise the defense that the Depositor has agreed in writing not
to take such action and should be stopped and precluded therefrom and such
other defenses, if any, as counsel for the Property Trustee or the Trust
may assert. The provisions of this Section 10.04 shall survive the
termination of this Trust Agreement.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS
OF THIS TRUST AGREEMENT AND THE SUBORDINATION PROVISIONS AND OTHER TERMS OF
THE GUARANTEE AND THE INDENTURE AND SHALL CONSTITUTE THE AGREEMENT OF THE
TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS
SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH
SECURITYHOLDER AND SUCH OTHERS.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amended and Restated Trust
Agreement to be duly executed, all as of the day and year first above
written.
THE MONTANA POWER COMPANY
By:
---------------------------------------
Title:
THE BANK OF NEW YORK,
as Property Trustee
By:
------------------------------------
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
----------------------------------------
Title:
----------------------------------------
,solely in his capacity as
Administrative Trustee
----------------------------------------
,solely in his capacity as
Administrative Trustee
------------------------------------------
,solely in his capacity as
Administrative Trustee
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
MONTANA POWER CAPITAL I
THIS CERTIFICATE OF TRUST of Montana Power Capital I (the
"Trust"), dated as of_________ __ 199_, is being duly executed and filed by
the undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. Section 3801, et seq.).
------- ------
1. Name. The name of the business trust being formed hereby is
Montana Power Capital I.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is The Bank of New York (Delaware), White Clay Center, Newark, New
Castle County, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective
as of its filing.
IN WITNESS WHEREOF, the undersigned, being the only trustees of
the Trust, have executed this Certificate of Trust as of the date first
above written.
THE BANK OF NEW YORK (DELAWARE), ,
----------------------------------
not in its individual capacity not in his individual
but solely as Trustee but solely as Trustee
By:
----------------------------
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number: Number of Common Securities:
Certificate Evidencing Common Securities
of
Montana Power Capital I
Common Securities
(liquidation amount $25 per Common Security)
Montana Power Capital I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that The
Montana Power Company (the "Holder") is the registered owner of the number
set forth above of the common securities of the Trust ,
-------------------
representing undivided beneficial interests in the assets of the Trust and
designated the Common Securities (liquidation amount $25 per Common
Security) (the "Common Securities"). Except as provided in Section 5.02 of
the Trust Agreement (as defined below) the Common Securities are not
transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Trust, dated as of ______ ___
199 , as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of the Common
Securities as set forth therein. The Trust will furnish a copy of the
Trust Agreement to the holder of this certificate without charge upon
written request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the holder of this certificate
is bound by the Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, an Administrative Trustee of the Trust has
executed this certificate for and on behalf of the Trust on this ___ day
of ________ , 199_ .
Montana Power Capital I
By:
------------------------------------------
not in his (her) individual capacity
but solely as Administrative Trustee
<PAGE>
EXHIBIT C
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of ________ __ , 199_, between The Montana
Power Company, a Montana corporation ("Montana Power"), and Montana Power
Capital I, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue and sell its preferred
securities (the "Preferred Securities") and to apply the proceeds of such
sale to the purchase from Montana Power of Montana Power's Junior
Subordinated Debentures;
NOW, THEREFORE, in consideration of the acceptance of the
Preferred Securities by each holder thereof, which acceptance Montana Power
acknowledges shall benefit Montana Power and which acceptance Montana Power
acknowledges will be made in reliance upon the execution and delivery of
this Agreement, Montana Power, and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Assumption by Montana Power. Subject to the terms
---------------------------
and conditions hereof, Montana Power hereby irrevocably and unconditionally
assumes 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 (i) obligations of the Trust to pay to holders of any
Trust Securities the amounts due such holders pursuant to the terms of the
Trust Securities, and (ii) obligations arising out of the negligence,
willful misconduct or bad faith of the Trustees of the Trust. 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 Beneficiary must restore payment of any sum paid on account of
any Obligation, under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. Montana Power hereby waives (i)
----------------
notice of acceptance of this Agreement and of any Obligation to which it
may apply, and (ii) 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 Montana 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.
Neither the Trust nor any Beneficiary shall have any obligation to give
notice to, or obtain the consent of, Montana Power with respect to the
happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this
-----------
Agreement directly against Montana Power, and Montana 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 Montana Power.
ARTICLE II
Section 2.01. Binding Effect. All of the obligations,
--------------
covenants, agreements and duties contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of Montana
Power.
Section 2.02. Amendment. So long as there shall remain any
---------
Beneficiary or any Preferred Securities shall be outstanding, this
Agreement shall not be modified or amended in any manner adverse to such
Beneficiary or to the holders of the Preferred 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:
Montana Power Capital I
c/o [Trustee]
Facsimile No.:
Attention:
The Montana Power Company
40 East Broadway
Butte, Montana 59701-9989
Facsimile No.:
Attention:
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 AGREEMENT is executed as of the day and year first above
written.
THE MONTANA POWER COMPANY
By:
--------------------------------------------
Name:
Title:
MONTANA POWER CAPITAL I
By:
---------------------------------------------
not in his individual capacity, but solely
as Administrative Trustee
---------------------------------------------
not in her individual capacity, but solely
as Administrative Trustee
---------------------------------------------
not in his individual capacity, but solely
as Administrative Trustee
<PAGE>
EXHIBIT D
[Clearing Agency Legend]
Certificate Number: Number of Preferred Securities:
CUSIP NO.
Certificate Evidencing Preferred Securities
of
Montana Power Capital I
___ % Cumulative Quarterly Income Preferred Securities, Series A
(liquidation amount $25 per Preferred Security)
Montana 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 the number set forth
above of the preferred securities of the Trust representing an undivided
beneficial interests in the assets of the Trust and designated as ___ %
Quarterly Income Preferred Securities (liquidation amount $25 per Preferred
Security) (the "Preferred Securities"). The Preferred 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 as provided in the Trust Agreement (as defined
below). The designations, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities are set forth
in, and this certificate and the Preferred Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions
of, the Amended and Restated Trust Agreement of the Trust, dated as of
________ __, 199_, as the same may be amended from time to time (the "Trust
Agreement"). The holder of this certificate is entitled to the benefits of
the Guarantee Agreement of The Montana Power Company, a Montana
corporation, and The Bank of New York, as guarantee trustee, dated as of
_______ ___, 199_ (the "Guarantee"), to the extent provided therein. The
Trust will furnish a copy of the Trust Agreement and the Guarantee to the
holder of this certificate without charge upon written request to the Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the holder of this certificate
is bound by the Trust Agreement and is entitled to the benefits thereunder.
This certificate is not valid unless countersigned by the Transfer Agent
and registered by the Registrar.
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate for and on behalf of the Trust on this
__ day of _________, 199_.
MONTANA POWER CAPITAL I
By:
----------------------------------------
not in his (her) individual capacity, but
solely as Administrative Trustee
Countersigned by:
-----------------------------------
Transfer Agent
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
--------------------------------------------------------------------------
-------------------------------------------------------------------------
------------------------------------------------------------------------
agent to transfer this Preferred Securities 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 Preferred
Securities Certificate)
Exhibit 4(c)
__________________________________________
THE MONTANA POWER COMPANY
TO
THE BANK OF NEW YORK
Trustee
_________
INDENTURE
(FOR UNSECURED SUBORDINATED DEBT SECURITIES
RELATING TO TRUST SECURITIES)
DATED AS OF ______________, ____
__________________________________________
<PAGE>
TABLE OF CONTENTS
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITAL OF THE COMPANY . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE . . . . . . . . . . . . . . . . . . . . . . . . . 1
Definitions and Other Provisions of General Application . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Interest . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . 2
Authorized Officer . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . 3
Company Request or Company Order ... . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . 3
Dollar or $.. . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . 3
Government Obligations . . . . . . . . . . . . . . 3
Governmental Authority . . . . . . . . . . . . . . 4
Guarantee . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . 4
Officer's Certificate . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . 6
Preferred Securities . . . . . . . . . . . . . . . 6
Property Trustee . . . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . . 6
Regular Record Date . . . . . . . . . . . . . . . . 6
Required Currency . . . . . . . . . . . . . . . . . 6
Note:This table of contents shall not, for any purpose, be deemed
to be part of the Indenture.
Responsible Officer . . . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . . 6
Security Register and Security Registrar .. . . . . 6
Senior Indebtedness . . . . . . . . . . . . . . . . 7
Special Record Date . . . . . . . . . . . . . . . . 7
Stated Maturity . . . . . . . . . . . . . . . . . . 7
Successor Corporation . . . . . . . . . . . . . . . 7
Trust . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Agreement . . . . . . . . . . . . . . . . . . 7
Trust Indenture Act . . . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . . . 7
United States . . . . . . . . . . . . . . . . . . . 8
SECTION 102. Compliance Certificates and Opinions . . . 8
SECTION 103. Form of Documents Delivered to Trustee . . 8
SECTION 104. Acts of Holders . . . . . . . . . . . . . 9
SECTION 105. Notices, etc. to Trustee and Company . . . 11
SECTION 106. Notice to Holders of Securities; Waiver . 12
SECTION 107. Conflict with Trust Indenture Act . . . . 12
SECTION 108. Effect of Headings and Table of Contents . 12
SECTION 109. Successors and Assigns . . . . . . . . . . 12
SECTION 110. Separability Clause . . . . . . . . . . . 13
SECTION 111. Benefits of Indenture . . . . . . . . . . 13
SECTION 112. Governing Law . . . . . . . . . . . . . . 13
SECTION 113. Legal Holidays . . . . . . . . . . . . . . 13
ARTICLE TWO . . . . . . . . . . . . . . . . . . . . . . . . . 14
Security Forms . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 201. Forms Generally . . . . . . . . . . . . . 14
SECTION 202. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . 14
ARTICLE THREE . . . . . . . . . . . . . . . . . . . . . . . . 15
The Securities . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 301. Amount Unlimited; Issuable in Series . . . 15
SECTION 302. Denominations . . . . . . . . . . . . . . 18
SECTION 303. Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 304. Temporary Securities . . . . . . . . . . . 20
SECTION 305. Registration, Registration of Transfer
and
Exchange . . . . . . . . . . . . . . . . 21
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . 22
SECTION 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . . . . . . 23
SECTION 308. Persons Deemed Owners . . . . . . . . . . 24
SECTION 309. Cancellation by Security Registrar . . . . 24
SECTION 310. Computation of Interest . . . . . . . . . 24
SECTION 311. Payment to Be in Proper Currency . . . . . 25
SECTION 312. Extension of Interest Payment . . . . . . 25
SECTION 313. Additional Interest. . . . . . . . . . . . 25
ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . 26
Redemption of Securities . . . . . . . . . . . . . . . . . . 26
SECTION 401. Applicability of Article . . . . . . . . . 26
SECTION 402. Election to Redeem; Notice to Trustee . . 26
SECTION 403. Selection of Securities to Be Redeemed . . 26
SECTION 404. Notice of Redemption . . . . . . . . . . . 27
SECTION 405. Securities Payable on Redemption Date . . 28
SECTION 406. Securities Redeemed in Part . . . . . . . 28
ARTICLE FIVE . . . . . . . . . . . . . . . . . . . . . . . . 28
Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 501. Applicability of Article . . . . . . . . . 28
SECTION 502. Satisfaction of Sinking Fund Payments
with
Securities . . . . . . . . . . . . . . . 29
SECTION 503. Redemption of Securities for Sinking
Fund . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE SIX . . . . . . . . . . . . . . . . . . . . . . . . . 30
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 601. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . 30
SECTION 602. Maintenance of Office or Agency . . . . . 30
SECTION 603. Money for Securities Payments to Be Held
in Trust . . . . . . . . . . . . . . . . . . . . . 31
SECTION 604. Corporate Existence . . . . . . . . . . . 32
SECTION 605. Maintenance of Properties . . . . . . . . 32
SECTION 606. Annual Officer's Certificate as to
Compliance. . . . . . . . . . . . . . . . . . . . . 33
SECTION 607. Waiver of Certain Covenants . . . . . . . 33
SECTION 608. Restriction on Payment of Dividends . . . 33
SECTION 609. Maintenance of Trust Existence . . . . . . 34
SECTION 610. Rights of Holders of Preferred
Securities . . . . . . . . . . . . . . . . . . . . 34
ARTICLE SEVEN . . . . . . . . . . . . . . . . . . . . . . . . 35
Satisfaction and Discharge . . . . . . . . . . . . . . . . . 35
SECTION 701. Satisfaction and Discharge of Securities . 35
SECTION 702. Satisfaction and Discharge of Indenture . 37
SECTION 703. Application of Trust Money . . . . . . . . 38
ARTICLE EIGHT . . . . . . . . . . . . . . . . . . . . . . . . 38
Events of Default; Remedies . . . . . . . . . . . . . . . . . 38
SECTION 801. Events of Default . . . . . . . . . . . . 38
SECTION 802. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . . . 40
SECTION 803. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . 41
SECTION 804. Trustee May File Proofs of Claim . . . . . 42
SECTION 805. Trustee May Enforce Claims Without
Possession of
Securities . . . . . . . . . . . . . . . 42
SECTION 806. Application of Money Collected . . . . . . 43
SECTION 807. Limitation on Suits . . . . . . . . . . . 43
SECTION 808. Unconditional Right of Holders to Receive
Principal,
Premium and Interest . . . . . . . . . . 44
SECTION 809. Restoration of Rights and Remedies . . . . 44
SECTION 810. Rights and Remedies Cumulative . . . . . . 44
SECTION 811. Delay or Omission Not Waiver . . . . . . . 45
SECTION 812. Control by Holders of Securities . . . . . 45
SECTION 813. Waiver of Past Defaults . . . . . . . . . 45
SECTION 814. Undertaking for Costs . . . . . . . . . . 46
SECTION 815. Waiver of Stay or Extension Laws . . . . . 46
ARTICLE NINE . . . . . . . . . . . . . . . . . . . . . . . . 46
The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 901. Certain Duties and Responsibilities . . . 46
SECTION 902. Notice of Defaults . . . . . . . . . . . . 47
SECTION 903. Certain Rights of Trustee . . . . . . . . 47
SECTION 904. Not Responsible for Recitals or Issuance
of
Securities . . . . . . . . . . . . . . . 48
SECTION 905. May Hold Securities . . . . . . . . . . . 49
SECTION 906. Money Held in Trust . . . . . . . . . . . 49
SECTION 907. Compensation and Reimbursement . . . . . . 49
SECTION 908. Disqualification; Conflicting Interests. . 50
SECTION 909. Corporate Trustee Required; Eligibility . 50
SECTION 910. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . 51
SECTION 911. Acceptance of Appointment by Successor . . 53
SECTION 912. Merger, Conversion, Consolidation or
Succession to
Business . . . . . . . . . . . . . . . . 54
SECTION 913. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 914. Co-trustees and Separate Trustees. . . . . 55
SECTION 915. Appointment of Authenticating Agent . . . 56
ARTICLE TEN . . . . . . . . . . . . . . . . . . . . . . . . . 58
Holders' Lists and Reports by Trustee and Company . . . . . . 58
SECTION 1001. Lists of Holders . . . . . . . . . . . . 58
SECTION 1002. Reports by Trustee and Company . . . . . 58
ARTICLE ELEVEN . . . . . . . . . . . . . . . . . . . . . . . 59
Consolidation, Merger, Conveyance or Other Transfer . . . . 59
SECTION 1101. Company May Consolidate, etc., Only on
Certain
Terms . . . . . . . . . . . . . . . . . 59
SECTION 1102. Successor Corporation Substituted . . . . 59
ARTICLE TWELVE . . . . . . . . . . . . . . . . . . . . . . . 60
Supplemental Indentures . . . . . . . . . . . . . . . . . . . 60
SECTION 1201. Supplemental Indentures Without Consent
of
Holders . . . . . . . . . . . . . . . . 60
SECTION 1202. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 1203. Execution of Supplemental Indentures . . 63
SECTION 1204. Effect of Supplemental Indentures . . . . 63
SECTION 1205. Conformity With Trust Indenture Act . . . 63
SECTION 1206. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . 64
SECTION 1207. Modification Without Supplemental
Indenture . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE THIRTEEN . . . . . . . . . . . . . . . . . . . . . . 64
Meetings of Holders; Action Without Meeting . . . . . . . . . 64
SECTION 1301. Purposes for Which Meetings May Be
Called . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1302. Call, Notice and Place of Meetings . . . 64
SECTION 1303. Persons Entitled to Vote at Meetings . . 65
SECTION 1304. Quorum; Action . . . . . . . . . . . . . 65
SECTION 1305. Attendance at Meetings; Determination of
Voting
Rights; Conduct and Adjournment of
Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1306. Counting Votes and Recording Action of
Meetings . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1307. Action Without Meeting . . . . . . . . . 68
ARTICLE FOURTEEN . . . . . . . . . . . . . . . . . . . . . . 68
Immunity of Incorporators, Stockholders, Officers and
Directors . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1401. Liability Solely Corporate . . . . . . . 68
ARTICLE FIFTEEN . . . . . . . . . . . . . . . . . . . . . . . 68
Subordination of Securities . . . . . . . . . . . . . . . . . 68
SECTION 1501. Securities Subordinate to Senior
Indebtedness. . . . . . . . . . . . . . . . . . . . 68
SECTION 1502. Payment Over of Proceeds of Securities . 69
SECTION 1503. Disputes with Holders of Certain Senior
Indebtedness . . . . . . . . . . . . . 71
SECTION 1504. Subrogation . . . . . . . . . . . . . . . 71
SECTION 1505. Obligation of the Company Unconditional . 71
SECTION 1506. Priority of Senior Indebtedness Upon
Maturity . . . . . . . . . . . . . . . . . . . . . 72
SECTION 1507. Trustee as Holder of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . 72
SECTION 1508. Notice to Trustee to Effectuate
Subordination . . . . . . . . . . . . . . . . . . . 72
SECTION 1509. Modification, Extension, etc. of Senior
Indebtedness . . . . . . . . . . . . . 73
SECTION 1510. Trustee Has No Fiduciary Duty to Holders
of Senior
Indebtedness . . . . . . . . . . . . . 73
SECTION 1511. Paying Agents Other Than the Trustee . . 73
SECTION 1512. Rights of Holders of Senior Indebtedness
Not
Impaired . . . . . . . . . . . . . . . 74
SECTION 1513. Effect of Subordination Provisions;
Termination . . . . . . . . . . . . . . . . . . . . 74
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . 75
Signatures and Seals . . . . . . . . . . . . . . . . . . . . 75
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . 76
<PAGE>
THE MONTANA POWER COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF ______________________, ____
TRUST INDENTURE ACT SECTION INDENTURE SECTION
Section 310 (a)(1) .. . . . . . . . . . . . . . . . . . . . . . . 909
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 909
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . 914
(a)(4) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 908
910
Section 311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 913
Section 312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1001
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
Section 314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . 606
(b) . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
903
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 902
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 901
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 814
Section 316 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 812
813
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 802
812
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 813
(a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 808
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 803
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 804
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 603
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 107
<PAGE>
INDENTURE, dated as of _________________, between THE
MONTANA POWER COMPANY, a corporation duly organized and existing
under the laws of the State of Montana (herein called the
"Company"), having its principal office at 40 East Broadway,
Butte, Montana 59701, and THE BANK OF NEW YORK, a corporation
duly organized and existing under the laws of the State of New
York, having its principal corporate trust office at 101 Barclay
Street, New York, New York 10286, as Trustee (herein called the
"Trustee").
RECITAL 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 its unsecured subordinated debentures, notes or other
evidences of indebtedness (herein called the "Securities"), in an
unlimited aggregate principal amount to be issued in one or more
series as contemplated herein; and all acts necessary to make
this Indenture a valid agreement of the Company have been
performed.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires,
capitalized terms used herein shall have the meanings assigned to
them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities or of any series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. 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
reference 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, the Company shall, to the extent
required, conform to any order, rule or regulation of any
administrative agency, regulatory authority or other govern-
mental body having jurisdiction over the Company;
(d) unless the context otherwise requires, any reference
to an "Article" or a "Section" refers to an Article or
Section, as the case may be, of this Indenture; and
(e) 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.
Certain terms, used principally in Article Nine, are de-
fined in that Article.
"ACT", when used with respect to any Holder of a
Security, has the meaning specified in Section 104.
"ADDITIONAL INTEREST" has the meaning specified in
Section 313.
"AFFILIATE" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "CONTROL" when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or through
one or more intermediaries, 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
pursuant to Section 915 to act on behalf of the Trustee to
authenticate one or more series of Securities.
"AUTHORIZED OFFICER" means the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, or any other officer or agent of the Company duly
authorized by the Board of Directors to act in respect of matters
relating to this Indenture.
"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 Secretary or an Assistant 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 Commis-
sion, as from time to time constituted, created under the
Securities Exchange Act of 1934, as amended, or, if at any time
after the date of execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body, if any, per-
forming 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 REQUEST" or "COMPANY ORDER" means a written re-
quest or order signed in the name of the Company by an Authorized
Officer and delivered 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
execution and delivery of this Indenture is located at 101
Barclay Street, New York, New York 10286.
"CORPORATION" means a corporation, association, company,
joint stock company or business trust.
"DEFAULTED INTEREST" has the meaning specified in Section
307.
"DOLLAR" or "$" means a dollar or other equivalent unit
in such coin or currency of the United States as at the time
shall be legal tender for the payment of public and private
debts.
"EVENT OF DEFAULT" with respect to Securities of a
particular series has the meaning specified in Section 801.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by,
the United States and entitled to the benefit of the full
faith and credit thereof; and
(b) certificates, depositary receipts or other in-
struments which evidence a direct ownership interest in obli-
gations 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 $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.
"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 of the foregoing, or any department, agency,
authority or other instrumentality of any of the foregoing.
"GUARANTEE" means the guarantee agreement delivered from the
Company to a Trust, for the benefit of the holders of Preferred
Securities issued by such Trust.
"HOLDER" means a Person in whose name a Security is registered
in the Security Register.
"INDENTURE" means this instrument as originally executed and
delivered and as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall
include the terms of a particular series of Securities
established as contemplated by Section 301.
"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.
"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.
"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 by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities deemed to have been paid in accordance
with Section 701; and
(c) Securities which have been paid pursuant to Section
306 or in exchange for which 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, 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 Affiliate or such obligor owns all Securities
Outstanding under this Indenture, or (except for purposes of
actions to be taken by Holders of more than one series voting as
a class under Section 812) all Outstanding Securities of each
such series, as the case may be, determined without regard to
this provision) shall be disregarded and deemed not to be Out-
standing, except that, in determining whether the Trustee shall
be protected in relying upon any such request, demand, authoriza-
tion, 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 the
pledgee establishes to the satisfaction of the Trustee the
pledgee's 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; (y) the principal amount of any Security which is
denominated in a currency other than Dollars or in a composite
currency that shall be deemed to be Outstanding for such purposes
shall be the amount of Dollars which could have been purchased by
the principal amount of such currency or composite currency
evidenced by such Security, in each such case certified to the
Trustee in an Officer's Certificate, based (i) on the average of
the mean of the buying and selling spot rates quoted by three
banks which are members of the New York Clearing House
Association selected by the Company in effect at 11:00 A.M. (New
York time) in The City of New York on the fifth Business Day
preceding any such determination or (ii) if on such fifth
Business Day it shall not be possible or practicable to obtain
such quotations from such three banks, on such other quotations
or alternative methods of determination which shall be as
consistent as practicable with the method set forth in (i) above;
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.
"PERSON" means any individual, corporation, partnership, joint
venture, trust or unincorporated organization or any Governmental
Authority.
"PLACE OF PAYMENT", when used with respect to the Securities
of any series, means the place or places, specified as contem-
plated by Section 301, at which, subject to Section 602, prin-
cipal of and premium, if any, and interest, if any, on the
Securities of such series 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, and any Security authenticated and
delivered in exchange pursuant to Sections 304, 406 or 1206 but
not involving any transfer shall be deemed (to the extent lawful)
to evidence the same debt as the Security for which the exchange
was made.
"PREFERRED SECURITIES" means any preferred trust interests
issued by a Trust or similar securities issued by permitted
successors to such Trust in accordance with the Trust Agreement
pertaining to such Trust.
"PROPERTY TRUSTEE" has the meaning specified in Section 610.
"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" has the meaning stated in the first recital of
this Indenture and more particularly means any securities authen-
ticated and delivered under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the
respective meanings specified in Section 305.
"SENIOR INDEBTEDNESS" means all obligations (other than non-
recourse obligations and the indebtedness issued under this
Indenture) of, or guaranteed or assumed by, the Company for
borrowed money, including both senior and subordinated
indebtedness for borrowed money (other than the Securities), or
for the payment of money relating to any lease which is
capitalized on the consolidated balance sheet of the Company and
its subsidiaries in accordance with generally accepted accounting
principles as in effect from time to time, or evidenced by bonds,
debentures, notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and refundings of
any such indebtedness or obligations, whether existing as of the
date of this Indenture or subsequently incurred by the Company
unless, in the case of any particular indebtedness, obligation,
renewal, extension or refunding, the instrument creating or
evidencing the same or the assumption or guarantee of the same
expressly provides that such indebtedness, obligation, renewal,
extension or refunding is not superior in right of payment to or
is pari passu with the Securities; provided that the Company's
obligations under any Guarantee shall not be deemed to be Senior
Indebtedness.
"SPECIAL RECORD DATE" for the payment of any Defaulted
Interest on the Securities of any series means a date fixed by
the Trustee pursuant to Section 307.
"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
1101.
"TRUST" means Montana Power Capital I, a statutory business
trust formed under the laws of the State of Delaware, or any
other trust designated pursuant to Section 301 hereof or any
permitted successor under the Trust Agreement pertaining to such
Trust.
"TRUST AGREEMENT" means the Amended and Restated Trust
Agreement, dated as of ______________, ___, relating to Montana
Power Capital I or a trust agreement relating to a Trust
designated pursuant to Section 301 hereof, in each case, among
the Company, as Depositor and the trustees named therein as they
may be amended from time to time.
"TRUST INDENTURE ACT" means, as of any time, the Trust
Indenture Act of 1939, or any successor statute, as in effect at
such time.
"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 such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities
of that series.
"UNITED STATES" means the United States of America, its
Territories, its possessions and other areas subject to its
political jurisdiction.
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, if requested by the Trustee, 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 (including any covenants compliance with which
constitutes a condition precedent) have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent, if any, have been complied with,
except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required
by any provision of this 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 Person 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
Person, such Person has made such examination or investigation
as is necessary to enable such Person to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each
such Person, such condition or covenant has been complied
with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
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.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which such Officer's Certificate or
opinion are based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Company stating that the
information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are
erroneous.
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.
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 of 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
Thirteen, 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 901) 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 1306.
(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 principal amount 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, no-
tice, 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 principal 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 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 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.
(g) If the Company shall solicit from Holders any
request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, fix in
advance a record date for the determination of Holders
entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act 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 (i) determining whether Holders of
the requisite proportion of the Outstanding Securities have
authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be
computed as of the record date, or (ii) determining which
Holders may revoke any such Act (notwithstanding Section
104(e)).
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 herein
expressly provided) if in writing and delivered personally to an
officer or other responsible employee of the addressee, or
transmitted by facsimile transmission 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 certified or 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:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Vice President, Corporate Trust
Administration
Telephone: (212) 815-3806
Telecopy: (212) 815-5915
If to the Company, to:
The Montana Power Company
40 East Broadway
Butte, Montana 59701
Attention: Treasurer
Telephone: (406) 497-2374
Telecopy:(406) 497-3018
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 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, if any, and not earlier than the earliest date, if any,
prescribed for the giving of such notice.
In case by reason of the suspension of regular mail serv-
ice 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 of the provisions of the Trust Indenture Act,
such other provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the Trust
Indenture Act shall control.
SECTION 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 and Trustee shall bind their respective successors and
assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the
Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, 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, the Holders and, so long as the
notice described in Section 1513 hereof has not been given, the
holders of Senior Indebtedness, and the holders of Preferred
Securities in accordance with Section 610 hereof) 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 laws of the State of New
York, except to the extent that the law of any other jurisdiction
shall be mandatorily 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 in the Board Resolution
or Officer's Certificate which establishes the terms of the
Securities of such series, 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, 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, and in the same
amount, as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, as the case may be, 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 thereof 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 supplemental indenture or Board
Resolution, in each 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.
Unless otherwise specified as contemplated by Section
301, 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 desig-
nated therein referred to in the within-mentioned
Indenture.
Dated: _________________________________
as Trustee
By: _____________________________
Authorized Signatory
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;
provided, however, that all Securities shall be issued to a Trust
in exchange for securities of the Company or to evidence loans by
a Trust of the proceeds of the issuance of Preferred Securities
of such Trust plus the amount deposited by the Company with such
Trust from time to time.
The Securities may be issued in one or more series.
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 1206 and
except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered
hereunder);
(c) if other than as provided in Section 307, the Person
or Persons (without specific identification) to whom interest
on Securities of such series shall be payable on any Interest
Payment Date;
(d) the date or dates on which the principal of the
Securities of such series is payable or any formula 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 this Indenture or otherwise (without
regard to any provisions for redemption, prepayment,
acceleration, purchase or extension);
(e) the rate or rates at which the Securities of such
series 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 formula 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 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 right of the Company, if any,
to extend the interest payment periods and the duration of any
such extension as contemplated by Section 312; and the basis
of computation of interest, if other than as provided in
Section 310;
(f) the place or places at which or methods by which (1)
the principal of and premium, if any, and interest, if any, on
Securities of such series shall be payable, (2) registration
of transfer of Securities of such series may be effected, (3)
exchanges of Securities of such series may be effected and (4)
notices and demands to or upon the Company in respect of the
Securities of such series and this Indenture may be served;
the initial Security Registrar and Paying Agent or Agents for
such series; and if such is the case, and the Trustee does not
object, that the principal of such Securities shall be payable
without 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, if other than as provided in Article Four, upon
which the Securities of such series may be redeemed, in whole
or in part, at the option of the Company and any restrictions
on such redemptions, including but not limited to a
restriction on a partial redemption by the Company of the
Securities of any series that would result in the delisting of
such Securities from any national exchange;
(h) the obligation or obligations, if any, of the
Company to redeem or purchase the Securities of such series
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
shall be issuable if other than denominations of $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
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 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 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 formula 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 principal of or
premium, if any, or interest, if any, on the Securities of
such series may be determined with reference to an index or
other fact or event ascertainable outside this Indenture or
otherwise, the formula or other method or other means by 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
which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 802;
(o) any Events of Default, in addition to those
specified in Section 801, with respect to the Securities of
such series, and any covenants of the Company for the benefit
of the Holders of the Securities of such series, in addition
to those set forth in Article Six, and whether such covenants
may be waived pursuant to Section 607;
(p) the terms, if any, pursuant to which the Securities
of such series may be converted into or exchanged for shares
of capital stock or other securities of the Company or any
other Person;
(q) the obligations or instruments, if any, which shall
be considered to be Government Obligations in respect of the
Securities of such series 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 701;
(r) if the Securities of such series 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
global form and (iii) any and all other matters incidental to
such Securities;
(s) if the Securities of such series 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 (g) of Section 1201;
(t) to the extent not established pursuant to clause (r)
of this paragraph, any limitations on the rights of the
Holders of the Securities of such Series 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 the amount or terms thereof;
(u) any exceptions to Section 113, or variation in the
definition of Business Day, with respect to the Securities of
such series;
(v) the designation of the Trust to which Securities of
such series are to be issued; and
(w) any other terms of the Securities of such series not
inconsistent with the provisions of this Indenture.
The Securities of each series shall be subordinated in
right of payment to Senior Indebtedness as provided in Article
Fifteen.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, the Securities of each
series shall be issuable in denominations of $25 and any integral
multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Unless otherwise provided as contemplated by Section 301
with respect to any series of Securities, 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 attested by any other Authorized Officer or by
the Secretary or an Assistant Secretary of the Company. 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
or the Secretary or an Assistant Secretary 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, establishing such terms;
(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) such Securities, when 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, will have been duly
issued under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled to
the benefits provided by this Indenture, and enforceable
in accordance with their terms, subject, as to
enforcement, to laws relating to or affecting generally
the enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws and to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or
at law).
If the form or 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
materially or adversely 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, 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, 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 or other
authorized signatory 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 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, and the Company shall deliver such Security
to the Trustee for cancellation as provided in Section 309
together with a written statement (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel)
stating that such Security has never been issued and sold by the
Company, 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, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten, mimeographed 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.
Unless otherwise specified as contemplated by Section 301
with respect to the Securities of any series, after the
preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable,
without charge to the Holder thereof, for definitive Securities
of such series upon surrender of such temporary Securities at the
office or agency of the Company maintained pursuant to Section
602 in a Place of Payment for such Securities. Upon such
surrender of temporary Securities for such exchange, the Company
shall, except as aforesaid, execute and the Trustee shall
authenticate and deliver in exchange therefor definitive Securi-
ties of the same series, of authorized denominations and of like
tenor and aggregate principal amount.
Until exchanged in full as hereinabove provided, the
temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive
Securities of the same series and of like tenor authenticated and
delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.
The Company shall cause to be kept in each office
designated pursuant to Section 602, with respect to the
Securities of each series, a register (all registers kept in
accordance with this Section being collectively referred to as
the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for
the registration of Securities of such series and the
registration of transfer thereof. The Company shall designate
one Person to maintain the Security Register for the Securities
of each series on a consolidated basis, 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 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, upon surrender
for registration of transfer of any Security of such series at
the office or agency of the Company maintained pursuant to
Section 602 in a Place of Payment for such series, 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, 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, any Security of
such series may be exchanged at the option of the Holder, for one
or more new Securities of the same series, 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 sat-
isfactory 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, 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 1206 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 during a period of 15 days
immediately preceding the date of the mailing of any notice of
redemption of the Securities of such series 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 exchange therefor a new Security of the same series,
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trus-
tee (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 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, 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 original 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, (i) 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; and (ii) subject to Section 312,
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 (herein called "Defaulted 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 Defaulted
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
Defaulted Interest to the Persons in whose names the Secu-
rities 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 Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of
the amount of Defaulted 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 aggregate amount
proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such
deposit on or 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 Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10 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 promptly cause notice of the proposed
payment of such Defaulted 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, not less than
10 days prior to such Special Record Date. Notice of the pro-
posed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Secu-
rities 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 Defaulted
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.
Prior to due presentment of a 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 such
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.
No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section, except
as expressly permitted by this Indenture. 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, interest on the Securities of
each series shall be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period shorter
than a full month, on the basis of the actual number of days
elapsed in such period.
SECTION 311. PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Securities of any series 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 or interest 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 Cur-
rency 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 fluctuation, 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.
SECTION 312. EXTENSION OF INTEREST PAYMENT.
The Company shall have the right at any time, so long as no
Event of Default shall have occurred and be continuing with
respect to the Securities of any series, to extend and re-extend
interest payment periods on all Securities of one or more series,
if so specified as contemplated by Section 301 with respect to
such Securities and upon such terms as may be specified as
contemplated by Section 301 with respect to such Securities.
SECTION 313. ADDITIONAL INTEREST.
So long as any Preferred Securities remain outstanding,
if the Trust which issued such Preferred Securities shall be
required to pay, with respect to its income derived from the
interest payments on the Securities of any series, any amounts
for or on account of any taxes, duties, assessments or
governmental charges of whatever nature imposed by the United
States, or any other taxing authority, then, in any such case,
the Company will pay as interest on such series such additional
interest ("Additional Interest") as may be necessary in order
that the net amounts received and retained by such Trust after
the payment of such taxes, duties, assessments or governmental
charges shall result in such Trust's having such funds as it
would have had in the absence of the payment of such taxes,
duties, assessments or governmental charges.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series 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) 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 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 which is subject to a restriction or 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 are to be
redeemed, the particular Securities to be redeemed shall be
selected by the Trustee from the Outstanding Securities of such
series not previously called for redemption, by such method as
shall be provided for any particular series, or, in the absence
of any such provision, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized
denomination for Securities of such series or any integral
multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized
denomination for Securities of such series; 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, 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 Trustee, 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 Trustee shall promptly notify the Company and the
Security Registrar 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 pro-
vided in Section 106 to the Holders of the Securities to be
redeemed not less than 30 nor more than 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 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.
Unless otherwise specified with respect to any Securities
in accordance with Section 301, 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 701, 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 Trustee in the name
and at the expense of the Company. Notice of mandatory
redemption of Securities shall be given by the Trustee 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 sat-
isfied, 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, 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
SINKING FUNDS
SECTION 501. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of the Securities of any series,
except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided
for by the terms of Securities of any series is herein referred
to as a "mandatory sinking fund payment", and any payment in
excess of such minimum amount provided for by the terms of
Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of
Securities of any series, the cash amount of any mandatory
sinking fund payment may be subject to reduction as provided in
Section 502. Each sinking fund payment shall be applied to the
redemption of Securities of the series in respect of which it was
made as provided for by the terms of such Securities.
SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES.
The Company (a) may deliver to the Trustee Outstanding
Securities (other than any previously called for redemption) of a
series in respect of which a mandatory sinking fund payment is to
be made and (b) may apply as a credit Securities of such series
which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant
to the terms of such Securities, in each case in satisfaction of
all or any part of such mandatory sinking fund payment with
respect to the Securities of such series; provided, however, that
no Securities shall be applied in satisfaction of a mandatory
sinking fund payment if such Securities shall have been
previously so applied. Securities so applied shall be received
and credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such mandatory
sinking fund payment shall be reduced accordingly.
SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment
date for the Securities of any series, the Company shall deliver
to the Trustee an Officer's Certificate specifying:
(a) the amount of the next succeeding mandatory sinking
fund payment for such series;
(b) the amount, if any, of the optional sinking fund
payment to be made together with such mandatory sinking fund
payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate sinking fund
payment which is to be satisfied by the payment of cash;
(e) the portion, if any, of such mandatory sinking fund
payment which is to be satisfied by delivering and crediting
Securities of such series pursuant to Section 502 and stating
the basis for such credit and that such Securities have not
previously been so credited, and the Company shall also
deliver to the Trustee any Securities to be so delivered. If
the Company shall not deliver such Officer's Certificate, the
next succeeding mandatory sinking fund payment for such series
shall be made entirely in cash in the amount of the mandatory
sinking fund payment. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 403 and cause notice of the
redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 404.
Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner
stated in Sections 405 and 406.
ARTICLE SIX
COVENANTS
SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay the principal of and premium, if
any, and interest, if any (including Additional Interest), on the
Securities of each series in accordance with the terms of such
Securities and this Indenture.
SECTION 602. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for
the Securities of each series 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 to and demands 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 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, 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, 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 603. 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, 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, 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, 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 Seven; 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 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 a Holder of an
Outstanding Security, look only to the Company for payment of the
amount so due and payable and remaining unpaid, 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 30 days from the date of such
mailing, any unclaimed balance of such money then remaining will
be paid to the Company.
SECTION 604. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article
Eleven, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence.
SECTION 605. 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 business 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
all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may
be necessary so that the business carried on in connection
therewith may be properly conducted; 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 if such discontinuance
is, in the judgment of the Company, desirable in the conduct of
its business.
SECTION 606. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than September 15 in each year, commencing
September 15, 1997, 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 607. 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, as contemplated by Section 301 as being subject to
waiver pursuant to this Section 607, if before the time for such
compliance the Holders of at least a majority in aggregate
principal amount of the Outstanding Securities of all series 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
and (b) Section 604, 605 or Article Eleven if before the time for
such compliance the Holders of at least 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 the case of (a) or (b), 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 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 at least a majority in aggregate liquidation
preference of the outstanding Preferred Securities issued by such
Trust affected, obtained as provided in the Trust Agreement
pertaining to such Trust.
SECTION 608. RESTRICTION ON PAYMENT OF DIVIDENDS.
The Company shall not, and shall not permit any
subsidiary to, (a) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock (other than
dividends or distributions in common stock of the Company), or
(b) make any payment of principal of or, interest or premium, if
any, on or repay or repurchase or redeem any debt securities
(including other Securities) that rank pari passu with or junior
in interest to the Securities or make any guarantee payments with
respect to such indebtedness if at such time (i) there shall have
occurred and be continuing a payment default pursuant to Section
801(a) or 801(b) (whether before or after expiration of any
period of grace), or (ii) the Company shall have elected to
extend any interest payment period as provided in Section 312,
and any such period, or any extension thereof, shall be
continuing.
SECTION 609. MAINTENANCE OF TRUST EXISTENCE.
So long as Preferred Securities of any series remain
outstanding, the Company shall (i) maintain direct or indirect
ownership of all interests in the Trust which issued such
Preferred Securities, other than such Preferred Securities, (ii)
not voluntarily (to the extent permitted by law) dissolve,
terminate, liquidate or wind up such Trust, except in connection
with a distribution of the Securities to the holders of the
Preferred Securities in liquidation of such Trust or in
connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement, (iii) remain the sole Depositor
under the Trust Agreement (the "Depositor") of such Trust and
timely perform in all material respects all of its duties as
Depositor of such Trust, and (iv) use reasonable efforts to cause
such Trust to remain a business trust and otherwise continue to
be treated as a grantor trust for Federal income tax purposes
provided that any permitted successor to the Company under this
Indenture may succeed to the Company's duties as Depositor of
such Trust; and provided further that the Company may permit such
Trust to consolidate or merge with or into another business trust
or other permitted successor under the Trust Agreement pertaining
to such Trust so long as the Company agrees to comply with this
Section 609 with respect to such successor business trust or
other permitted successor.
SECTION 610. RIGHTS OF HOLDERS OF PREFERRED SECURITIES.
The Company agrees that, for so long as any Preferred
Securities remain outstanding, its obligations under this
Indenture will also be for the benefit of the holders from time
to time of Preferred Securities, and the Company acknowledges and
agrees that if the property trustee under the related Trust
Agreement (the "Property Trustee") fails to enforce its rights
with respect to the Securities or the related Trust Agreement, a
holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce the Property Trustee's
rights with respect to the Securities or such Trust Agreement, to
the fullest extent permitted by law, without first instituting
any legal proceeding against the Property Trustee or any other
person or entity.
ARTICLE SEVEN
SATISFACTION AND DISCHARGE
SECTION 701. 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 deemed to have been
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, Government
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 on or prior to Maturity; provided, however, that
in the case of the provision for payment or redemption of less
than all the Securities of any series, such Securities or
portions thereof shall have been selected by the Trustee 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 Government Obligations deposited in
accordance with this Section shall be held in trust, as
provided in Section 703; and
(y) if such deposit shall have been made prior to
the Maturity of such Securities, an Opinion of Counsel to
the effect that the Holders of such Securities will not
recognize income, gain or loss for Federal income tax
purposes as a result of the satisfaction and discharge of
the Company's indebtedness in respect of such Securities,
and such Holders will be subject to Federal income
taxation on the same amounts and in the same manner and
at the same times as if such satisfaction and discharge
had not occurred.
Upon the deposit of money or Government Obligations, or
both, in accordance with this Section, together with the
documents required by clauses (x) and (y) above, the Trustee
shall, upon receipt of a Company Request, acknowledge in writing
that the Security or Securities or portions thereof with respect
to which such deposit was made 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 Opinion of Counsel
specified in clause (y) 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 of this Indenture or of any
of the covenants of the Company under Article Six (except the
covenants contained in Sections 602, 603, 604 and 609) 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 the Holders of such
Securities or portions thereof shall continue to be entitled to
look to the Company for payment of the indebtedness represented
thereby; 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 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.
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 60
day period commencing with the date of the deposit of moneys or
Government 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, 503 (as to notice
of redemption), 602, 603, 604, 609, 907 and 915 and this Article
Seven shall survive.
The Company shall pay, and shall indemnify the Trustee or
any Paying Agent with which Government Obligations shall have
been deposited as provided in this Section against, any tax, fee
or other charge imposed on or assessed against such Government
Obligations or the principal or interest received in respect of
such Government 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 or 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 Government 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 603.
SECTION 702. 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 proper
instruments acknowledging 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 701, 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, 503 (as to notice of
redemption), 602, 603, 604, 609, 907 and 915 and this Article
Seven shall survive.
Upon satisfaction and discharge of this Indenture as pro-
vided in this Section, the Trustee shall assign, transfer and
turn over to the Company, subject to the lien provided by Section
907, 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 Government Obligations held by the Trustee
pursuant to Section 703.
SECTION 703. APPLICATION OF TRUST MONEY.
Neither the Government Obligations nor the money deposit-
ed pursuant to Section 701, nor the principal or interest
payments on any such Government 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, however, to the provisions of Section 603; provided,
however, that, so long as there shall not have occurred and be
continuing an Event of Default, any cash received from such
principal or interest payments on such Government Obligations, if
not then needed for such purpose, shall, to the extent prac-
ticable, be invested in Government Obligations of the type
described in clause (b) in the first paragraph of Section 701
maturing at such times and in such amounts as shall be
sufficient, together with any other moneys and the principal of
and interest on any other Governmental 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 except the lien provided by
Section 907; and provided, further, that, so long as there shall
not have occurred and be continuing an Event of Default, 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 except
the lien provided by Section 907; 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 EIGHT
EVENTS OF DEFAULT; REMEDIES
SECTION 801. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one or more of the following
events which has occurred and is continuing:
(a) failure to pay interest, if any, including any
Additional Interest, on any Security of such series within 30
days after the same becomes due and payable (whether or not
payment is prohibited by the provisions of Article Fifteen
hereof); provided, however, that a valid extension of the
interest payment period by the Company as contemplated in
Section 312 of this Indenture shall not constitute a failure
to pay interest for this purpose; or
(b) failure to pay the principal of or premium, if any,
on any Security of such series at its Maturity; 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 60 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 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 shall have been
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 (1) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any appli-
cable Federal or State bankruptcy, insolvency, reorganization
or other similar law or (2) 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 unstayed and in effect for a period
of 90 consecutive days; or
(e) the commencement by the Company of a voluntary case
or proceeding under any applicable Federal or State bank-
ruptcy, 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) any other Event of Default specified with respect to
Securities of such series as contemplated by Section 301.
SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default due to the default in payment of
principal of, or interest on, any series of Securities or due to
the default in the performance or breach of any other covenant or
warranty of the Company applicable to the Securities of such
series but not applicable to all Outstanding Securities shall
have occurred and be continuing, (i) the Trustee, (ii) the
Holders of not less than 33% in principal amount of the
Securities of such series, and (iii) if the Trustee or Holders of
not less than 33% in principal amount of the Securities of such
series shall fail to make such declaration and the Preferred
Securities issued by the Trust to which such series of Securities
relate are still outstanding, the holders of not less than 33% in
aggregate liquidation preference of such series of Preferred
Securities may declare the principal of all Securities of such
series and interest accrued thereon to be due and payable
immediately. If an Event of Default due to default in the
performance of any other of the covenants or agreements herein
applicable to all Outstanding Securities (including an Event of
Default specified in Section 801(d) or (e)) shall have occurred
and be continuing, either the Trustee or the Holders of not less
than 33% in principal amount of all Securities then Outstanding
(considered as one class), and not the Holders of the Securities
of any one of such series, may declare the principal of all
Securities and interest accrued thereon to be due and payable
immediately. Upon any such declaration, the principal (and
premium, if any) of all Securities and interest accrued thereon
(including Additional Interest, if any) shall immediately become
due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series shall have been made and
before a judgment or decree for payment of the money due shall
have been obtained by the Trustee as hereinafter in this Article
provided, the Event or Events of Default giving rise to such
declaration of acceleration shall, without further act, be deemed
to have been waived, 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
(1) all overdue interest on all Securities of such
series;
(2) the principal of and premium, if any, on any
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
Securities;
(3) to the extent that payment of such interest is
lawful, interest upon overdue interest, if any, at the
rate or rates prescribed therefor in such Securities;
(4) all amounts then due to the Trustee under
Section 907;
and
(b) any other Event or Events of Default with respect to
Securities of such series, other than the nonpayment 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 813.
No such rescission shall affect any subsequent Event of Default
or impair any right consequent thereon.
SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY
TRUSTEE.
If an Event of Default described in clause (a) or (b) of
Section 801 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, to the extent permitted by law,
interest on premium, if any, and on any overdue principal and in-
terest, at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, such further amount as
shall be sufficient to cover any amounts due to the Trustee under
Section 907.
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 804. 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 907) 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 907.
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 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or
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 806. APPLICATION OF MONEY COLLECTED.
Subject to the provisions of Article Fifteen, any money
collected by the Trustee with respect to a particular series of
Securities pursuant to this Article shall be applied in the
following order, 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 in respect of which or for the benefit of which such
money shall have been collected 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 907;
SECOND: To the payment of the amounts then due and un-
paid upon the Securities for principal of and premium, if any,
and interest, if any, in respect of which or for the benefit
of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts
due and payable on such Securities for principal, premium, if
any, and interest, if any, respectively; and
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 807. LIMITATION ON SUITS.
No Holder shall have any right to institute any proceed-
ing, 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 at least 33% 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 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 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 808. 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 and 312)
interest, if any, on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemp-
tion, 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. Any holder of
related Preferred Securities shall have the right to institute
suit for the enforcement of any such payment to such holder with
respect to Securities relating to such Preferred Securities
having a principal amount equal to the aggregate liquidation
preference amount of the related Preferred Securities held by
such holder.
SECTION 809. 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, and 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 810. 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 811. 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 812. 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 such direction shall not be in conflict
with any rule of law or with this Indenture. The Trustee may
take any other action, deemed proper by the Trustee, which is not
inconsistent with any such direction. Before proceeding to
exercise any right or power hereunder at the direction of such
Holders, the Trustee shall be entitled to receive from such
Holders reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with any such direction.
SECTION 813. WAIVER OF PAST DEFAULTS.
The Holders of not less than 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 hereunder with respect to such series 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 1202 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 Trust holds the Securities
of any series, such Trust may not waive any past default without
the consent of at least a majority in aggregate liquidation
preference of the outstanding Preferred Securities issued by such
Trust affected, obtained as provided in the Trust Agreement
pertaining to 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 814. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder by his
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 reason-
able 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
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 815. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE NINE
THE TRUSTEE
SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee shall have and be subject to all the
duties and responsibilities specified with respect to an
indenture trustee in the Trust Indenture Act, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee.
(b) 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.
(c) Notwithstanding anything contained in this Indenture
to the contrary, the duties and responsibilities of the
Trustee under this Indenture shall be subject to the
protections, exculpations and limitations on liability
afforded to the Trustee under the provisions of the Trust
Indenture Act, including those deemed by the Trust Indenture
Act to be included herein.
(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 902. 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 801(c),
no such notice to Holders shall be given until at least 45 days
after the occurrence thereof. 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.
SECTION 903. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 901 and to the
applicable provisions of the Trust Indenture Act:
(a) the Trustee may conclusively rely and shall be
protected in acting or refraining from acting in good faith
upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document reasonably believed by it to be genuine and
to have been signed or presented by the proper party or
parties;
(b) any request or direction of the 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 be herein
specifically prescribed) may, in the absence of bad faith on
its part, conclusively rely upon an Officer's Certificate;
(d) the 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 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 in
compliance 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 default or Event of Default, as the case may be, with
respect to the Securities of any series for which it is acting
as Trustee unless either (1) a Responsible Officer of the
Trustee shall have actual knowledge of the default or Event of
Default, as the case may be, or (2) written notice of such
default or Event of Default, as the case may be, shall have
been given to the Trustee by the Company, any other obligor on
such Securities or by any Holder of such Securities.
SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Securities (ex-
cept the Trustee's certificates of authentication) shall be taken
as the statements of the Company, and neither the Trustee nor any
Authenticating Agent assumes responsibility for their correct-
ness. 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 905. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the Company,
in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 908 and 913, may
otherwise deal with the Company with the same rights it would
have if it were not the Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 906. 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 any
money received by it hereunder except as expressly provided
herein or otherwise agreed with, and for the sole benefit of, the
Company.
SECTION 907. 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 the Trustee's negligence, wilful
misconduct or bad faith; and
(c) indemnify the Trustee for, 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 703 (except as otherwise provided in Section
703). "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.
In addition to the rights provided to the Trustee
pursuant to the provisions of the immediately preceding paragraph
of this Section 907, when the Trustee incurs expenses or renders
services in connection with an Event of Default specified in
Section 801(d) or Section 801(e), the expenses (including the
reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses
of administration under any applicable Federal or State
bankruptcy, insolvency or other similar law.
SECTION 908. 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. The Trust Agreement and the Guarantee
Agreement pertaining to each Trust shall be deemed to be
specifically described in this Indenture for the purposes of
clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
SECTION 909. 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 $50,000,000 and subject to supervision or
examination by Federal or State authority, or
(b) if and to the extent permitted by the Commission by
rule, regulation or order upon application, a corporation or
other Person organized and doing business under the laws of a
foreign government, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus
of at least $50,000,000 or the Dollar equivalent of the
applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a
political subdivision thereof substantially equivalent to
supervision or examination applicable to United States
institutional trustees,
and, in either case, qualified and eligible under this Article
and the Trust Indenture Act. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 910. 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 911.
(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 911 shall not have been
delivered to the Trustee within 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;
provided that so long as any Preferred Securities remain
outstanding, the Trust which issued such Preferred Securities
shall not execute any Act to remove the Trustee without the
consent of the holders of a majority in aggregate liquidation
preference of Preferred Securities issued by such Trust
outstanding, obtained as provided in the Trust Agreement
pertaining to such Trust.
(d) If at any time:
(1) the Trustee shall fail to comply with Section
908 after written request therefor by the Company or by
any Holder who has been a bona fide Holder for at least
six months, or
(2) the Trustee shall cease to be eligible under
Section 909 and shall fail to resign after written re-
quest therefor by the Company or by any such Holder, or
(3) 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 814, any Holder who has been a bona
fide Holder for at least six months may, on behalf of himself
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 promptly 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 911. If, within one 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 succes-
sor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable
requirements of Section 911, 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 911, any Holder who has been a bona fide Holder of a
Security of such series for at least six 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, and except with respect
to a Trustee appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities pursuant to
subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) a Board Resolution appointing a
successor Trustee, 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 in
accordance with Section 911, the Trustee shall be deemed to
have resigned as contemplated in subsection (b) of this
Section, the successor Trustee shall be deemed to have been
appointed by the Company pursuant to subsection (e) of this
Section and such appointment shall be deemed to have been
accepted as contemplated in Section 911, all as of such date,
and all other provisions of this Section and Section 911 shall
be applicable to such resignation, appointment and acceptance
except to the extent inconsistent with this subsection (f).
(g) The Company (or, should the Company fail so to act
promptly, the successor trustee at the expense of 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 911. 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,
deed or conveyance, 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 one or
more 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 hereunder
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, deed or conveyance, 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 succes-
sor 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 such 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 912. 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 913. 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;
(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 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 arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or
obligation.
SECTION 914. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the
legal requirements of any applicable jurisdiction, the Company
and the Trustee shall have power to appoint, and, upon the
written request of the Trustee or of the Holders of at least 33%
in principal amount of the Securities then Outstanding, the
Company shall for such purpose join with the Trustee in the
execution and delivery of all instruments and agreements
necessary or proper to appoint, one or more Persons approved by
the Trustee either to act as co-trustee, jointly with the
Trustee, or to act as separate trustee, in either case with such
powers as may be provided in the instrument of appointment, and
to vest in such Person or Persons, in the capacity aforesaid, any
property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Company
does not join in such appointment within 15 days after the
receipt by it of a request so to do, or if an Event of Default
shall have occurred and be continuing, the Trustee alone shall
have power to make such appointment.
Should any written instrument or instruments from the
Company be required by any co-trustee or separate trustee so
appointed to more fully confirm to such co-trustee or separate
trustee such property, title, right or power, any and all such
instruments shall, on request, be executed, acknowledged and
delivered by the Company.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject
to the following conditions:
(a) the Securities shall be authenticated and delivered,
and all rights, powers, duties and obligations hereunder in
respect of the custody of securities, cash and other personal
property held by, or required to be deposited or pledged with,
the Trustee hereunder shall be exercised solely, by the
Trustee;
(b) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any
property covered by such appointment shall be conferred or
imposed upon and exercised or performed either by the Trustee
or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing
such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any particular act
is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Company, may
accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, if an Event of
Default shall have occurred and be continuing, the Trustee
shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of
the Company. Upon the written request of the Trustee, the
Company shall join with the Trustee in the execution and
delivery of all instruments and agreements necessary or proper
to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the
Trustee, or any other such trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 915. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents
with respect to the Securities of one or more series, which shall
be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon original issuance and upon
exchange, registration of transfer or partial redemption thereof
or pursuant to Section 304, 306 or 1206, 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 authentication 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, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of
not less than $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 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 Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under
this Section, and the Trustee shall be entitled to be reimbursed
for such payments, in accordance with, and subject to the
provisions of, Section 907.
The provisions of Sections 308, 904 and 905 shall be ap-
plicable to each Authenticating Agent.
If an appointment with respect to the Securities of one
or more series shall be made pursuant to this Section, the
Securities of such series may have endorsed thereon, in lieu of
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.
Dated: ________________________
As Trustee
By______________________
As Authenticating
Agent
By______________________
Authorized Signatory
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 TEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1001. LISTS OF HOLDERS.
Semiannually, not later than June 1 and December 1 in
each year, commencing June 1, 1997, and at 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, 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 1002. REPORTS BY TRUSTEE AND COMPANY.
Not later than July 30 in each year, commencing July 30,
1997, the Trustee shall transmit to the Holders and the
Commission a report, dated as of the next preceding May 31, with
respect to any events and other matters described in Section
313(a) of the Trust Indenture Act, in such manner and to the
extent required by the Trust Indenture Act. The Trustee shall
transmit to the Holders and the Commission, and the Company shall
file with the Trustee (within 30 days after filing with the
Commission in the case of reports which pursuant to the Trust
Indenture Act must be filed with the Commission and furnished to
the 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.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
SECTION 1101. 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, its
properties and assets 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 transfer, or which leases (for a term extending
beyond the last Stated Maturity of the Securities then
Outstanding), the properties and assets of the Company
substantially as an entirety shall be a Person organized and
validly existing under the laws of the United States, any
State thereof, or any other jurisdiction, provided that in the
latter case such Person shall be subject to the laws of the
United States and the States thereof in substantially the same
manner as a Person organized and validly existing under any of
such laws (such corporation being hereinafter sometimes called
the "Successor Corporation"), and shall assume, either by the
operation of applicable law or by an indenture supplemental
hereto, executed and delivered to the Trustee, in form sat-
isfactory to the Trustee, the due and punctual payment of the
principal of and premium, if any, and interest, if any, on all
Outstanding Securities and the performance of every covenant
of this Indenture on the part of the Company to be per-
formed or observed;
(b) immediately after giving effect to such transaction
no Event of Default with respect to Securities of any series,
and no event which, after notice or lapse of time or both,
would become an Event of Default with respect to Securities of
any series, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating
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 transactions have been complied with.
SECTION 1102. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company with or merger by
the Company into any other corporation or any conveyance or other
transfer of the properties and assets of the Company
substantially as an entirety in accordance with Section 1101, the
Successor Corporation 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 Successor Corporation
had been named as the Company herein, and thereafter the
predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities Outstanding
hereunder. 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 consideration,
merger, conveyance or other transfer became effective.
ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
SECTION 1201. 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 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 Eleven; 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 to surrender any right or power herein
conferred upon the Company; or
(c) to add any additional Events of Default with respect
to all or any series of Securities Outstanding hereunder; or
(d) to change or eliminate any provision of this Inden-
ture or to add any new provision to this Indenture; provided,
however, that if such change, elimination or addition shall
adversely affect the interests of any Holder of Securities of
any series Outstanding on the date of such indenture
supplemental hereto in any material respect, such change,
elimination or addition shall become effective with respect to
such series only pursuant to the provisions of Section 1202
hereof or when no Security of such series remains Outstanding;
or
(e) to provide collateral security for all of the
Securities; or
(f) to establish the form or terms of Securities of any
series as contemplated by Sections 201 and 301; or
(g) 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
(h) to evidence and provide for the acceptance of
appointment hereunder by a separate or successor Trustee or
co-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 911(b); or
(i) to provide for the procedures required to permit the
Company to utilize, at its option, a noncertificated system of
registration for all, or any series of, the Securities; or
(j) 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 shall be payable, (2) all or any
series of Securities may be surrendered for registration of
transfer, (3) all or any series of Securities may be
surrendered for exchange and (4) notices and demands to or
upon the Company in respect of all or any series of Securities
and this Indenture may be served; or
(k) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with
any other provision herein, provided that any such cure,
correction or supplement shall not adversely affect the
interests of any Holder of Securities of any Series
Outstanding 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
effect or evidence such changes or additional provisions;
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, the Company and the
Trustee may, without the consent of any Holders, enter
into an indenture supplemental hereto to evidence such
amendment hereof.
SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a major-
ity 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, when authorized by a Board Resolution, 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 or modifying in any manner the rights of the Holders of
Securities of such series under the 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 no such supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or
any installment of principal of or interest on (except as
provided in Section 312 hereof), any Security, 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 change the coin or
currency (or other property), in which any 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 payment on any
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 Security, or
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series (or, if applicable, in
liquidation preference of any series of Preferred Securities),
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 conse-
quences, or reduce the requirements of Section 1304 for quorum
or voting, without, in any such case, the consent of the
Holder of each Outstanding Security of such series, or
(c) modify any of the provisions of this Section,
Section 607 or Section 813 with respect to the Securities of
any series, 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 Holder of each
Outstanding Security affected thereby; 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 911(b), 914 and 1201(h).
Notwithstanding the foregoing, so long as any of the Preferred
Securities remain outstanding, the Trustee may not consent to a
supplemental indenture under this Section 1202 without the prior
consent, obtained as provided in the Trust Agreement pertaining
to the Trust which issued such Preferred Securities, of the
holders of not less than a majority in aggregate liquidation
preference of all Preferred Securities issued by such Trust then
Outstanding which would be affected thereby or, in the case of
changes described in clauses (a), (b) and (c) above, 100% in
aggregate liquidation preference of all such Preferred
Securities. A supplemental indenture which changes or eliminates
any covenant or other provision of this Indenture which has
expressly been included solely for the benefit of one or more
particular series of Securities, or which modifies the rights of
the Holders of Securities of such series 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.
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. A waiver by a Holder of
such Holder's right to consent under this Section shall be deemed
to be a consent of such Holder.
SECTION 1203. 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
901) 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 1204. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, 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 1205. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture
Act as then in effect.
SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES.
Securities of any series 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 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.
SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
If the terms of any particular series of Securities shall
have been established in a Board Resolution or an Officer's
Certificate as contemplated by Section 301, and not in an
indenture supplemental hereto, additions to, changes in or the
elimination of any of such terms may be effected by means of a
supplemental Board Resolution or Officer's Certificate, as the
case may be, delivered to, and accepted by, the Trustee;
provided, however, that such supplemental Board Resolution or
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 Officer's Certificate shall be deemed to be a
"supplemental indenture" for purposes of this Article Twelve.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more, or
all, series 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.
SECTION 1302. 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 for any
purpose specified in Section 1301, to be held at such time and
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 21 nor more than 180 days prior to the date
fixed for the meeting.
(b) If the Trustee shall have been requested to call a
meeting of the Holders of Securities of one or more, or all,
series by the Company or by the Holders of 33% in aggregate
principal amount of all of such series, considered as one
class, for any purpose specified in Section 1301, by written
request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have
given the notice of such meeting within 21 days after receipt
of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Company or the
Holders of Securities of such series in the amount above
specified, as the case may be, 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 shall be valid without notice if the Holders of
all Outstanding Securities of such series 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 by such of them as are not
present at the meeting in person or by proxy, and by the
Company and the Trustee.
SECTION 1303. 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 a Person shall be (a) a
Holder of one or more Outstanding Securities of such series, 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 by such Holder or Holders. The only Persons who shall be
entitled to attend any meeting of Holders of Securities of any
series shall be the Persons entitled to vote at such meeting and
their counsel, any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.
SECTION 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of any series 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; 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,
considered as one class, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Secu-
rities of such series, 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, 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 1305(e), notice
of the reconvening of any meeting adjourned for more than 30 days
shall be given as provided in Section 1302(a) not less than 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
which shall constitute a quorum.
Except as limited by Section 1202, any resolution pre-
sented 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 with
respect to which such meeting shall have been called, considered
as one class; provided, however, that, except as so limited, 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, 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,
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
with respect to which such meeting shall have been held, whether
or not present or represented at the meeting.
SECTION 1305. 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 of such Securities before being voted (except as
provided in Section 104(g)).
(b) Notwithstanding any other provisions of this Inden-
ture, 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, the holding of
Securities 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 1302(b), in which case the Company or the
Holders of Securities of the series 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 represented at the meet-
ing, considered as one class.
(d) At any meeting each Holder or proxy shall be
entitled to one vote for each $1 principal amount of
Securities held or represented by him; 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 1302 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 represented
at the meeting, considered as one class; and the meeting may
be held as so adjourned without further notice.
SECTION 1306. 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 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 of the proceedings of each
meeting of Holders shall be prepared by the secretary of the
meeting, and there shall be attached to said 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 said notice was given as provided in Section 1302
and, if applicable, Section 1304. 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 1307. 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 FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 1401. 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 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 this Indenture and the issuance of the Securities.
ARTICLE FIFTEEN
SUBORDINATION OF SECURITIES
SECTION 1501. 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 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 1502. 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 1503, 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 802 and such declaration shall not have been
rescinded and annulled as provided in Section 802, 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 Articles Four and Five;
(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 701 (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 Fifteen; provided
that no event described in clauses (d) and (e) of Section 801
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 of
reorganization or readjustment that are subordinate in right of
payment to all Senior Indebtedness that 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 Eleven hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of
this Section 1502 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with
the conditions stated in Article Eleven hereof. Nothing in
Section 1501 or in this Section 1502 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 907.
SECTION 1503. 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 1502 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 of execution shall have
been obtained pending such appeal or review.
SECTION 1504. 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 1505. 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 1506. 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 1507. 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 1508. 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 901, in
all respects to assume that no such facts exist; provided,
however, that (i) 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 (ii) in the event of the
execution of an instrument pursuant to Section 702 acknowledging
satisfaction and discharge of this Indenture, 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 that 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 1509. 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 1510. 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 1511. 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 1507, 1508
and 1510 shall not apply to the Company if it acts as Paying
Agent.
SECTION 1512. 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 1513. 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 Fifteen shall be of
no further effect, and the Securities shall no longer be
subordinated in right of payment to the prior payment of Senior
Indebtedness, if the Company shall have delivered to the Trustee
a notice to such effect. Any such notice delivered by the
Company shall not be deemed to be a supplemental indenture for
purposes of Article Twelve.
_________________________
This instrument may be executed in any number of counter-
parts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
THE MONTANA POWER COMPANY
By:_________________________________
ATTEST:
___________________________
THE BANK OF NEW YORK, Trustee
By:_________________________________
ATTEST:
___________________________
<PAGE>
STATE OF _____________________ )
) ss.:
COUNTY OF ___________________ )
On the _____ day of _________, 199_, before me personally
came _________________, to me known, who, being by me duly sworn,
did depose and say that he is the _________________________ of
The Montana Power Company, one of the corporations described in
and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that
he signed his name thereto by like authority.
________________________________
Notary Public
[Notarial Seal]
STATE OF _____________________ )
) ss.:
COUNTY OF ___________________ )
On the _____ day of ____________, 199_, before me
personally came _________________, to me known, who, being by me
duly sworn, did depose and say that she is a _________________ of
The Bank of New York, one of the corporations described in and
which executed the foregoing instrument; that she knows the seal
of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that she signed her
name thereto by like authority.
________________________________
Notary Public
[Notarial Seal]
Exhibit 4(d)
GUARANTEE AGREEMENT
Between
The Montana Power Company
(as Guarantor)
and
The Bank of New York
(as Guarantee Trustee)
dated as of
_____________ ___, 199_
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . 4
SECTION 2.01 Conflict With Trust Indenture Act . . . . . . . . . 4
SECTION 2.02 Lists of Holders of Preferred Securities . . . . . . 4
SECTION 2.03 Reports by the Guarantee Trustee and the
Guarantor . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.04 Preferential Collection of Claims Against the
Guarantor . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.05 Compliance Certificates and Opinions . . . . . . . . 5
SECTION 2.06 Events of Default; Waiver . . . . . . . . . . . . . 6
SECTION 2.07 Notice of Event of Default . . . . . . . . . . . . . 6
SECTION 2.08 Conflicting Interests . . . . . . . . . . . . . . . 6
ARTICLE III POWERS, DUTIES, RESPONSIBILITIES AND RIGHTS OF
THE GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . 6
SECTION 3.01 Certain Powers, Duties and Responsibilities
of the Guarantee Trustee . . . . . . . . . . . . . 6
SECTION 3.02 Certain Rights of the Guarantee Trustee . . . . . . 7
ARTICLE IV GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . 9
SECTION 4.01 Guarantee Trustee; Eligibility . . . . . . . . . . . 9
SECTION 4.02 Compensation and Reimbursement . . . . . . . . . . . 10
SECTION 4.03 Appointment, Removal and Resignation of the
Guarantee Trustee . . . . . . . . . . . . . . . . . 10
ARTICLE V GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.01 Guarantee . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.02 Waiver of Notice and Demand . . . . . . . . . . . . 11
SECTION 5.03 Obligations Not Affected . . . . . . . . . . . . . . 12
SECTION 5.04 Rights of Holders . . . . . . . . . . . . . . . . . 13
SECTION 5.05 Guarantee of Payment . . . . . . . . . . . . . . . . 13
SECTION 5.06 Subrogation . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.07 Independent Obligations . . . . . . . . . . . . . . 13
ARTICLE VI SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.01 Subordination . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7.01 Termination . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 14
SECTION 8.01 Successors and Assigns . . . . . . . . . . . . . . . 14
SECTION 8.02 Amendments . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.03 Notices . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.04 Benefit . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.05 Interpretation . . . . . . . . . . . . . . . . . . . 16
SECTION 8.06 Governing Law . . . . . . . . . . . . . . . . . . . 17
CROSS-REFERENCE TABLE
---------------------
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- ---------
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.01
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . 4.01, 2.08
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01, 3.02
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.07
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . 5.04, 2.06
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
_____________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
__________ __, 199_, is executed and delivered by The Montana Power
Company, a Montana corporation (the "Guarantor"), and The Bank of New York,
as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of Montana Power Capital I, a Delaware statutory business trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of _________ __, 199__ among the Trustees of
the Issuer named therein and The Montana Power Company, as Depositor, the
Issuer is issuing as of the date hereof $___________ aggregate liquidation
amount of its ___% Cumulative Quarterly Income Preferred Securities (the
"Preferred Securities") representing preferred undivided beneficial
ownership interests in the Issuer and having the terms set forth in the
Trust Agreement;
WHEREAS, the Preferred Securities are to be issued for sale by
the Issuer and the proceeds are to be invested in $____ principal amount
of Debentures (as defined in the Trust Agreement); and
WHEREAS, in order to enhance the value of the Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree,
to the extent set forth herein, to pay to the Holders (as defined herein)
the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase of Debentures,
which purchase the Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Guarantee Agreement for the benefit of
the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS.
As used in this Guarantee Agreement, the terms set forth below
shall, unless the context otherwise requires, have the following meanings.
Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust
Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the
foregoing.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, as amended, or, if at any time after the date of execution and
delivery of this Guarantee Agreement such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act,
then the body, if any, performing such duties at such time.
"Common Securities" means the securities representing common
undivided beneficial ownership interests in the assets of the Issuer.
"Dollar" or "$" means a dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.
"Event of Default" means a failure by the Guarantor to perform
any of its payment or other obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by or on behalf of the Issuer:
(i) any accrued and unpaid Distributions that are required to be paid on
such Preferred Securities but only if and to the extent that the Property
Trustee has available in the Payment Account funds sufficient to make such
payment, (ii) the Redemption Price with respect to the Preferred Securities
called for redemption by the Issuer but only if and to the extent that the
Property Trustee has available in the Payment Account funds sufficient to
make such payment, (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (unless Debentures are distributed
to the Holders), the lesser of (a) the aggregate of the Liquidation Amount
and all accrued and unpaid Distributions on the Preferred Securities to the
date of payment, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each
such Successor Guarantee Trustee.
"Guarantor Request" means a written request or order signed in
the name of the Guarantor by an Authorized Officer and delivered to the
Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities then outstanding;
provided, however, that in determining whether the holders of the requisite
percentage of Preferred Securities have given any request, notice, consent
or waiver hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor.
"Indenture" means the Indenture dated as of ________ __, 199_,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee pursuant to which the Debentures are issued.
"Majority in liquidation amount of the Preferred Securities"
means a vote by Holders, voting separately as a class, of more than 50% of
the aggregate liquidation amount of all Preferred Securities.
"Officer's Certificate" means a certificate signed by the
Chairman of the Board, the President, any Vice President, the Treasurer,
any Assistant Treasurer, or any other officer or agent of the Guarantor
duly authorized by the Board of Directors of the Guarantor to act in
respect of matters relating to this Guarantee Agreement, delivered to the
Guarantee Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Guarantor, or other counsel acceptable to the Guarantee
Trustee.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary,
any assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge
of and familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section
4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Guarantee Agreement limits, qualifies or
conflicts with another provision hereof which is required or deemed to be
included in this Guarantee Agreement by, or is otherwise governed by, any
of the provisions of the Trust Indenture Act, such other provision shall
control; and if any provision hereof otherwise conflicts with the Trust
Indenture Act, the Trust Indenture Act shall control.
SECTION 2.02 LISTS OF HOLDERS OF PREFERRED SECURITIES.
Semiannually, not later than June 1 and December 1 in each year,
commencing June 1, 1997, and at such other times as the Guarantee Trustee
may request in writing, the Guarantor shall furnish or cause to be
furnished to the Guarantee Trustee information as to the names and
addresses of the Holders, and the Guarantee Trustee shall preserve such
information and similar information received by it in any other capacity
and afford to the Holders access to information so preserved by it, all to
such extent, if any, and in such manner as shall be required by the Trust
Indenture Act.
SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE AND THE GUARANTOR.
Not later than July 31 in each year, commencing July 31, 1997,
the Guarantee Trustee shall transmit to the Holders and the Commission a
report, dated as of the next preceding May 31, with respect to any events
and other matters described in Section 313(a) of the Trust Indenture Act,
in such manner and to the extent required by the Trust Indenture Act. The
Guarantee Trustee shall transmit to the Holders and the Commission, and the
Guarantor shall file with the Guarantee Trustee (within 30 days after
filing with the Commission in the case of reports which pursuant to the
Trust Indenture Act must be filed with the Commission and furnished to the
Guarantee Trustee) and transmit to the Holders, such other information,
reports and other documents, if any, at such times and in such manner, as
shall be required by the Trust Indenture Act.
SECTION 2.04 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
GUARANTOR.
If the Guarantee Trustee shall be or become a creditor of the
Guarantor or any other obligor upon the Preferred Securities (other than by
reason of a relationship described in Section 311(b) of the Trust Indenture
Act), the Guarantee Trustee shall be subject to any and all applicable
provisions of the Trust Indenture Act regarding the collection of claims
against the Guarantor or such other obligor. For purposes of Section
311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Guarantor for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares
or merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the
security is received by the Guarantee Trustee simultaneously with the
creation of the creditor relationship with the Guarantor arising from
the making, drawing, negotiating or incurring of the draft, bill of
exchange, acceptance or obligation.
SECTION 2.05 COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Guarantee
Agreement, upon any application or request by the Guarantor to the
Guarantee Trustee to take any action under any provision of this Guarantee
Agreement, the Guarantor shall, if requested by the Guarantee Trustee,
furnish to the Guarantee Trustee an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Guarantee Agreement
relating to the proposed action (including any covenants compliance with
which constitutes a condition precedent) have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Guarantee
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that each Person signing such certificate
or opinion has read such covenant or condition and the
definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such Person,
such Person has made such examination or investigation as is
necessary to enable such Person to express an informed opinion as
to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 2.06 EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of the Preferred
Securities may, by vote, on behalf of all of the Holders, waive any past
Event of Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Guarantee
Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.07 NOTICE OF EVENT OF DEFAULT.
The Guarantee Trustee shall give notice of any Event of Default
hereunder to the Holders of Preferred Securities in the manner and to the
extent required to do so by the Trust Indenture Act, unless such Event of
Default shall have been cured or waived.
SECTION 2.08 CONFLICTING INTERESTS.
If the Guarantee Trustee shall have or acquire any conflicting
interest within the meaning of the Trust Indenture Act, it shall either
eliminate such conflicting interest or resign to the extent, in the manner
and with the effect, and subject to the conditions, provided in the Trust
Indenture Act and this Guarantee Agreement. The Trust Agreement and the
Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES, RESPONSIBILITIES AND
RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01 CERTAIN POWERS, DUTIES AND RESPONSIBILITIES OF THE
GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee
shall not transfer this Guarantee Agreement or any rights hereunder to
any Person except a Holder exercising his or her rights pursuant to
Section 5.04 or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee,
and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders by such appropriate judicial
proceedings as it shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or
agreement in this Guaranty Agreement or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
(c) The Guarantee Trustee shall have and be subject to all the
duties and responsibilities specified with respect to an indenture
trustee in the Trust Indenture Act and no implied covenants or
obligations shall be read into this Guarantee Agreement against the
Guarantee Trustee.
(d) No provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) Notwithstanding anything contained in this Guarantee
Agreement to the contrary, the duties and responsibilities of the
Guarantee Trustee under this Guarantee Agreement shall be subject to
the protections, exculpations and limitations on liability afforded to
the Guarantee Trustee under this Guarantee Agreement and the Trust
Indenture Act, including those deemed by the Trust Indenture Act to be
included herein.
(f) Whether or not therein expressly so provided, every
provision of this Guarantee Agreement relating to the conduct or
affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section.
SECTION 3.02 CERTAIN RIGHTS OF THE GUARANTEE TRUSTEE.
Subject to the provisions of Section 3.01 and to the applicable
provisions of the Trust Indenture Act:
(a) the Guarantee Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Guarantor shall be
sufficiently evidenced by a Guarantor Request, or as otherwise
expressly provided herein, and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate;
(d) the Guarantee Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder pursuant to this
Guarantee Agreement, unless such Holder shall have offered to the
Guarantee Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Guarantee Trustee
shall determine to make such further inquiry or investigation, it
shall (subject to applicable legal requirements) be entitled to
examine, during normal business hours, the books, records and premises
of the Guarantor, personally or by agent or attorney;
(g) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;
(h) the Guarantee Trustee shall not be charged with knowledge of
any Event of Default unless either (1) a Responsible Officer of the
Trustee shall have actual knowledge of the Event of Default or (2)
written notice of such Event of Default shall have been given to the
Guarantee Trustee by the Guarantor, any other obligor on the Preferred
Securities or by any Holder of the Preferred Securities; and
(i) no provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred
or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY.
There shall at all times be a Guarantee Trustee hereunder which
shall be
(a) a corporation organized and doing business under the laws
of the United States, any State or Territory thereof or the
District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by
Federal or State authority, or
(b) if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign
government, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
$50,000,000 or the Dollar equivalent of the applicable foreign
currency and subject to supervision or examination by authority of
such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable
to United States institutional trustees,
and, in either case, qualified and eligible under this Article and the
Trust Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of such supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 4.02 COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time such
reasonable compensation as the Guarantor and the Guarantee Trustee shall
from time to time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Guarantee Trustee in
accordance with the provisions of this Guarantee (including the reasonable
compensation and expenses of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify each of the Guarantee Trustee and any
predecessor Guarantee Trustee for, and to hold it harmless from and
against, any and all loss, damage, claim, liability or expense, including
taxes (other than taxes based upon the income of the Guarantee Trustee)
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance of the trust created by, or the
administration of, this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the
Guarantor under this Section, the Guarantee Trustee shall have a lien prior
to the Preferred Securities upon all the property and funds held or
collected by the Guarantee Trustee as such, except funds held in trust for
the payment of principal of, and premium (if any) or interest on,
particular obligations of the Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the termination of
this Guarantee Agreement.
SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF THE
GUARANTEE TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of Default shall
have occurred and be continuing, the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.03 within 60 days
after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court
may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and each
removal of the Guarantee Trustee and each appointment of a successor
Guarantee Trustee to all Holders in the manner provided in Section 8.03
hereof. Each notice shall include the name of the successor Guarantee
Trustee and the address of its Corporate Trust Office.
ARTICLE V
GUARANTEE
SECTION 5.01 GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.02 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.03 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period
on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04 RIGHTS OF HOLDERS.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) if an Event of Default has occurred and is
continuing, the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement
or exercising any trust or power conferred upon the Guarantee Trustee under
this Guarantee Agreement; and (iv) any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement without first instituting a legal proceeding against
the Issuer or any other person or entity.
SECTION 5.05 GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not
of collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication).
SECTION 5.06 SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by
the Guarantor under this Guarantee Agreement; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire
by way of subrogation or any indemnity, reimbursement or other agreement,
in all cases as a result of payment under this Guarantee Agreement, if, at
the time of any such payment, any amounts of Guarantee Payments are due and
unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to
the Holders.
SECTION 5.07 INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Guarantee Agreement notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01 SUBORDINATION.
This Guarantee Agreement will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment
to all Senior Indebtedness (as defined in the Indenture) of the Guarantor
to the same extent as the Debentures. Nothing in this Section 6.01 shall
apply to claims of, or payments to, the Guarantee Trustee under or pursuant
to Section 4.02 hereof.
ARTICLE VII
TERMINATION
SECTION 7.01 TERMINATION.
This Guarantee Agreement shall terminate and be of no further
force and effect upon: (i) full payment of the Redemption Price of all
Preferred Securities, and all accrued and unpaid Distributions to the date
of redemption, (ii) the distribution of Debentures to Holders in exchange
for all of the Preferred Securities or (iii) full payment of the amounts
payable in accordance with the Trust Agreement upon liquidation of the
Issuer. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at
any time any Holder must restore payment of any sums paid with respect to
Preferred Securities or under this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that is
permitted under Article Eleven of the Indenture, the Guarantor shall not
assign its obligations hereunder.
SECTION 8.02 AMENDMENTS.
This Guarantee Agreement may be amended only by an instrument in
writing entered into by the Guarantor and the Guarantee Trustee. Except
with respect to any changes which do not adversely affect the rights of
Holders (in which case no consent of Holders will be required), this
Guarantee Agreement may only be amended with the prior approval of the
Holders of not less than 66 2/3% in aggregate liquidation amount of all the
outstanding Preferred Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of Holders shall apply to the giving of
such approval. Nothing herein contained shall be deemed to require that
the Guarantee Trustee enter into any amendment of this Guarantee Agreement.
SECTION 8.03 NOTICES.
Any notice, request or other communication required or permitted
to be given hereunder shall be in writing, duly signed by the party giving
such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders
of the Preferred Securities:
The Montana Power Company
40 East Broadway
Butte, Montana 59701-9989
Facsimile No: (406) 497-2374
Attention: Treasurer
(b) if given to the Issuer, in care of the Administrative
Trustees, at the Issuer's (and the Administrative Trustee's) address
set forth below or such other address as the Administrative Trustees
on behalf of the Issuer may give notice of to the Holders:
Montana Power Capital I
c/o The Montana Power Company
40 East Broadway
Butte, Montana 59701-9989
Facsimile No: (406) 497-3018
Attention: Administrative Trustees
(c) if given to the Guarantee Trustee, to the address set forth
below or such other address as the Guarantee Trustee may give notice
of to the Holders of the Preferred Securities:
The Bank of New York
101 Barclay Street
21 West
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Administration
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of
which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 8.04 BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders
and, subject to Section 3.01(a), is not separately transferable from the
Preferred Securities.
SECTION 8.05 INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(b) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(c) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(e) a reference to the singular includes the plural and vice
versa; and
(f) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
The Montana Power Company
By: ___________________________________
Name:
Title:
The Bank of New York,
as Guarantee Trustee
By: __________________________________
Name:
Title:
Exhibit 4(f)
THE MONTANA POWER COMPANY
OFFICER'S CERTIFICATE
________________, the _______________ of The Montana Power Company
(the "Company"), pursuant to the authority granted in the Board Resolutions
of the Company dated ____________, 1996, and Sections 102, 201 and 301 of
the Indenture defined herein, does hereby certify to The Bank of New York
(the "Trustee"), as Trustee under the Indenture of the Company (For
Unsecured Subordinated Debt Securities relating to Trust Securities) dated
as of ________________ (the "Indenture") that:
1. The securities of the first series to be issued under the
Indenture shall be designated "Junior Subordinated Deferrable
Interest Debentures, ____% Series due ____" (the "Debentures of
the First Series"). The Debentures of the First Series are to be
issued in the name of The Bank of New York, as property trustee
(the "Property Trustee"), pursuant to the Amended and Restated
Trust Agreement dated as of _______________ (the "Trust
Agreement") relating to Montana Power Capital I, a Delaware
statutory business trust (the "Trust"), on behalf of the Trust;
2. The aggregate principal amount of the Debentures of the First
Series shall be limited to $__________ at any time Outstanding,
except as contemplated in Section 301(b) of the Indenture;
3. The Stated Maturity of the principal of the Debentures of the
First Series shall be ____________, ____;
4. The Debentures of the First Series shall bear interest until the
principal thereof shall be paid or made available for payment at
the rate of ____% per annum payable quarterly in arrears on March
31, June 30, September 30 and December 31 of each year (each, an
"Interest Payment Date"), commencing _________, 1996. Interest
on the Debentures of the First Series will accrue from, and
including, the date of original issuance and will accrue to, and
including, the first Interest Payment Date, and, for each
subsequent Interest Payment Date, will accrue from, and
excluding, the last Interest Payment Date through which interest
has been paid or duly provided for to, and including, such
Interest Payment Date;
5. The Regular Record Date for the payment of each installment of
interest on the Debentures of the First Series shall be the
Business Day next preceding the corresponding Interest Payment
Date; provided, however, that if the Debentures of the First
Series are held neither by the Trust nor by a securities
depositary, the Company shall have the right to change the
Regular Record Date by an Officer's Certificate;
6. In accordance with Section 312 of the Indenture, the Company, by
written notice given as provided below, may extend and re-extend
the duration of any interest payment period to a maximum duration
of the lesser of 20 consecutive quarters or the period ending on
the Maturity of the Debentures of the First Series (an "Extension
Period"), during which period interest will be compounded
quarterly. 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 and unpaid (together with
interest thereon at the annual rate of _____% to the extent
permitted by applicable law). Upon such payment in full, such
extension period shall terminate. However, during any such
Extension Period, the Company may not (i) declare or pay any
dividends or distributions, on, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital
stock (other than dividends or distributions in common stock of
the Company), or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem, or make any
sinking fund payment with respect to, any indebtedness that is
pari passu with or junior in interest to the Debentures of the
First Series, or make any guarantee payments with respect to such
indebtedness. At least one Business Day prior to the earlier of
(i) any date on which distributions on the _____% Cumulative
Quarterly Income Preferred Securities of the Trust ("Preferred
Securities") shall be payable or (ii) any date on which an
Administrative Trustee (as defined in the Trust Agreement) shall
be required to give notice to the New York Stock Exchange or
other applicable self-regulatory organization or to holders of
the Preferred Securities of the record date or the date such
distribution shall be payable, but in any event not less than one
Business Day prior to such date, the Company shall give the
Property Trustee, the Administrative Trustees and the Trustee
written notice of each election by the Company to extend or re-
extend the duration of any interest payment period and the
duration of such extension or re-extension;
7. (i) The principal and each installment of interest on the
Debentures of the First Series shall be payable, (ii)
registration of transfers and exchanges in respect of the
Debentures of the First Series may be effected, and (iii) notices
and demands to or upon the Company in respect of the Debentures
of the First Series and the Indenture be served, at the office or
agency of the Company in The City of New York; provided that
payment of interest may be made at the option of the Company by
check mailed to the address of the persons entitled thereto or,
with respect to a registered holder of $1,000,000 or more
aggregate principal amount of the Debentures of the First Series
who had delivered a written request to the Trustee at least 14
days prior to the relevant Interest Payment Date electing to have
payments by wire transfer to a designated account in the United
States, by wire transfer of immediately available funds to such
designated account. The Trustee initially will be the agency of
the Company for such service of notices and demands. The Company
initially will be the Security Registrar and the Paying Agent for
the Debentures of the First Series;
8. The Debentures of the First Series will be redeemable on or after
_______ at the option of the Company, at any time and from time
to time, in whole or in part, at a redemption price equal to 100%
of the principal amount of the Debentures of the First Series
being redeemed, together with any accrued and unpaid interest,
including Additional Interest, if any, to the redemption date;
provided, however, that the Company may not redeem less than all
the Debentures of the First Series Outstanding unless all accrued
and unpaid interest has been paid in full (or duly provided for)
on all Debentures of the First Series for all quarterly interest
periods terminating on or prior to the date of redemption;
9. The Debentures of the First Series also will be redeemable at the
option of the Company upon the occurrence and during the
continuation of a Tax Event or an Investment Company Event, in
whole, but not in part, on any date within 90 days of the
occurrence of such Tax Event or an Investment Company Event, at a
redemption price equal to 100% of the principal amount of the
Debentures of the First Series then Outstanding, together with
any accrued and unpaid interest, including Additional Interest,
if any, to the redemption date. "Tax Event" means the receipt by
the Trust or the Company of an opinion of counsel experienced in
such matters to the effect that, as a result of any amendment to,
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, or as a result of any official administrative
or judicial pronouncement or decision interpreting or applying
such laws or regulations, which amendment or change shall become
effective or which pronouncement or decision shall be announced
on or after the date of original issuance of the Preferred
Securities, there is more than an insubstantial risk that (i) the
Trust is, or within 90 days of the date thereof, will be, subject
to Federal income tax with respect to income received or accrued
on the Debentures of the First Series, (ii) interest payable by
the Company on the Debentures of the First Series is not, or
within 90 days of the date thereof, will not be, fully deductible
by the Company for Federal income tax purposes, or (iii) the
Trust is, or within 90 days of the date thereof, will be, subject
to more than a de minimis amount of other taxes, duties or other
governmental charges. "Investment Company Event" means the
receipt by the Trust of an opinion of counsel, rendered by a law
firm having a recognized national tax and securities practice, to
the effect that as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency
or regulatory authority, the Trust is or will be considered an
"investment company" that is required to be registered under the
Investment Company Act of 1940, as amended, which change in law,
regulation, interpretation or application shall become effective
on or after the date of original issuance of the Preferred
Securities.
10. In the event that, at any time subsequent to their initial
authentication and delivery, the Debentures of the First Series
are to be held by a securities depositary, the Company, at such
time, may establish the matters contemplated in clause (r) in the
second paragraph of Section 301 of the Indenture in an Officer's
Certificate supplemental to this Certificate;
11. No service charge shall be made for the registration of transfer
or exchange of the Debentures of the First Series; provided,
however, that the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed
in connection with their exchange or transfer;
12. The Debentures of the First Series shall have such other terms
and provisions as are provided in the form set forth in Exhibit A
hereto, and shall be issued in substantially such form;
13. The undersigned has read all of the covenants and conditions
contained in the Indenture relating to the issuance of the
Debentures of the First Series and the definitions in the
Indenture relating thereto and in respect of which this
certificate is made;
14. The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents
accompanying this certificate, and upon discussions by the
undersigned with officers and employees of the Company familiar
with the matters set forth herein;
15. In the opinion of the undersigned, he has made such examination
or investigation as is necessary to enable the undersigned to
express an informed opinion whether or not such covenants and
conditions have been complied with; and
16. In the opinion of the undersigned, such conditions and covenants
and conditions precedent, if any (including any covenants
compliance with which constitutes a condition precedent) to the
authentication and delivery of the Debentures of the First Series
requested in the accompanying Company Order have been complied
with.
All capitalized terms used in this Certificate which are not
defined herein but are defined in the Indenture shall have the meanings set
forth in the Indenture.
IN WITNESS WHEREOF, I have executed this Officer's Certificate this
____ day of _________________, ____.
________________________________________
Name: [Authorized Officer]
Title:
NO. R-1
EXHIBIT A
[FORM OF FACE OF DEFERRABLE INTEREST JUNIOR SUBORDINATED DEBENTURE]
THE MONTANA POWER COMPANY
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES,
____% SERIES DUE _____
THE MONTANA POWER COMPANY, a corporation duly organized and existing
under the laws of the State of Montana (herein referred to as the
"Company"), for value received, hereby promises to pay to
____________________________________, or registered assigns, the principal
sum of ____________________ Dollars on ____________, ____, and, except as
hereinafter provided, to pay interest on said principal sum from, and
including, _________, 1996 or from, and excluding, the most recent Interest
Payment Date through which interest has been paid or duly provided for,
quarterly on March 31, June 30, September 30 and December 31 of each year,
commencing _________, 1996, at the rate of ____% per annum, plus Additional
Interest, if any, until the principal hereof shall be paid or made
available for payment. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, 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 for such interest, which shall be the Business Day next
preceding such Interest Payment Date.
Payment of the principal of, and premium, if any, and interest
on, this Security will be made at the office or agency of the Company
maintained for that purpose in The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that, at
the option of the Company, interest on this Security may be paid by check
mailed to the address of the person entitled thereto, as such address shall
appear on the Security Register or, with respect to a registered holder of
$1,000,000 or more aggregate principal amount of the Securities of this
series who had delivered a written request to the Trustee at least 14 days
prior to the relevant Interest Payment Date electing to have payments by
wire transfer to a designated account in the United States, by wire
transfer of immediately available funds to such designated account.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof 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 MONTANA POWER COMPANY
By:_______________________________________
ATTEST:
____________________________
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of a series designated pursuant to
the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:_______________________________________
Authorized Signatory
[FORM OF REVERSE OF
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE]
This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of __________, 1996
(herein, together with any amendments thereto, called the "Indenture"),
between the Company and The Bank of New York, as Trustee (herein called the
"Trustee"), and reference is hereby made to the Indenture, including any
supplemental indenture, Board Resolutions and Officer's Certificate filed
with the Trustee creating the Securities for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the
Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities have been, and are to be, authenticated and
delivered. These Securities are limited in aggregate principal amount to
$___________.
The Securities of this series are subject to redemption upon not
less than 30 nor more than 60 days' notice by mail, at any time on or after
______________ as a whole or in part, at the election of the Company, at a
Redemption Price equal to 100% of the principal amount, together with
accrued and unpaid interest, including Additional Interest, to the
Redemption Date.
The Securities of this series also will be redeemable at the
option of the Company if a Tax Event or an Investment Company Event, each
as defined in the Indenture, shall occur and be continuing, in whole, but
not in part, on any date within 90 days of the occurrence of such Tax Event
or Investment Company Event, at a redemption price equal to 100% of the
principal amount of the Securities of this series then Outstanding plus any
accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date, upon not less than 30 nor more than 60 days' notice given
as provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
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.
If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
So long as no Event of Default under the Indenture with respect
to the Securities shall have occurred and be continuing, the Company, by
written notice given as provided below, may extend and re-extend the
duration of any interest payment period to a maximum duration of the lesser
of 20 consecutive quarters or the period ending on the Maturity of the
Debentures (an "Extended Interest Payment Period") during which period
interest will be compounded quarterly. 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 and unpaid (together with
interest thereon at the annual rate of _____% to the extent permitted by
applicable law). Upon such payment in full, such extension period shall
terminate. However, during such Extended Interest Payment Period the
Company shall not declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than dividends or distributions in common
stock of the Company), or make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem, or make any sinking
fund payment with respect to, any indebtedness that is pari passu with or
junior in interest to the Securities of this series, or make any guarantee
payments with respect to such indebtedness. At least one Business Day
prior to the earlier of (i) the date distributions on the Preferred
Securities are payable and (ii) the date an administrative trustee named in
the Trust Agreement shall be required to give notice to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of
the Preferred Securities of the record date or the date such distributions
are payable, but in any event not less than one Business Day prior to such
record date, the Company shall give the Property Trustee, the
administrative trustees and the Trustee written notice of each election by
the Company to extend or re-extend the duration of any interest payment
period and the duration of such extension or re-extension.
The Securities of this series are issuable only in registered
form without coupons in denominations of $25 and any integral multiple
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 this series and of like tenor
and of authorized denominations, as requested by the Holder surrendering
the same.
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.
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.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Exhibit 5(a)
THE MONTANA POWER COMPANY
40 EAST BROADWAY
BUTTE, MONTANA 59701
Michael E. Zimmerman - Vice President
and General Counsel
October 16, 1996
The Montana Power Company
40 East Broadway
Butte, Montana 59701
Ladies and Gentlemen:
Referring to the proposed registration of Cumulative Quarterly
Income Preferred Securities (Preferred Securities) of Montana Power Capital
I (Trust) having an aggregate liquidation preference of up to $80,000,000,
such Preferred Securities to be offered in an underwritten public offering;
of a Guarantee of The Montana Power Company (Company) with respect to the
Preferred Securities; and the issuance and sale to the Trust of up to
$80,000,000 in aggregate principal amount of the Company's Junior
Subordinated Deferrable Interest Debentures (Debentures) pursuant to the
terms of an indenture from the Company to The Bank of New York, as trustee
(Indenture), as contemplated in the Registration Statement (Registration
Statement) on Form S-3 to be filed by the Company on or about the date
hereof with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, I am of the opinion that:
1. All requisite action necessary to make the Guarantee a valid,
legal and binding obligation of the Company will have been taken when
the Board of Directors of the Company, or an officer duly authorized
thereby, shall have taken such action as may be necessary to fix and
determine the terms of the Guarantee and the Guarantee shall have been
duly executed and delivered;
2. All requisite action necessary to make the Debentures valid, legal
and binding obligations of the Company will have been taken when the
Board of Directors of the Company, or an officer duly authorized
thereby, shall have taken such action as may be necessary to fix and
determine the terms of the Debentures, the Indenture shall have been
executed and delivered, and the Debentures shall have been issued and
delivered to the Trust;
in each case, except as such may be limited by bankruptcy, insolvency or
other laws affecting creditors' rights generally and by general principles
of equity.
I am a member of the Montana Bar and do not hold myself out as an
expert on the laws of the State of New York. As to all matters of New York
law, I have relied with your consent upon an opinion of even date herewith
addressed to you by Reid & Priest LLP.
I hereby consent to the use of my name in the Registration
Statement and to the use of this opinion as an exhibit thereto.
Sincerely,
/s/ Michael E. Zimmerman
-------------------------
Michael E. Zimmerman
Exhibit 5(b) and 8
REID & PRIEST LLP
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019
TELEPHONE 212 603-2000
FAX 212 603-2001
October 16, 1996
The Montana Power Company
40 East Broadway
Butte, Montana 59701
Ladies and Gentlemen:
Referring to the proposed registration of (i)
Cumulative Quarterly Income Preferred Securities (Preferred
Securities) of Montana Power Capital I (Trust) having an
aggregate liquidation preference of up to $80,000,000, such
Preferred Securities to be offered in an underwritten public
offering; and (ii) a Guarantee of The Montana Power Company
(Company) with respect to the Preferred Securities; and the
issuance and sale to the Trust of up to $80,000,000 in aggregate
principal amount of the Company's Junior Subordinated Deferrable
Interest Debentures (Debentures) pursuant to the terms of an
indenture from the Company to The Bank of New York, as trustee
(Indenture), as contemplated in the Registration Statement
(Registration Statement) on Form S-3 to be filed by the Company
on or about the date hereof with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, we are
of the opinion that:
1. All requisite action necessary to make the Guarantee a
valid, legal and binding obligation of the Company will have
been taken when the Board of Directors of the Company, or an
officer duly authorized thereby, shall have taken such
action as may be necessary to fix and determine the terms of
the Guarantee and the Guarantee shall have been duly
executed and delivered;
2. All requisite action necessary to make the Debentures
valid, legal and binding obligations of the Company will
have been taken when the Board of Directors of the Company,
or an officer duly authorized thereby, shall have taken such
action as may be necessary to fix and determine the terms of
the Debentures, the Indenture shall have been executed and
delivered, and the Debentures shall have been issued and
delivered to the Trust;
in each case, except as such may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights generally
and by general principles of equity.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of the State of Montana. As
to all matters of Montana law, we have relied with your consent
upon an opinion of even date herewith addressed to you by Michael
E. Zimmerman, Vice President and General Counsel to the Company.
We confirm our opinion as set forth under the caption
"Certain United States Federal Income Tax Consequences" in the
prospectus constituting a part of the Registration Statement.
We hereby consent to the use of our name in the
Registration Statement and to the use of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
/s/ REID & PRIEST LLP
---------------------
REID & PRIEST LLP
Exhibit 5(c)
Richards Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
October 16, 1996
Montana Power Capital I
c/o The Montana Power Company
40 East Broadway
Butte, Montana 59701
Re: Montana Power Capital I
-----------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for The
Montana Power Company, a Montana corporation (the "Company"), and
Montana Power Capital I, a Montana 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
October 15, 1996 (the "Certificate"), as filed in the office of
the Secretary of State of the State of Delaware (the "Secretary
of State") on October 15, 1996;
(b) The Trust Agreement of the Trust, dated as of
October 15, 1996, among the Company, as Depositor, and the
trustees of the Trust named therein;
(c) The Registration Statement (the "Registration
Statement") on Form S-3, including a preliminary prospectus (the
"Prospectus") relating to the ___% Cumulative Quarterly Income
Preferred Securities of the Trust representing preferred
undivided beneficial interests in the assets of the Trust (each,
a "Preferred Security" and collectively, the "Preferred
Securities"), as proposed to be filed by the Company and the
Trust with the Securities and Exchange Commission on or about
October 16, 1996;
(d) A form of Amended and Restated Trust Agreement of
the Trust, to be entered into among the Company, as Depositor,
the trustees of the Trust named therein, and the holders, from
time to time, of undivided beneficial interests in the assets of
the Trust (including Exhibits A, B and D thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated
October 16, 1996, obtained from the Secretary of State.
Initially capitalized terms used herein and not
otherwise defined are used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a)
through (e) above. In particular, we have not reviewed any
document (other than the documents listed in paragraphs (a)
through (e) 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 Trust Agreement 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 or due
organization or due formation, 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, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us,
(iv) 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) the due authorization,
execution and delivery by all parties thereto of all documents
examined by us, (vi) the receipt by each Person to whom a
Preferred Security is to be issued by the Trust (collectively,
the "Preferred Security Holders") of a Preferred Securities
Certificate for such Preferred Security and the payment for the
Preferred Security acquired by it, in accordance with the Trust
Agreement and the Registration Statement, and (vii) that the
Preferred Securities are issued and sold to the Preferred
Security Holders in accordance with the Trust Agreement and the
Registration Statement. We have not participated in the
preparation of the Registration Statement and assume no
responsibility for its 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 which 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.
2. The Preferred Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below,
fully paid and nonassessable undivided beneficial interests in
the assets of the Trust.
3. The Preferred 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 Preferred
Security Holders may be obligated to make payments as set forth
in the Trust Agreement.
We consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the
Registration Statement. In addition, we hereby consent to the
use of our name under the heading "Legality" in the Prospectus.
In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission
thereunder. 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,
/s/ Richards, Layton & Finger
Exhibit 12(a)
THE MONTANA POWER COMPANY
Computation of Ratio of Earnings to Fixed Charges
(Dollars in Thousands)
TWELVE MONTHS
ENDED
JUNE 30, 1996
-------------
Net Income . . . . $ 69,192
33,807
Income Taxes . . . --------
$102,999
--------
Fixed Charges:
Interest . . . . $ 48,255
Amortization of
Debt Discount,
Expense and
Premium . . . . 1,567
34,925
Rentals . . . . . --------
$ 84,747
--------
Earnings Before
Income Taxes and $187,746
Fixed Charges . . ========
Ratio of Earnings to 2.22X
Fixed Charges . . ========
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Net Income . . . $ 59,053 $115,963 $107,196 $107,065 $105,715
21,573 53,152 54,120 45,639 50,394
Income Taxes . . -------- -------- -------- -------- --------
$ 80,626 $169,115 $161,316 $152,704 $156,109
-------- -------- -------- -------- --------
Fixed Charges:
Interest . . . $ 47,330 $ 44,096 $ 48,142 $ 48,810 $ 52,836
Amortization of
Debt Discount,
Expense and
Premium . . . 1,567 1,666 1,768 1,878 1,245
35,300 36,586 36,631 36,905 37,638
Rentals . . . . -------- -------- -------- -------- --------
$ 84,197 $ 82,348 $ 86,541 $ 87,593 $ 91,719
-------- -------- -------- -------- --------
Earnings Before
Income Taxes and $164,823 $251,463 $247,857 $240,297 $247,828
Fixed Charges . ======== ======== ======== ======== ========
Ratio of Earnings 1.96X 3.05X 2.86X 2.74X 2.70X
to Fixed Charges ======== ======== ======== ======== ========
Exhibit 25(a)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
MONTANA POWER CAPITAL I
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
40 East Broadway
Butte, Montana 59701-9394
(Address of principal executive offices) (Zip code)
_________________
MONTANA POWER CAPITAL I [ ]% CUMULATIVE QUARTERLY INCOME
PREFERRED SECURITIES, SERIES A*
(Title of the indenture securities)
------------------
*Specific title to be determined in connection with sale of
Montana Power Capital I [ ]% Cumulative Quarterly Income
Preferred Securities, Series A.
<PAGE>
ITEM 1. GENERAL INFORMATION.
------------------
*Pursuant to General Instruction B, the Trustee has
responded only to Items 1, 2 and 16 of this form since to the
best of the knowledge of the Trustee the obligor is not in
default under any indenture under which the Trustee is a trustee.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Superintendent of Banks of the 2 Rector Street, New York,
State of New York N.Y. 10006 and Albany, N.Y.
Federal Reserve Bank of New York 12203
Federal Deposit Insurance 33 Liberty Plaza, New York,
Corporation N.Y. 10045
New York Clearing House 550 17th Street, N.W.,
Washington, D.C. 20429
New York, N.Y.
(b) Whether it is authorized to exercise corporate
trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with
the Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture
Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. - A copy of the Organization Certificate of The
Bank of New York (formerly Irving Trust
Company) as now in effect, which contains the
authority to commence business and a grant of
powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-
6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and
Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the
Trustee. (Exhibit 4 to Form T-1 filed with
Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by
Section 321(b) of the Act. (Exhibit 6 to
Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of
the Trustee published pursuant to law or to
the requirements of its supervising or
examining authority.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a
responsive answer to Item 2, the answer to said Item is based on
incomplete information.
Item 2 may, however, be considered as correct unless
amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee,
The Bank of New York, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of October, 1996.
THE BANK OF NEW YORK
By: /s/ ROBERT E. PATTERSON III
-----------------------------
Robert E. Patterson III
Assistant Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the
Federal Reserve System, at the close of business June 30, 1996,
published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal
Reserve Act.
Dollar Amounts
in Thousands
---------------
ASSETS
------
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin . . . . . . $ 3,650,068
Interest-bearing balances . . . 738,260
Securities:
Held-to-maturity securities . . 784,969
Available-for-sale securities . 2,033,407
Federal funds sold and securities
purchased under agreements to
resell in domestic offices of
the bank:
Federal funds sold . . . . . . 3,699,232
Securities purchased under
agreements to resell . . . . . 20,000
Loans and lease financing
receivables:
Loans and leases, net of
unearned income . . . . . . . . 28,109,045
LESS: Allowance for loan and
lease losses . . . . . . . . 586,658
LESS: Allocated transfer risk
reserve . . . . . . . . . . . 429
Loans and leases, net of
unearned income, allowance,
and reserve . . . . . . . . . 27,521,958
Assets held in trading accounts . 678,844
Premises and fixed assets
(including capitalized leases) 608,217
Other real estate owned . . . . . 50,599
Investments in unconsolidated
subsidiaries and associated
companies . . . . . . . . . . . 235,670
Customers' liability to this bank
on acceptances outstanding . . 904,948
Intangible assets . . . . . . . . 450,230
Other assets . . . . . . . . . . 1,299,464
-----------
Total assets . . . . . . . . . . $42,675,866
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . $19,223,050
Noninterest-bearing . . . . . . 7,675,758
Interest-bearing . . . . . . . 11,547,292
In foreign offices, Edge and
Agreement subsidiaries, and
IBFs . . . . . . . . . . . . 11,527,685
Noninterest-bearing . . . . . . 48,502
Interest-bearing . . . . . . . 11,479,183
Federal funds purchased and
securities sold under agreements
to repurchase in domestic
offices of the bank and of its
Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased . . . . 1,498,351
Securities sold under agreements
to repurchase . . . . . . . . 126,974
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . 231,865
Trading liabilities . . . . . . . 479,390
Other borrowed money:
With original maturity of one
year or less . . . . . . . . 2,521,578
With original maturity of more
than one year . . . . . . . . 20,780
Bank's liability on acceptances
executed and outstanding . . . 905,850
Subordinated notes and debentures 1,020,400
Other liabilities . . . . . . . . 1,543,657
-----------
Total liabilities . . . . . . . . 39,099,580
-----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . 942,284
Surplus . . . . . . . . . . . . . 525,666
Undivided profits and capital
reserves . . . . . . . . . . . 2,124,231
Net unrealized holding gains
(losses) on available-for-sale
securities . . . . . . . . . . ( 8,063)
Cumulative foreign currency
translation adjustments . . . . ( 7,832)
Total equity capital . . . . . . 3,576,286
-----------
Total liabilities and equity $42,675,866
capital . . . . . . . . . . . . ===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
J. Carter Bacot )
Alan R. Griffith ) Directors
Thomas A. Renyi )
Exhibit-25(b)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
THE MONTANA POWER COMPANY
(Exact name of obligor as specified in its charter)
Montana 81-0170530
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
40 East Broadway
Butte, Montana 59701-9394
(Address of principal executive offices) (Zip code)
_________________
THE MONTANA POWER COMPANY JUNIOR SUBORDINATED DEBENTURES,
[ ]% SERIES [ ]*
(Title of the indenture securities)
-----------------
*Specific title(s) to be determined in connection with
sale(s) of Junior Subordinated Debentures, [ ]%
Series [ ].
<PAGE>
ITEM 1. GENERAL INFORMATION.*
-----------------
*Pursuant to General Instruction B, the Trustee has
responded only to Items 1, 2 and 16 of this form since to the
best of the knowledge of the Trustee the obligor is not in
default under any indenture under which the Trustee is a trustee.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Superintendent of Banks of the 2 Rector Street, New York,
State of New York N.Y. 10006 and Albany, N.Y.
Federal Reserve Bank of New York 12203
Federal Deposit Insurance 33 Liberty Plaza, New York,
Corporation N.Y. 10045
New York Clearing House 550 17th Street, N.W.,
Washington, D.C. 20429
New York, N.Y.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with
the Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture
Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. - A copy of the Organization Certificate of The
Bank of New York (formerly Irving Trust
Company) as now in effect, which contains the
authority to commence business and a grant of
powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-
6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and
Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the
Trustee. (Exhibit 4 to Form T-1 filed with
Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by
Section 321(b) of the Act. (Exhibit 6 to
Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of
the Trustee published pursuant to law or to
the requirements of its supervising or
examining authority.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a
responsive answer to Item 2, the answer to said Item is based on
incomplete information.
Item 2 may, however, be considered as correct unless
amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee,
The Bank of New York, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of October, 1996.
THE BANK OF NEW YORK
By:/s/ ROBERT E. PATTERSON III
----------------------------
Robert E. Patterson III
Assistant Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the
Federal Reserve System, at the close of business June 30, 1996,
published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal
Reserve Act.
Dollar Amounts
in Thousands
---------------
ASSETS
------
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin . . . . . . $ 3,650,068
Interest-bearing balances . . . 738,260
Securities:
Held-to-maturity securities . . 784,969
Available-for-sale securities . 2,033,407
Federal funds sold and securities
purchased under agreements to
resell in domestic offices of
the bank:
Federal funds sold . . . . . . 3,699,232
Securities purchased under
agreements to resell . . . . . 20,000
Loans and lease financing
receivables:
Loans and leases, net of
unearned income . . . . . . . . 28,109,045
LESS: Allowance for loan and
lease losses . . . . . . . . 586,658
LESS: Allocated transfer risk
reserve . . . . . . . . . . . 429
Loans and leases, net of
unearned income, allowance,
and reserve . . . . . . . . . 27,521,958
Assets held in trading accounts . 678,844
Premises and fixed assets
(including capitalized leases) 608,217
Other real estate owned . . . . . 50,599
Investments in unconsolidated
subsidiaries and associated
companies . . . . . . . . . . . 235,670
Customers' liability to this bank
on acceptances outstanding . . 904,948
Intangible assets . . . . . . . . 450,230
Other assets . . . . . . . . . . 1,299,464
-----------
Total assets . . . . . . . . . . $42,675,866
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . $19,223,050
Noninterest-bearing . . . . . . 7,675,758
Interest-bearing . . . . . . . 11,547,292
In foreign offices, Edge and
Agreement subsidiaries, and
IBFs . . . . . . . . . . . . 11,527,685
Noninterest-bearing . . . . . . 48,502
Interest-bearing . . . . . . . 11,479,183
Federal funds purchased and
securities sold under agreements
to repurchase in domestic
offices of the bank and of its
Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased . . . . 1,498,351
Securities sold under agreements
to repurchase . . . . . . . . 126,974
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . 231,865
Trading liabilities . . . . . . . 479,390
Other borrowed money:
With original maturity of one
year or less . . . . . . . . 2,521,578
With original maturity of more
than one year . . . . . . . . 20,780
Bank's liability on acceptances
executed and outstanding . . . 905,850
Subordinated notes and debentures 1,020,400
Other liabilities . . . . . . . . 1,543,657
-----------
Total liabilities . . . . . . . . 39,099,580
-----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . 942,284
Surplus . . . . . . . . . . . . . 525,666
Undivided profits and capital
reserves . . . . . . . . . . . 2,124,231
Net unrealized holding gains
(losses) on available-for-sale
securities . . . . . . . . . . ( 8,063)
Cumulative foreign currency
translation adjustments . . . . ( 7,832)
Total equity capital . . . . . . 3,576,286
-----------
Total liabilities and equity $42,675,866
capital . . . . . . . . . . . . ===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
J. Carter Bacot )
Alan R. Griffith ) Directors
Thomas A. Renyi )
Exhibit 25(c)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2) ____________
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
48 Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
_________________
THE MONTANA POWER COMPANY
(Exact name of obligor as specified in its charter)
Montana 81-0170530
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
40 East Broadway
Butte, Montana 59701-9394
(Address of principal executive offices) (Zip code)
_________________
THE MONTANA POWER COMPANY GUARANTEE WITH RESPECT TO
MONTANA POWER CAPITAL I [ ]% CUMULATIVE QUARTERLY INCOME
PREFERRED SECURITIES, SERIES A*
(Title of the indenture securities)
_________________
*Specific title to be determined in connection with sale of
Montana Power Capital I [ ]% Cumulative Quarterly Income
Preferred Securities, Series A.
<PAGE>
ITEM 1. GENERAL INFORMATION.*
*Pursuant to General Instruction B, the Trustee has
responded only to Items 1, 2 and 16 of this form since to the
best of the knowledge of the Trustee the obligor is not in
default under any indenture under which the Trustee is a trustee.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Superintendent of Banks of the 2 Rector Street, New York,
State of New York N.Y. 10006 and Albany, N.Y.
Federal Reserve Bank of New York 12203
Federal Deposit Insurance 33 Liberty Plaza, New York,
Corporation N.Y. 10045
New York Clearing House 550 17th Street, N.W.,
Washington, D.C. 20429
New York, N.Y.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with
the Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture
Act of 1939 (the "Act") and Rule 24 of the Commission's Rules of
Practice.
1. - A copy of the Organization Certificate of The
Bank of New York (formerly Irving Trust
Company) as now in effect, which contains the
authority to commence business and a grant of
powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-
6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and
Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. - A copy of the existing By-laws of the
Trustee. (Exhibit 4 to Form T-1 filed with
Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by
Section 321(b) of the Act. (Exhibit 6 to
Form T-1 filed with Registration Statement
No. 33-44051.)
7. - A copy of the latest report of condition of
the Trustee published pursuant to law or to
the requirements of its supervising or
examining authority.
<PAGE>
NOTE
Inasmuch as this Form T-1 is being filed prior to the
ascertainment by the Trustee of all facts on which to base a
responsive answer to Item 2, the answer to said Item is based on
incomplete information.
Item 2 may, however, be considered as correct unless
amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee,
The Bank of New York, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of October, 1996.
THE BANK OF NEW YORK
By: /s/ ROBERT E. PATTERSON III
---------------------------
Robert E. Patterson III
Assistant Vice President
<PAGE>
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the
Federal Reserve System, at the close of business June 30, 1996,
published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal
Reserve Act.
Dollar Amounts
in Thousands
---------------
ASSETS
------
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin . . . . . . $ 3,650,068
Interest-bearing balances . . . 738,260
Securities:
Held-to-maturity securities . . 784,969
Available-for-sale securities . 2,033,407
Federal funds sold and securities
purchased under agreements to
resell in domestic offices of
the bank:
Federal funds sold . . . . . . 3,699,232
Securities purchased under
agreements to resell . . . . . 20,000
Loans and lease financing
receivables:
Loans and leases, net of
unearned income . . . . . . . . 28,109,045
LESS: Allowance for loan and
lease losses . . . . . . . . 586,658
LESS: Allocated transfer risk
reserve . . . . . . . . . . . 429
Loans and leases, net of
unearned income, allowance,
and reserve . . . . . . . . . 27,521,958
Assets held in trading accounts . 678,844
Premises and fixed assets
(including capitalized leases) 608,217
Other real estate owned . . . . . 50,599
Investments in unconsolidated
subsidiaries and associated
companies . . . . . . . . . . . 235,670
Customers' liability to this bank
on acceptances outstanding . . 904,948
Intangible assets . . . . . . . . 450,230
Other assets . . . . . . . . . . 1,299,464
-----------
Total assets . . . . . . . . . . $42,675,866
===========
<PAGE>
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
-----------
Deposits:
In domestic offices . . . . . . $19,223,050
Noninterest-bearing . . . . . . 7,675,758
Interest-bearing . . . . . . . 11,547,292
In foreign offices, Edge and
Agreement subsidiaries, and
IBFs . . . . . . . . . . . . 11,527,685
Noninterest-bearing . . . . . . 48,502
Interest-bearing . . . . . . . 11,479,183
Federal funds purchased and
securities sold under agreements
to repurchase in domestic
offices of the bank and of its
Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased . . . . 1,498,351
Securities sold under agreements
to repurchase . . . . . . . . 126,974
Demand notes issued to the U.S.
Treasury . . . . . . . . . . . 231,865
Trading liabilities . . . . . . . 479,390
Other borrowed money:
With original maturity of one
year or less . . . . . . . . 2,521,578
With original maturity of more
than one year . . . . . . . . 20,780
Bank's liability on acceptances
executed and outstanding . . . 905,850
Subordinated notes and debentures 1,020,400
Other liabilities . . . . . . . . 1,543,657
-----------
Total liabilities . . . . . . . . 39,099,580
-----------
EQUITY CAPITAL
--------------
Common stock . . . . . . . . . . 942,284
Surplus . . . . . . . . . . . . . 525,666
Undivided profits and capital
reserves . . . . . . . . . . . 2,124,231
Net unrealized holding gains
(losses) on available-for-sale
securities . . . . . . . . . . ( 8,063)
Cumulative foreign currency
translation adjustments . . . . ( 7,832)
Total equity capital . . . . . . 3,576,286
-----------
Total liabilities and equity $42,675,866
capital . . . . . . . . . . . . ===========
<PAGE>
EXHIBIT 7
(Page 3 of 3)
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
J. Carter Bacot )
Alan R. Griffith ) Directors
Thomas A. Renyi )
