<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 28, 1995
REGISTRATION NO. 33-60423
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933, AS AMENDED
<TABLE>
<S> <C> <C>
NORTHWESTERN PUBLIC DELAWARE 46-0172280
SERVICE COMPANY
NWPS CAPITAL FINANCING I DELAWARE TO BE APPLIED FOR
NWPS CAPITAL FINANCING II DELAWARE TO BE APPLIED FOR
NWPS CAPITAL FINANCING III DELAWARE TO BE APPLIED FOR
(Exact name of registrant as (State or other (I.R.S. Employer
specified in its charter) jurisdiction of Identification No.)
incorporation or
organization)
</TABLE>
33 THIRD STREET S.E.
HURON, SOUTH DAKOTA 57350-1318
605-352-8411
(Address, including zip code, and telephone number,
including area code, of each registrant's principal executive offices)
MERLE D. LEWIS, PRESIDENT AND CHIEF EXECUTIVE OFFICER
33 THIRD STREET S.E.
HURON, SOUTH DAKOTA 57350-1318
605-352-8411
(Name, address, including zip code, and telephone
number including area code, of agent for service)
------------------------
WITH COPIES TO:
<TABLE>
<S> <C>
JAMES M. VAN VLIET, JR. DAVID P. FALCK
SCHIFF HARDIN & WAITE WINTHROP, STIMSON,
7200 SEARS TOWER PUTNAM & ROBERTS
CHICAGO, ILLINOIS 60606 ONE BATTERY PARK PLAZA
NEW YORK, NEW YORK 10004
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AND FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THE REGISTRATION
STATEMENT AS DETERMINED BY MARKET CONDITIONS.
------------------------
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, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/
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. / /
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
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 PRELIMINARY PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PRELIMINARY 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>
PROSPECTUS SUPPLEMENT (SUBJECT TO COMPLETION, ISSUED JULY 28, 1995)
(TO PROSPECTUS DATED , 1995)
$60,000,000
NORTHWESTERN PUBLIC SERVICE COMPANY
% MORTGAGE BONDS DUE , 2005
-----------------
INTEREST PAYABLE AND
-------------------
THE MORTGAGE BONDS OFFERED HEREBY (THE "OFFERED BONDS") WILL MATURE ON
, 2005. THE OFFERED BONDS WILL NOT BE REDEEMABLE PRIOR TO
MATURITY. THEREAFTER, THE OFFERED BONDS MAY BE REDEEMED AT THE OPTION OF
THE COMPANY AT THE REDEMPTION PRICES SET FORTH HEREIN. THE OFFERED
BONDS WILL BE ISSUED IN THE FORM OF FULLY-REGISTERED BOOK-ENTRY
OFFERED BONDS WHICH WILL BE DEPOSITED WITH, AND REGISTERED
IN THE NAME OF A NOMINEE OF, THE DEPOSITORY TRUST
COMPANY. SEE "CERTAIN TERMS OF THE OFFERED BONDS"
HEREIN.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------
PRICE % AND ACCRUED INTEREST, IF ANY
-------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS
PUBLIC (1) COMMISSIONS (2) TO COMPANY (1)(3)
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
PER OFFERED BOND.......................... % % %
TOTAL..................................... $ $ $
<FN>
- ---------
(1) PLUS ACCRUED INTEREST, IF ANY, FROM , 1995.
(2) THE COMPANY HAS AGREED TO INDEMNIFY THE UNDERWRITERS AGAINST CERTAIN
LIABILITIES, INCLUDING LIABILITIES UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.
(3) BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY, ESTIMATED AT
$700,000.
</TABLE>
-------------------
THE OFFERED BONDS ARE OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS AND IF
ACCEPTED BY THE UNDERWRITERS AND SUBJECT TO APPROVAL OF CERTAIN LEGAL MATTERS BY
WINTHROP, STIMSON, PUTNAM & ROBERTS, COUNSEL FOR THE UNDERWRITERS. IT IS
EXPECTED THAT DELIVERY OF THE OFFERED BONDS WILL BE MADE ON OR ABOUT AUGUST ,
1995 THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY TRUST COMPANY AGAINST
PAYMENT THEREFOR IN IMMEDIATELY AVAILABLE FUNDS.
-------------------
MORGAN STANLEY & CO. NATWEST CAPITAL MARKETS LIMITED
INCORPORATED
AUGUST , 1995
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, IN
CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
DO NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANY PERSON IN ANY JURISDICTION
IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFER OR SOLICITATION.
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AT
ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF THE PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary.............................................................................. S-3
The Company................................................................................................ S-3
Summary Financial Information.............................................................................. S-5
Use of Proceeds............................................................................................ S-6
Certain Terms of the Offered Bonds......................................................................... S-6
Underwriting............................................................................................... S-8
PROSPECTUS
Available Information...................................................................................... 1
Documents Incorporated by Reference........................................................................ 1
The Company................................................................................................ 2
Pending Acquisition of Synergy Group Incorporated.......................................................... 5
Northwestern Public Service Company and Synergy Group Incorporated Pro Forma Financial Information......... 10
The NWPS Trusts............................................................................................ 19
Use of Proceeds............................................................................................ 20
Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Dividends.......... 20
Description of the Mortgage Bonds.......................................................................... 20
Description of the Subordinated Debt Securities............................................................ 32
Description of the Preferred Securities.................................................................... 40
Description of the Guarantees.............................................................................. 41
Description of the Common Stock............................................................................ 43
Legal Opinions............................................................................................. 45
Experts.................................................................................................... 46
Plan of Distribution....................................................................................... 46
</TABLE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED BONDS
AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE
CONSIDERED IN CONJUNCTION WITH, THE INFORMATION AND FINANCIAL STATEMENTS
APPEARING ELSEWHERE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS AND THE DOCUMENTS INCORPORATED THEREIN BY REFERENCE.
THE COMPANY
The principal business of Northwestern Public Service Company (the
"Company") is energy distribution. The Company is engaged in providing regulated
electric and natural gas service in South Dakota and natural gas service in
Nebraska. The Company serves approximately 54,900 electric customers and 75,000
gas customers representing a diverse mix of residential, commercial and
industrial customers. In addition, the Company has investments in nonutility
businesses and has recently contracted to acquire Synergy Group Incorporated
("Synergy"), a major propane distribution company. See "The Company" and
"Pending Acquisition of Synergy Group Incorporated" in the accompanying
Prospectus.
The Company's electric business generates, transmits and distributes
electricity to over 100 communities in eastern South Dakota. In 1994, 46% of the
Company's total operating revenues were from the sale of electric energy. At
December 31, 1994, the aggregate capacity of all Company-owned electric
generating units was 309,000 kilowatts ("kw"), consisting of 202,000 kw from
jointly-owned baseload plants and 107,000 kw from internal combustion turbine
and diesel units used primarily for peaking purposes. All of the Company's
baseload plants are fueled by coal. The Company has maintained competitive
electric rates when compared to neighboring utilities and has a competitive
electric baseload generating production cost, which includes fuel and plant
operating expenses, of less than 1.5 CENTS per kilowatt hour.
The Company's natural gas business purchases, transports and distributes
natural gas to over 50 communities in eastern South Dakota and 4 communities in
central Nebraska. In 1994, 40% of the Company's total operating revenues were
from the sale of natural gas. The Company purchases gas supply from more than 20
domestic and Canadian suppliers and transports natural gas supply through five
pipelines. Gas agreements provide for firm deliverable pipeline capacity of
approximately 98,900 million british thermal units ("MMBTU"), per day. To
supplement firm gas supplies, the Company owns six propane-air plants and has
contracts for underground natural gas storage services. Over the last five years
the Company has expanded its gas distribution operations to serve 29 new
communities in South Dakota.
The Company's business strategy is summarized by three primary objectives:
- To enhance the Company's competitive position in its energy distribution
businesses;
- To expand energy sales and markets with value-added services for
customers; and
- To provide earnings and dividend growth and increased shareholder value
through its energy distribution businesses and investment and acquisition
activities.
By enhancing the competitive position of its core electric and gas distribution
businesses and expanding its energy sales and markets, the Company believes it
will position itself to be successful in the increasingly competitive electric
and gas distribution businesses anticipated over the next several years. To
supplement growth strategies in its electric and natural gas businesses, the
Company also plans to seek new investment and acquisition opportunities that
have demonstrable growth potential. The primary focus of these investment and
acquisition activities is targeted in energy distribution businesses. The
Company also plans to pursue opportunities in non-energy businesses that
complement its existing operations and provide the capability to enhance
shareholder value.
In May 1995, the Company contracted to acquire Synergy, a retail propane
distributor serving over 200,000 customers from 152 locations in 23 states in
the eastern and south central regions of the U.S. See "Pending Acquisition of
Synergy Group Incorporated" in the accompanying Prospectus. In
S-3
<PAGE>
accordance with its strategic plan, the Company believes that the Synergy
propane distribution operations are complementary to the Company's electric and
natural gas businesses. Propane is the nation's fourth largest energy source
after electricity, natural gas and fuel oil. The acquisition price to be paid
for Synergy is $137.5 million cash (subject to certain adjustments) and certain
securities of the Company's acquisition subsidiary. The Company has entered into
an agreement with a third party for the sale of certain Synergy properties which
will reduce the cash portion of the acquisition price to approximately $100
million. The Company has executed a management agreement with Empire Gas
Corporation ("Empire Gas") for the joint management of the properties after the
acquisition. Empire Gas is the nation's eleventh largest retail propane
distributor. Subsequent to the acquisition and expected third party sale, the
Company's total assets will consist of approximately 65% electric and gas
distribution, 25% propane distribution and 10% marketable securities and other
diversified investments.
The Company's principal executive offices are located at 33 Third Street
S.E., Huron, South Dakota 57350. The Company's telephone number is (605)
352-8411.
S-4
<PAGE>
SUMMARY FINANCIAL INFORMATION
(in thousands, except percentages and per share amounts)
The financial information presented below should be read in conjunction with
the Company's historical financial statements and the notes thereto which are
incorporated by reference herein and the pro forma financial statements and the
notes thereto included in the accompanying Prospectus. The pro forma financial
information contained in the right column, reflecting the pending acquisition of
Synergy and related matters, was prepared solely to comply with Regulation S-X
of the Securities and Exchange Commission. The pro forma financial information
is based on the assumptions and adjustments set forth under "Northwestern Public
Service Company and Synergy Group Incorporated Pro Forma Financial Information"
in the accompanying Prospectus.
<TABLE>
<CAPTION>
PRO FORMA(1)
------------------------
THREE THREE
MONTHS YEAR MONTHS
YEAR ENDED DECEMBER 31, ENDED ENDED ENDED
---------------------------- MARCH 31, DECEMBER 31, MARCH 31,
1992 1993 1994 1995 1994 1995(2)
-------- -------- -------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues............................................. $119,197 $153,257 $157,266 $50,754 $256,634 $82,612
Operating income..................................... 24,809 27,246 30,368 12,882 37,985 20,088
Net income........................................... 13,721 15,191 15,440 7,103 17,463 13,840
Net income available for common stock................ 13,578 15,070 15,320 7,073 15,300 13,299
Earnings per share................................... 1.77 1.96 2.00 0.92 1.74 1.51
Dividends paid per common share...................... 1.59 1.63 1.67 0.425 1.67 0.425
Weighted average shares outstanding.................. 7,677 7,677 7,677 7,677 8,805 8,805
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, 1995
-------------------------------------
ACTUAL PRO FORMA
-------- ---------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Assets................................................................... $363,432 $ 487,435
-------- ---------
-------- ---------
Capitalization Summary
Long-term debt
(including current maturities)........................................ $129,888 51.6% $ 181,592 50.7%
Company-Obligated Mandatorily Redeemable Preferred Securities of
Subsidiary Trust (3).................................................. -- -- 24,212 6.8
Cumulative preferred stock (including portion to be redeemed within one
year)................................................................. 2,640 1.1 2,640 0.7
Common Stock Equity
Common stock........................................................... 26,870 -- 31,179 --
Additional paid-in capital............................................. 29,923 -- 56,398 --
Retained earnings...................................................... 59,183 -- 59,183 --
Unrealized gain on investments, net.................................... 3,181 -- 3,181 --
-------- ---------
$119,157 47.3 $ 149,941 41.8
-------- ------ --------- ------
Total................................................................ $251,685 100.0% $ 358,385 100.0%
-------- ------ --------- ------
-------- ------ --------- ------
<FN>
- ----------
(1) The pro forma financial information does not purport to present the
financial position or results of operations of the Company had the
acquisition of Synergy actually been completed as of the dates indicated.
In addition, the pro forma financial information is not necessarily
indicative of future results of operations.
(2) The results of operations of Synergy for the three months ended March 31,
1995 are not indicative of a full year's results of operations.
(3) As described in the accompanying Prospectus, all of the assets of NWPS
Capital, the subsidiary trust, will be approximately $31 million of
Subordinated Debt Securities of the Company which will bear interest at a
rate of % per annum, assuming the issuance of 1.2 million Preferred
Securities. Pro Forma amounts shown in the table reflect the portion of the
estimated net proceeds of the offering of Preferred Securities to be used
to fund the acquisition of Synergy.
</TABLE>
S-5
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of approximately $50 million of the Offered
Bonds will be applied to fund the acquisition of Synergy, including certain
transaction expenses. The additional net proceeds from the sale of the Offered
Bonds will be applied to repay short term debt of the Company. See "Use of
Proceeds" in the accompanying Prospectus.
CERTAIN TERMS OF THE OFFERED BONDS
GENERAL. The Offered Bonds are being issued under the Company's General
Mortgage Indenture and Deed of Trust dated as of August 1, 1993 (the "New
Mortgage") between the Company and The Chase Manhattan Bank (National
Association), as trustee (the "New Mortgage Trustee"), as supplemented by
various supplemental indentures, including the Supplemental Indenture dated as
of , 1995 relating to the Offered Bonds (the "Supplemental
Indenture"). The Offered Bonds will be issued on the basis of a First Mortgage
Bond in the principal amount of $ (the "Pledged Bond") issued to the New
Mortgage Trustee under the Company's Indenture dated August 1, 1940 (the "First
Mortgage") between the Company and The Chase Manhattan Bank (National
Association) and C. J. Heinzelmann, as successor Trustees, as supplemented by
various supplemental indentures, including the supplemental indenture dated as
of , 1995 relating to the Pledged Bond, and on the basis of property
additions. The Offered Bonds will be secured, in part, by the First Mortgage
Bonds (including the Pledged Bond) held by the New Mortgage Trustee. The First
Mortgage constitutes, subject to certain exceptions, a first lien on
substantially all properties of the Company. The Offered Bonds will also be
secured by the lien of the New Mortgage on the Company's properties used in the
generation, production, transmission or distribution of electricity or the
distribution of gas in any form and for any purpose in the States of South
Dakota or Nebraska, which lien is junior to the lien of the First Mortgage. See
"Description of the Mortgage Bonds" in the accompanying Prospectus.
The following summaries of certain provisions of the New Mortgage, the
Supplemental Indenture and the Offered Bonds (referred to in the Prospectus as
"Mortgage Bonds") hereby supplement, and to the extent inconsistent therewith
replace, the description of the general terms and provisions of the Mortgage
Bonds set forth under "Description of the Mortgage Bonds" in the Prospectus, to
which description reference is hereby made. The following summaries do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, the provisions of the New Mortgage and the Supplemental
Indenture. The following makes use of defined terms in the New Mortgage and the
Supplemental Indenture.
BOOK-ENTRY SYSTEM. The Offered Bonds will be issued in the form of
fully-registered book-entry Offered Bonds which will be deposited with, or on
behalf of, The Depository Trust Company (the "Depositary") and registered in the
name of the Depositary's nominee (each, a "Book-Entry Security"). Except as set
forth below, a Book-Entry Security may not be transferred except as a whole by
the Depositary or by a nominee of the Depositary to the Depositary, by a nominee
of the Depositary to another nominee of the Depositary or by the Depositary or
any such nominee to a successor of the Depositary or a nominee of such
successor.
The Depositary has advised the Company and the Underwriters that it is a
limited-purpose trust company organized under the laws of the State of New York,
a "banking organization" within the meaning of the New York banking law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions among the participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations and certain
S-6
<PAGE>
other organizations, some of whom (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. Persons who are not participants may beneficially own securities
held by the Depositary only through participants. The rules applicable to the
Depositary are on file with the Securities and Exchange Commission.
Upon the issuance by the Company of the Book-Entry Securities, the
Depositary will credit, on its book-entry registration and transfer system, the
principal amount of the Offered Bonds represented by such Book-Entry Securities
to the accounts of participants. The accounts to be credited shall be designated
by the applicable Underwriter. Ownership of beneficial interests in a Book-Entry
Security will be limited to participants or persons that may hold interests
through participants. Beneficial interests in a Book-Entry Security will be
shown on, and the transfer thereof will be effected only through, records
maintained by the Depositary (with respect to beneficial interests of
participants) or by participants, or persons that may hold interests through
participants (with respect to beneficial interests to beneficial owners). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in certificated form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Book-Entry Security.
For a Book-Entry Security, so long as the Depositary or its nominee is the
registered owner of a Book-Entry Security, the Depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the Offered Bonds
represented by such Book-Entry Security for all purposes under the New Mortgage.
Except as provided below, owners of beneficial interests in a Book-Entry
Security will not be entitled to have Offered Bonds represented by such
Book-Entry Security registered in their names, will not receive or be entitled
to receive physical delivery of such Offered Bonds in certificated form and will
not be considered the owners or holders thereof under the New Mortgage.
Principal and interest payments on Offered Bonds issued in book-entry form
and represented by the Book-Entry Securities will be made by the Company to the
Depositary or its nominee, as the case may be, as the registered owner of the
related Book-Entry Securities. The Company will not have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Book-Entry Securities, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests. The Company expects that the Depositary, upon receipt of
any payment of principal or interest in respect of any Book-Entry Securities,
will credit immediately the accounts of the related participants with payment in
amounts proportionate to their respective beneficial interest in the principal
amount of such Book-Entry Securities as shown on the records of the Depositary.
The Company also expects the payments by participants to owners of beneficial
interests in the Book-Entry Securities will be governed by standing customer
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such participants.
If the Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Offered Bonds in certificated form in exchange for
each Book-Entry Security. In addition, the Company may at any time determine not
to have Offered Bonds represented by the Book-Entry Securities. In any such
instance, owners of beneficial interests in such Book-Entry Securities will be
entitled to physical delivery of Offered Bonds in certificated form equal in
principal amount to such beneficial interests and to have such Offered Bonds
registered in its name. Offered Bonds so issued in certificated form will be
issued in denominations of $1,000 or any larger amount that is an integral
multiple thereof and will be issued in registered form only, without coupons.
SAME-DAY PAYMENT AND SETTLEMENT. All payments of principal of and interest
on the Offered Bonds will be made by the Company in same-day funds.
S-7
<PAGE>
SECURITY. The Offered Bonds will be issued on the basis of the Pledged Bond
and on the basis of property additions. The Pledged Bond will be issued and
delivered to, and registered in the name of, the New Mortgage Trustee or its
nominee and will be owned and held by the New Mortgage Trustee, subject to the
provisions of the New Mortgage, for the benefit of the Holders (as defined in
the accompanying Prospectus) of the Offered Bonds and all other outstanding
Mortgage Bonds issued under the New Mortgage, and the Company will have no
interest in the Pledged Bond. The Pledged Bond will be issued in the principal
amount of and, as is the case with the Offered Bonds, will mature on
, will bear interest at the rate of % per annum, and will
be payable semi-annually on and , beginning
. Any payment by the Company of principal of, or interest on,
the Pledged Bond shall be applied by the New Mortgage Trustee to the payment of
any principal, or interest, as the case may be, in respect of the Offered Bonds
which is then due and, to the extent of such application, the obligation of the
Company under the New Mortgage to make such payment in respect of the Offered
Bonds will be deemed satisfied and discharged. Any payment by the Company under
the New Mortgage of principal of, or interest on, the Offered Bonds will, to the
extent thereof, be deemed to satisfy and discharge the obligation of the Company
to make a corresponding payment of principal, or interest, as the case may be,
in respect of the Pledged Bond which is then due.
UNDERWRITING
Under the terms and subject to the conditions contained in the Underwriting
Agreement dated the date hereof, the Underwriters named below have severally
agreed to purchase, and the Company has agreed to sell to the Underwriters,
severally, the following respective principal amounts of the Offered Bonds:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF THE
UNDERWRITERS OFFERED BONDS
- -------------------------------------------------------------------------------- --------------
<S> <C>
Morgan Stanley & Co. Incorporated............................................... $
NatWest Capital Markets Limited.................................................
Total.......................................................................
--------------
--------------
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Offered Bonds are subject to
approval of certain legal matters by counsel and to certain other conditions.
The Underwriters are committed to pay for and accept delivery of all of the
Offered Bonds if any are taken; provided that under certain circumstances
involving a default of Underwriters, less than all of the Offered Bonds may be
purchased.
The Underwriters initially propose to offer part of the Offered Bonds
directly to the public at the public offering price set forth on the cover page
of this Prospectus Supplement and part to certain dealers at a price which
represents a concession not in excess of % of the principal amount of the
Offered Bonds. The Underwriters may allow and such dealers may reallow a
concession of % of the principal amount of the Offered Bonds to certain other
dealers. After the initial public offering, the public offering price and the
other selling items may be changed.
Each series of Offered Bonds will be a new issue of securities and will have
no established trading market. Any Underwriter to whom Offered Bonds of any
series are sold for public offering and sale may make a market in such series of
Offered Bonds, but such Underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of, or trading market for, any Offered Bonds.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Underwriters engage in (or in the future may engage in) transactions
with, and perform services for, the Company or its affiliates in the ordinary
course of business. Morgan Stanley & Co.
S-8
<PAGE>
Incorporated represents Synergy in connection with the pending acquisition of
Synergy by the Company described under "Pending Acquisition of Synergy Group
Incorporated" in the accompanying Prospectus. National Westminster Bank P l c.
is the parent of NatWest Capital Markets Limited and is serving as the managing
agent for the short-term loan for the Synergy acquisition.
NatWest Capital Markets Limited ("NatWest"), a United Kingdom broker-dealer
and a member of the Securities Futures Authority Limited, has agreed that, as
part of the distribution of the Offered Bonds and subject to certain exceptions,
it will not offer or sell any Offered Bonds within the United States, its
territories or possessions or to persons who are citizens thereof or residents
therein. The Underwriting Agreement does not limit sale of the Offered Bonds
offered hereby outside the United States.
NatWest has further represented and agreed that (i) it has not offered or
sold and will not offer or sell prior to the date six months after their date of
issue any Offered Bonds to persons in the United Kingdom, except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, (ii) it has complied with and will
comply with all applicable provisions of the Financial Services Act 1986 with
respect to anything done by it in relation to the Offered Bonds in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on and will only issued or pass on in the United Kingdom any document received
by it in connection with the issue of the Offered Bonds to a person who is of
the kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995 or is a person to whom such
document may otherwise lawfully be issued or passed on.
S-9
<PAGE>
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 PRELIMINARY PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PRELIMINARY 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>
PROSPECTUS SUPPLEMENT (SUBJECT TO COMPLETION, ISSUED JULY 28, 1995)
(TO PROSPECTUS DATED , 1995)
1,200,000 SHARES
NORTHWESTERN PUBLIC SERVICE COMPANY
COMMON STOCK, $3.50 PAR VALUE
------------
ALL OF THE SHARES OF COMMON STOCK OFFERED HEREBY ARE BEING SOLD BY THE COMPANY.
THE COMPANY'S COMMON STOCK IS LISTED ON THE NEW YORK STOCK EXCHANGE. ON
JULY 27, 1995, THE LAST REPORTED SALE PRICE OF THE COMMON STOCK
ON THE NEW YORK STOCK EXCHANGE WAS $26
PER SHARE.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OF ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------
PRICE $ A SHARE
-------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS
PUBLIC COMMISSIONS (1) TO COMPANY (2)
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
PER SHARE.................................
TOTAL (3)................................. $ $ $
<FN>
- ---------
(1) THE COMPANY HAS AGREED TO INDEMNIFY THE UNDERWRITERS AGAINST CERTAIN
LIABILITIES, INCLUDING LIABILITIES UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.
(2) BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY, ESTIMATED AT
$700,000.
(3) THE COMPANY HAS GRANTED TO THE UNDERWRITERS AN OPTION, EXERCISABLE
WITHIN 30 DAYS OF THE DATE HEREOF, TO PURCHASE UP TO AN AGGREGATE OF
180,000 ADDITIONAL SHARES OF COMMON STOCK AT THE PRICE TO PUBLIC
LESS UNDERWRITING DISCOUNTS AND COMMISSIONS FOR THE PURPOSE OF
COVERING OVER-ALLOTMENTS, IF ANY. IF THE UNDERWRITERS EXERCISE SUCH
OPTION IN FULL, THE TOTAL PRICE TO PUBLIC, UNDERWRITING DISCOUNTS
AND COMMISSIONS AND PROCEEDS TO COMPANY WILL BE $ , $
AND $ , RESPECTIVELY. SEE "UNDERWRITING."
</TABLE>
-------------------
THE COMMON STOCK IS OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS AND IF ACCEPTED
BY THE UNDERWRITERS AND SUBJECT TO APPROVAL OF CERTAIN LEGAL MATTERS BY
WINTHROP, STIMSON, PUTNAM & ROBERTS, COUNSEL FOR THE UNDERWRITERS. IT IS
EXPECTED THAT DELIVERY OF THE COMMON STOCK WILL BE MADE ON OR ABOUT AUGUST ,
1995 AT THE OFFICE OF MORGAN STANLEY & CO. INCORPORATED, NEW YORK, N.Y., AGAINST
PAYMENT THEREFOR IN NEW YORK FUNDS.
-------------------
MORGAN STANLEY & CO. PAINEWEBBER INCORPORATED
INCORPORATED
AUGUST , 1995
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
DO NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANY PERSON IN ANY JURISDICTION
IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFER OR SOLICITATION.
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AT
ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF THE PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary.............................................................................. S-3
The Company................................................................................................ S-3
The Offering............................................................................................... S-4
Summary Financial Information.............................................................................. S-5
Use of Proceeds............................................................................................ S-6
Supplemental Description of the Common Stock............................................................... S-6
Underwriting............................................................................................... S-6
PROSPECTUS
Available Information...................................................................................... 1
Documents Incorporated by Reference........................................................................ 1
The Company................................................................................................ 2
Pending Acquisition of Synergy Group Incorporated.......................................................... 5
Northwestern Public Service Company and Synergy Group Incorporated Pro Forma Financial Information......... 10
The NWPS Trusts............................................................................................ 19
Use of Proceeds............................................................................................ 20
Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Dividends.......... 20
Description of the Mortgage Bonds.......................................................................... 20
Description of the Subordinated Debt Securities............................................................ 32
Description of the Preferred Securities.................................................................... 40
Description of the Guarantees.............................................................................. 41
Description of the Common Stock............................................................................ 43
Legal Opinions............................................................................................. 45
Experts.................................................................................................... 46
Plan of Distribution....................................................................................... 46
</TABLE>
S-2
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE
CONSIDERED IN CONJUNCTION WITH, THE INFORMATION AND FINANCIAL STATEMENTS
APPEARING ELSEWHERE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS AND THE DOCUMENTS INCORPORATED THEREIN BY REFERENCE.
THE COMPANY
The principal business of Northwestern Public Service Company (the
"Company") is energy distribution. The Company is engaged in providing regulated
electric and natural gas service in South Dakota and natural gas service in
Nebraska. The Company serves approximately 54,900 electric customers and 75,000
gas customers representing a diverse mix of residential, commercial and
industrial customers. In addition, the Company has investments in nonutility
businesses and has recently contracted to acquire Synergy Group Incorporated
("Synergy"), a major propane distribution company. See "The Company" and
"Pending Acquisition of Synergy Group Incorporated" in the accompanying
Prospectus.
The Company's electric business generates, transmits and distributes
electricity to over 100 communities in eastern South Dakota. In 1994, 46% of the
Company's total operating revenues were from the sale of electric energy. At
December 31, 1994, the aggregate capacity of all Company-owned electric
generating units was 309,000 kilowatts ("kw"), consisting of 202,000 kw from
jointly-owned baseload plants and 107,000 kw from internal combustion turbine
and diesel units used primarily for peaking purposes. All of the Company's
baseload plants are fueled by coal. The Company has maintained competitive
electric rates when compared to neighboring utilities and has a competitive
electric baseload generating production cost, which includes fuel and plant
operating expenses, of less than 1.5 CENTS per kilowatt hour.
The Company's natural gas business purchases, transports and distributes
natural gas to over 50 communities in eastern South Dakota and 4 communities in
central Nebraska. In 1994, 40% of the Company's total operating revenues were
from the sale of natural gas. The Company purchases gas supply from more than 20
domestic and Canadian suppliers and transports natural gas supply through five
pipelines. Gas agreements provide for firm deliverable pipeline capacity of
approximately 98,900 million british thermal units ("MMBTU") per day. To
supplement firm gas supplies, the Company owns six propane-air plants and has
contracts for underground natural gas storage services. Over the last five years
the Company has expanded its gas distribution operations to serve 29 new
communities in South Dakota.
The Company's business strategy is summarized by three primary objectives:
- To enhance the Company's competitive position in its energy distribution
businesses;
- To expand energy sales and markets with value-added services for
customers; and
- To provide earnings and dividend growth and increased shareholder value
through its energy distribution businesses and investment and acquisition
activities.
By enhancing the competitive position of its core electric and gas distribution
businesses and expanding its energy sales and markets, the Company believes it
will position itself to be successful in the increasingly competitive electric
and gas distribution businesses anticipated over the next several years. To
supplement growth strategies in its electric and natural gas businesses, the
Company also plans to seek new investment and acquisition opportunities that
have demonstrable growth potential. The primary focus of these investment and
acquisition activities is targeted in energy distribution businesses. The
Company also plans to pursue opportunities in non-energy businesses that
complement its existing operations and provide the capability to enhance
shareholder value.
In May 1995, the Company contracted to acquire Synergy, a retail propane
distributor serving over 200,000 customers from 152 locations in 23 states in
the eastern and south central regions of the U.S. See "Pending Acquisition of
Synergy Group Incorporated" in the accompanying Prospectus. In
S-3
<PAGE>
accordance with its strategic plan, the Company believes that the Synergy
propane distribution operations are complementary to the Company's electric and
natural gas businesses. Propane is the nation's fourth largest energy source
after electricity, natural gas and fuel oil. The acquisition price to be paid
for Synergy is $137.5 million cash (subject to certain adjustments) and certain
securities of the Company's acquisition subsidiary. The Company has entered into
an agreement with a third party for the sale of certain Synergy properties which
will reduce the cash portion of the acquisition price to approximately $100
million. The Company has executed a management agreement with Empire Gas
Corporation ("Empire Gas") for the joint management of the properties after the
acquisition. Empire Gas is the nation's eleventh largest retail propane
distributor. Subsequent to the acquisition and expected third party sale, the
Company's total assets will consist of approximately 65% electric and gas
distribution, 25% propane distribution and 10% marketable securities and other
diversified investments.
The Company's principal executive offices are located at 33 Third Street
S.E., Huron, South Dakota 57350. The Company's telephone number is (605)
352-8411.
THE OFFERING
<TABLE>
<S> <C>
Common Shares offered.................. 1,200,000 shares (1)
Common Shares to be outstanding after
the offering........................... Approximately 8,877,232 shares (1)
Price Range (January 1, 1995 through
July 27, 1995)......................... $25-28 3/8
Current Indicated Annual Dividend...... $1.70 per share
Use of Proceeds........................ The net proceeds will be used to repay short-term
debt to be incurred in connection with a portion of
the financing for the Company's acquisition of a
propane distribution company.
NYSE Symbol............................ NPS
<FN>
- ------------------------
(1) Does not include the Underwriters' option to purchase up to an aggregate of
180,000 additional shares.
</TABLE>
S-4
<PAGE>
SUMMARY FINANCIAL INFORMATION
(in thousands, except percentages and per share amounts)
The financial information presented below should be read in conjunction with
the Company's historical financial statements and the notes thereto which are
incorporated by reference herein and the pro forma financial statements and the
notes thereto included in the accompanying Prospectus. The pro forma financial
information contained in the right column, reflecting the pending acquisition of
Synergy and related matters, was prepared solely to comply with Regulation S-X
of the Securities and Exchange Commission. The pro forma financial information
is based on the assumptions and adjustments set forth under "Northwestern Public
Service Company and Synergy Group Incorporated Pro Forma Financial Information"
in the accompanying Prospectus.
<TABLE>
<CAPTION>
PRO FORMA (1)
------------------------
THREE THREE
MONTHS MONTHS
YEAR ENDED DECEMBER 31, ENDED YEAR ENDED ENDED
---------------------------- MARCH 31, DECEMBER 31, MARCH 31,
1992 1993 1994 1995 1994 1995 (2)
-------- -------- -------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Revenues..................................................... $119,197 $153,257 $157,266 $50,754 $256,634 $82,612
Operating income............................................. 24,809 27,246 30,368 12,882 37,985 20,088
Net income................................................... 13,721 15,191 15,440 7,103 17,463 13,840
Net income available for common stock........................ 13,578 15,070 15,320 7,073 15,300 13,299
Earnings per share........................................... 1.77 1.96 2.00 0.92 1.74 1.51
Dividends paid per common share.............................. 1.59 1.63 1.67 0.425 1.67 0.425
Weighted average shares outstanding.......................... 7,677 7,677 7,677 7,677 8,805 8,805
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, 1995
-----------------------------------
PRO
ACTUAL FORMA
-------- --------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Assets.................................................................................... $363,432 $487,435
-------- --------
-------- --------
Capitalization Summary
Long-term debt (including current maturities)........................................... $129,888 51.6% $181,592 50.7%
Company-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trust (3)... -- -- 24,212 6.8
Cumulative preferred stock (including portion to be redeemed within one year)........... 2,640 1.1 2,640 0.7
Common Stock Equity
Common stock............................................................................ 26,870 -- 31,179 --
Additional paid-in capital.............................................................. 29,923 -- 56,398 --
Retained earnings....................................................................... 59,183 -- 59,183 --
Unrealized gain on investments, net..................................................... 3,181 -- 3,181 --
-------- --------
$119,157 47.3 $149,941 41.8
-------- ------ -------- ------
Total................................................................................. $251,685 100.0% $358,385 100.0%
-------- ------ -------- ------
-------- ------ -------- ------
<FN>
- ------------------------
(1) The pro forma financial information does not purport to present the
financial position or results of operations of the Company had the
acquisition of Synergy actually been completed as of the dates indicated.
In addition, the pro forma financial information is not necessarily
indicative of future results of operations.
(2) The results of operations of Synergy for the three months ended March 31,
1995 are not indicative of a full year's results of operations.
(3) As described in the accompanying Prospectus, all of the assets of NWPS
Capital, the subsidiary trust, will be approximately $31 million of
Subordinated Debt Securities of the Company which will bear interest at the
rate of % per annum, assuming the issuance of 1.2 million Preferred
Securities. Pro Forma amounts shown in the table reflect the portion of the
estimated net proceeds of the offering of Preferred Securities to be used
to fund the acquisition of Synergy.
</TABLE>
S-5
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Common Stock will be used to repay
short-term debt incurred in connection with a portion of the financing obtained
to fund the acquisition of Synergy, including certain transaction costs. See
"Use of Proceeds" in the accompanying Prospectus.
SUPPLEMENTAL DESCRIPTION OF THE COMMON STOCK
PRICE RANGE OF COMMON STOCK AND DIVIDEND INFORMATION
The Common Stock of the Company is listed on the New York Stock Exchange
(NYSE). The ticker symbol is "NPS", although it is frequently presented as
"NowestPS" or "NWPS" in various financial publications. The following table sets
forth, for the indicated periods, the price range of the Common Stock as
reported on the NYSE Composite Tape. As of June 8, 1995, there were 7,999 record
holders of the Company's Common Stock (7,677,232 Shares of Common Stock
outstanding).
<TABLE>
<CAPTION>
PRICE PER SHARE CASH
--------------- DIVIDENDS
HIGH LOW PER SHARE
------- ---- ---------
<S> <C> <C> <C>
1993
- -----------------------------------------------------------
First Quarter............................................ $29 1/2 $26 1/4 $ .405
Second Quarter........................................... 31 1/2 28 3/4 .405
Third Quarter............................................ 33 1/2 29 1/4 .405
Fourth Quarter........................................... 32 1/2 28 1/2 .415
1994
- -----------------------------------------------------------
First Quarter............................................ $29 $26 .415
Second Quarter........................................... 29 5/8 26 .415
Third Quarter............................................ 29 3/8 27 1/2 .415
Fourth Quarter........................................... 28 7/8 24 1/2 .425
1995
- -----------------------------------------------------------
First Quarter............................................ 27 3/8 25 1/4 .425
Second Quarter........................................... 28 3/8 25 .425
Third Quarter (through July 27, 1995).................... 26 1/4 25 1/4
</TABLE>
The last reported sale price of the Common Stock on July 27, 1995 was $26
per share.
The Company has paid cash dividends on its Common Stock in each fiscal
quarter since 1947. The payment of dividends in the future is subject to the
Company's earnings and financial condition and such other factors as the
Company's Board of Directors may deem relevant. In addition, certain covenants
in the debt instruments of the Company's subsidiaries limit the amounts
available for dividends. See "Description of the Common Stock" in the
accompanying Prospectus.
UNDERWRITING
Under the terms and subject to the conditions contained in the Underwriting
Agreement dated the date hereof (the Underwriting Agreement), each of the
Underwriters named below, for whom Morgan Stanley & Co. Incorporated and
PaineWebber Incorporated are acting as representatives (the
S-6
<PAGE>
"Representatives"), have severally agreed to purchase, and the Company has
agreed to sell to them, severally, the respective number of shares of Common
Stock set forth opposite their respective names below:
<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
- -------------------------------------------------------------------------------- --------------
<S> <C>
Morgan Stanley & Co. Incorporated...............................................
PaineWebber Incorporated........................................................
--------------
Total....................................................................... 1,200,000
--------------
--------------
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Common Stock offered hereby
are subject to the approval of certain legal matters by its counsel and to
certain other conditions. The Underwriters are committed to take and pay for all
of the Common Stock offered hereby (other than those covered by the
Underwriters' over-allotment option described below) if any such shares are
taken.
The Underwriters propose to offer part of the Common Stock directly to the
public at the public offering price set forth on the cover page hereof and part
to certain dealers at a price that represents a concession not in excess of
$ per share of Common Stock. The Underwriters may allow, and such dealers
may reallow, a concession of $ per share of Common Stock to certain other
dealers.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Company has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus Supplement, to purchase up to an
additional 180,000 shares of Common Stock at the public offering price set forth
on the cover page hereof, less underwriting discounts and commissions. The
Underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, incurred in the sale of the Common Stock.
The Company has agreed in the Underwriting Agreement not to directly or
indirectly (1) offer, pledge, sell, contract or otherwise dispose of any Common
Stock or any securities convertible into or exchangeable for Common Stock or (2)
enter into any swap or similar agreement that transfers, in whole or in part,
the economic risk of ownership of Common Stock, whether any such transaction
described in clause (1) or (2) is to be settled by delivery of Common Stock or
other securities, in cash or otherwise, for a period of 90 days after the date
of this Prospectus Supplement, without the prior written consent of Morgan
Stanley & Co. Incorporated, provided that the Company may during such 90 day
period issue shares under its dividend reinvestment, customer stock purchase and
other plans.
Certain of the Underwriters engage in (or in the future may engage in)
transactions with, and provide services for, the Company or its affiliates in
the ordinary course of business. Morgan Stanley & Co. Incorporated represents
Synergy in connection with the pending acquisition of Synergy by the Company
described under "Pending Acquisition of Synergy Group Incorporated" included in
the accompanying Prospectus.
S-7
<PAGE>
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 PRELIMINARY PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PRELIMINARY 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>
PROSPECTUS SUPPLEMENT (SUBJECT TO COMPLETION, ISSUED JULY 28, 1995)
(TO PROSPECTUS DATED , 1995)
1,200,000 PREFERRED SECURITIES
NWPS CAPITAL FINANCING I
% TRUST PREFERRED CAPITAL SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
NORTHWESTERN PUBLIC SERVICE COMPANY
------------
THE % TRUST PREFERRED CAPITAL SECURITIES (THE "PREFERRED SECURITIES")
OFFERED HEREBY REPRESENT PREFERRED UNDIVIDED BENEFICIAL INTERESTS IN THE ASSETS
OF NWPS CAPITAL FINANCING I, A STATUTORY BUSINESS TRUST FORMED UNDER THE LAWS OF
THE STATE OF DELAWARE ("NWPS CAPITAL" OR THE "TRUST"). NORTHWESTERN PUBLIC
SERVICE COMPANY, A DELAWARE CORPORATION (THE "COMPANY"), WILL DIRECTLY OR
INDIRECTLY OWN ALL THE COMMON SECURITIES (THE "COMMON SECURITIES" AND, TOGETHER
WITH THE PREFERRED SECURITIES, THE "TRUST SECURITIES") REPRESENTING UNDIVIDED
BENEFICIAL INTERESTS IN THE ASSETS OF NWPS CAPITAL. NWPS CAPITAL EXISTS FOR THE
SOLE PURPOSE OF ISSUING THE PREFERRED SECURITIES AND COMMON SECURITIES AND
INVESTING THE PROCEEDS THEREOF IN AN EQUIVALENT AMOUNT OF % JUNIOR
SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE , 2025 ("SUBORDINATED
DEBT SECURITIES") OF THE COMPANY. UPON AN EVENT OF A DEFAULT UNDER THE
DECLARATION (AS DEFINED HEREIN), THE HOLDERS OF PREFERRED SECURITIES WILL HAVE A
PREFERENCE OVER THE HOLDERS OF THE COMMON SECURITIES WITH RESPECT TO PAYMENTS IN
RESPECT OF DISTRIBUTIONS AND PAYMENTS UPON REDEMPTION, LIQUIDATION AND
OTHERWISE.
(CONTINUED ON FOLLOWING PAGE)
------------------------
SEE "RISK FACTORS" COMMENCING ON PAGE S-7 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD
AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE
PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
-----------------
THE PREFERRED SECURITIES HAVE BEEN APPROVED FOR LISTING ON THE NEW YORK STOCK
EXCHANGE, SUBJECT TO OFFICIAL NOTICE OF ISSUANCE. TRADING OF THE PREFERRED
SECURITIES ON THE NEW YORK STOCK EXCHANGE IS EXPECTED TO COMMENCE WITHIN A
SEVEN-DAY PERIOD AFTER THE DATE OF THIS PROSPECTUS
SUPPLEMENT. SEE "UNDERWRITING."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------
PRICE $25 PER SECURITY AND ACCRUED DISTRIBUTIONS, IF ANY
-------------------
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS
PRICE TO DISCOUNTS AND TO NWPS
PUBLIC (1) COMMISSION (2) CAPITAL (3)(4)
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
PER PREFERRED SECURITY................................ $25.00 (4) $25.00
TOTAL................................................. $30,000,000 (4) $30,000,000
<FN>
- ---------
(1) PLUS ACCRUED DISTRIBUTIONS, IF ANY, FROM THE DATE OF INITIAL ISSUE.
(2) NWPS CAPITAL AND THE COMPANY HAVE AGREED TO INDEMNIFY THE SEVERAL
UNDERWRITERS AGAINST CERTAIN LIABILITIES, INCLUDING LIABILITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. SEE "UNDERWRITING."
(3) BECAUSE THE PROCEEDS OF THE SALE OF THE PREFERRED SECURITIES WILL
ULTIMATELY BE USED TO PURCHASE SUBORDINATED DEBT SECURITIES, THE
COMPANY HAS AGREED, IN THE UNDERWRITING AGREEMENT, TO PAY TO THE
UNDERWRITERS AS COMPENSATION FOR THEIR SERVICES $ PER PREFERRED
SECURITY (OR $ IN THE AGGREGATE); PROVIDED THAT SUCH COMPENSATION
WILL BE $ PER PREFERRED SECURITY SOLD TO CERTAIN INSTITUTIONS.
SEE "UNDERWRITING."
(4) EXPENSES OF THE OFFERING, WHICH ARE PAYABLE BY THE COMPANY, ARE
ESTIMATED TO BE $700,000.
</TABLE>
-------------------
THE PREFERRED SECURITIES ARE OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS AND IF
ACCEPTED BY THE UNDERWRITERS AND SUBJECT TO APPROVAL OF CERTAIN LEGAL MATTERS BY
WINTHROP, STIMSON, PUTNAM & ROBERTS, COUNSEL FOR THE UNDERWRITERS. IT IS
EXPECTED THAT DELIVERY OF THE PREFERRED SECURITIES WILL BE MADE ON OR ABOUT
AUGUST , 1995 THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY TRUST
COMPANY AGAINST PAYMENT THEREFOR IN IMMEDIATELY AVAILABLE FUNDS.
-------------------
MORGAN STANLEY & CO.
INCORPORATED
DEAN WITTER REYNOLDS INC.
NATWEST CAPITAL MARKETS LIMITED
PAINEWEBBER INCORPORATED
PIPER JAFFRAY INC.
AUGUST , 1995
<PAGE>
(CONTINUED FROM PRIOR PAGE)
HOLDERS OF THE PREFERRED SECURITIES ARE ENTITLED TO RECEIVE CUMULATIVE CASH
DISTRIBUTIONS AT AN ANNUAL RATE OF % OF THE LIQUIDATION AMOUNT OF $25 PER
PREFERRED SECURITY, ACCRUING FROM THE DATE OF ORIGINAL ISSUANCE AND PAYABLE
QUARTERLY IN ARREARS ON MARCH 31, JUNE 30, SEPTEMBER 30 AND DECEMBER 31 OF EACH
YEAR, COMMENCING , 1995 ("DISTRIBUTIONS"). THE PAYMENT OF
DISTRIBUTIONS OUT OF MONEYS HELD BY NWPS CAPITAL AND PAYMENTS ON LIQUIDATION OF
NWPS CAPITAL OR THE REDEMPTION OF PREFERRED SECURITIES, AS SET FORTH BELOW, ARE
GUARANTEED BY THE COMPANY (THE "GUARANTEE") TO THE EXTENT NWPS CAPITAL HAS FUNDS
LEGALLY AVAILABLE THEREFOR AS DESCRIBED UNDER "DESCRIPTION OF THE GUARANTEES" IN
THE ACCOMPANYING PROSPECTUS. THE OBLIGATIONS OF THE COMPANY UNDER THE GUARANTEE
ARE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO ALL OTHER LIABILITIES OF THE
COMPANY AND PARI PASSU WITH THE MOST SENIOR PREFERRED STOCK ISSUED FROM TIME TO
TIME BY THE COMPANY. THE OBLIGATIONS OF THE COMPANY UNDER THE SUBORDINATED DEBT
SECURITIES ARE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO ALL PRESENT AND
FUTURE SENIOR INDEBTEDNESS (AS DEFINED HEREIN) OF THE COMPANY, WHICH AGGREGATED
APPROXIMATELY $124 MILLION AT MARCH 31, 1995, AND RANK PARI PASSU WITH THE
COMPANY'S OTHER GENERAL UNSECURED CREDITORS.
THE DISTRIBUTION RATE AND THE DISTRIBUTION AND OTHER PAYMENT DATES FOR THE
PREFERRED SECURITIES WILL CORRESPOND TO THE INTEREST RATE AND INTEREST AND OTHER
PAYMENT DATES ON THE SUBORDINATED DEBT SECURITIES, WHICH WILL BE THE SOLE ASSETS
OF NWPS CAPITAL. AS A RESULT, IF PRINCIPAL OR INTEREST IS NOT PAID ON THE
SUBORDINATED DEBT SECURITIES, NO AMOUNTS WILL BE PAID ON THE PREFERRED
SECURITIES. IF THE COMPANY DOES NOT MAKE PRINCIPAL OR INTEREST PAYMENTS ON THE
SUBORDINATED DEBT SECURITIES, NWPS CAPITAL WILL NOT HAVE SUFFICIENT FUNDS TO
MAKE DISTRIBUTIONS ON THE PREFERRED SECURITIES, IN WHICH EVENT, THE GUARANTEE
WILL NOT APPLY TO SUCH DISTRIBUTIONS UNTIL NWPS CAPITAL HAS SUFFICIENT FUNDS
LEGALLY AVAILABLE THEREFOR.
THE COMPANY HAS THE RIGHT TO DEFER PAYMENTS OF INTEREST ON THE SUBORDINATED
DEBT SECURITIES BY EXTENDING THE INTEREST PAYMENT PERIOD ON THE SUBORDINATED
DEBT SECURITIES AT ANY TIME FOR UP TO 20 CONSECUTIVE QUARTERS (EACH, AN
"EXTENSION PERIOD"). IF INTEREST PAYMENTS ARE SO DEFERRED, DISTRIBUTIONS ON THE
PREFERRED SECURITIES WILL ALSO BE DEFERRED. DURING AN EXTENSION PERIOD,
DISTRIBUTIONS WILL CONTINUE TO ACCRUE WITH INTEREST THEREON (TO THE EXTENT
PERMITTED BY APPLICABLE LAW) AT AN ANNUAL RATE OF % PER ANNUM, COMPOUNDED
QUARTERLY. DURING ANY EXTENSION PERIOD, HOLDERS OF PREFERRED SECURITIES WILL BE
REQUIRED TO INCLUDE DEFERRED INTEREST INCOME IN THEIR GROSS INCOME FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES IN ADVANCE OF RECEIPT OF THE CASH
DISTRIBUTIONS WITH RESPECT TO SUCH DEFERRED INTEREST PAYMENTS. THERE COULD BE
MULTIPLE EXTENSION PERIODS OF VARYING LENGTHS THROUGHOUT THE TERM OF THE
SUBORDINATED DEBT SECURITIES. SEE "DESCRIPTION OF THE SUBORDINATED DEBT
SECURITIES -- OPTION TO EXTEND INTEREST PAYMENT PERIOD." IF THE COMPANY
EXERCISES THE RIGHT TO EXTEND AN INTEREST PAYMENT PERIOD, THE COMPANY SHALL NOT
DURING SUCH EXTENSION PERIOD (A) DECLARE OR PAY DIVIDENDS ON, OR MAKE A
DISTRIBUTION WITH RESPECT TO, OR REDEEM, PURCHASE OR ACQUIRE, OR MAKE A
LIQUIDATION PAYMENT WITH RESPECT TO, ANY OF ITS CAPITAL STOCK AND (B) MAKE ANY
PAYMENT OF INTEREST, PRINCIPAL OR PREMIUM, IF ANY, ON OR REPAY, REPURCHASE OR
REDEEM ANY DEBT SECURITIES ISSUED BY THE COMPANY THAT RANK PARI PASSU WITH OR
JUNIOR TO THE SUBORDINATED DEBT SECURITIES; PROVIDED, HOWEVER, THAT RESTRICTION
(A) ABOVE DOES NOT APPLY TO ANY STOCK DIVIDENDS PAID BY THE COMPANY WHERE THE
DIVIDEND STOCK IS THE SAME AS THAT ON WHICH THE DIVIDEND IS BEING PAID. THE
COMPANY HAS NO PRESENT INTENTION OF EXERCISING ITS RIGHT TO EXTEND AN INTEREST
PAYMENT PERIOD. SEE "RISK FACTORS -- OPTION TO EXTEND INTEREST PAYMENT PERIOD"
AND "UNITED STATES FEDERAL INCOME TAXATION -- ORIGINAL ISSUE DISCOUNT."
THE SUBORDINATED DEBT SECURITIES ARE REDEEMABLE BY THE COMPANY, IN WHOLE OR
IN PART, FROM TIME TO TIME, ON OR AFTER , 2000, OR AT ANY TIME IN
CERTAIN CIRCUMSTANCES UPON THE OCCURRENCE OF A TAX EVENT (AS DEFINED HEREIN). IF
THE COMPANY REDEEMS SUBORDINATED DEBT SECURITIES, NWPS CAPITAL MUST REDEEM TRUST
SECURITIES HAVING AN AGGREGATE LIQUIDATION AMOUNT EQUAL TO THE AGGREGATE
PRINCIPAL AMOUNT OF THE SUBORDINATED DEBT SECURITIES SO REDEEMED AT $25 PER
SECURITY PLUS ACCRUED AND UNPAID DISTRIBUTIONS THEREON (THE "REDEMPTION PRICE")
TO THE DATE FIXED FOR REDEMPTION. SEE "DESCRIPTION OF THE PREFERRED SECURITIES
- -- MANDATORY REDEMPTION." THE PREFERRED SECURITIES WILL BE REDEEMED UPON
MATURITY OF THE SUBORDINATED DEBT SECURITIES. THE SUBORDINATED DEBT SECURITIES
MATURE ON , 2025 BUT THE MATURITY DATE MAY BE EXTENDED ONLY ONCE, FOR
UP TO AN ADDITIONAL 19 YEARS AT THE OPTION OF THE COMPANY, PROVIDED CERTAIN
CONDITIONS ARE MET. SEE "DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES --
OPTION TO EXTEND MATURITY DATE." IN ADDITION, UPON THE OCCURRENCE OF CERTAIN
SPECIAL EVENTS (AS DEFINED HEREIN) ARISING FROM A CHANGE IN LAW OR A CHANGE IN
LEGAL INTERPRETATION, UNLESS THE SUBORDINATED DEBT SECURITIES ARE REDEEMED IN
THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN, NWPS CAPITAL SHALL BE DISSOLVED,
WITH THE RESULT THAT THE SUBORDINATED DEBT SECURITIES WILL BE DISTRIBUTED TO THE
HOLDERS OF THE PREFERRED SECURITIES, ON A PRO RATA BASIS, IN LIEU OF ANY CASH
DISTRIBUTION. SEE "DESCRIPTION OF THE PREFERRED SECURITIES --SPECIAL EVENT
REDEMPTION OR DISTRIBUTION." IN CERTAIN CIRCUMSTANCES, THE COMPANY WILL HAVE THE
RIGHT TO REDEEM THE SUBORDINATED DEBT SECURITIES, WHICH WOULD RESULT IN THE
REDEMPTION BY NWPS CAPITAL OF TRUST SECURITIES IN THE SAME AMOUNT ON A PRO RATA
BASIS. IF THE SUBORDINATED DEBT SECURITIES ARE DISTRIBUTED TO THE HOLDERS OF THE
PREFERRED SECURITIES, THE COMPANY WILL USE ITS BEST EFFORTS TO HAVE THE
SUBORDINATED DEBT SECURITIES LISTED ON THE NEW YORK STOCK EXCHANGE OR ON SUCH
OTHER EXCHANGE AS THE PREFERRED SECURITIES ARE THEN LISTED. SEE "DESCRIPTION OF
THE PREFERRED SECURITIES -- TAX EVENT REDEMPTION OR DISTRIBUTION" AND
"DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES."
IN THE EVENT OF THE INVOLUNTARY OR VOLUNTARY DISSOLUTION, WINDING UP OR
TERMINATION OF NWPS CAPITAL, THE HOLDERS OF THE PREFERRED SECURITIES WILL BE
ENTITLED TO RECEIVE FOR EACH PREFERRED SECURITY A LIQUIDATION AMOUNT OF $25 PLUS
ACCRUED AND UNPAID DISTRIBUTIONS THEREON (INCLUDING INTEREST THEREON) TO THE
DATE OF PAYMENT, UNLESS, IN CONNECTION WITH SUCH DISSOLUTION, THE SUBORDINATED
DEBT SECURITIES ARE DISTRIBUTED TO THE HOLDERS OF THE PREFERRED SECURITIES. SEE
"DESCRIPTION OF THE PREFERRED SECURITIES -- LIQUIDATION DISTRIBUTION UPON
DISSOLUTION."
S-2
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, IN
CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, NWPS CAPITAL OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH
AN OFFER OR SOLICITATION. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THE PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary................................................................................... S-4
The Company..................................................................................................... S-4
Summary Financial Information................................................................................... S-6
Risk Factors.................................................................................................... S-7
NWPS Capital Financing I........................................................................................ S-10
Use of Proceeds................................................................................................. S-11
Accounting Treatment............................................................................................ S-11
Description of the Preferred Securities......................................................................... S-11
Description of the Subordinated Debt Securites.................................................................. S-22
Effect of Obligations Under the Subordinated Debt Securities and the Guarantee.................................. S-28
United States Federal Income Taxation........................................................................... S-29
Underwriting.................................................................................................... S-32
Legal Matters................................................................................................... S-33
PROSPECTUS
Available Information........................................................................................... 1
Documents Incorporated by Reference............................................................................. 1
The Company..................................................................................................... 2
Pending Acquisition of Synergy Group Incorporated............................................................... 5
Northwestern Public Service Company and Synergy Group Incorporated Pro Forma Financial Information.............. 10
The NWPS Trusts................................................................................................. 19
Use of Proceeds................................................................................................. 20
Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Dividends............... 20
Description of the Mortgage Bonds............................................................................... 20
Description of the Subordinated Debt Securities................................................................. 32
Description of the Preferred Securities......................................................................... 40
Description of the Guarantees................................................................................... 41
Description of the Common Stock................................................................................. 43
Legal Opinions.................................................................................................. 45
Experts......................................................................................................... 46
Plan of Distribution............................................................................................ 46
</TABLE>
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 TRANSACTIONS, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-3
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE
CONSIDERED IN CONJUNCTION WITH, THE INFORMATION AND FINANCIAL STATEMENTS
APPEARING ELSEWHERE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS AND THE DOCUMENTS INCORPORATED THEREIN BY REFERENCE.
THE COMPANY
The principal business of Northwestern Public Service Company (the
"Company") is energy distribution. The Company is engaged in providing regulated
electric and natural gas service in South Dakota and natural gas service in
Nebraska. The Company serves approximately 54,900 electric customers and 75,000
gas customers representing a diverse mix of residential, commercial and
industrial customers. In addition, the Company has investments in nonutility
businesses and has recently contracted to acquire Synergy Group Incorporated
("Synergy"), a major propane distribution company. See "The Company" and
"Pending Acquisition of Synergy Group Incorporated" in the accompanying
Prospectus.
The Company's electric business generates, transmits and distributes
electricity to over 100 communities in eastern South Dakota. In 1994, 46% of the
Company's total operating revenues were from the sale of electric energy. At
December 31, 1994, the aggregate capacity of all Company-owned electric
generating units was 309,000 kilowatts ("kw"), consisting of 202,000 kw from
jointly-owned baseload plants and 107,000 kw from internal combustion turbine
and diesel units used primarily for peaking purposes. All of the Company's
baseload plants are fueled by coal. The Company has maintained competitive
electric rates when compared to neighboring utilities and has a competitive
electric baseload generating production cost, which includes fuel and plant
operating expenses, of less than 1.5 CENTS per kilowatt hour.
The Company's natural gas business purchases, transports and distributes
natural gas to over 50 communities in eastern South Dakota and 4 communities in
central Nebraska. In 1994, 40% of the Company's total operating revenues were
from the sale of natural gas. The Company purchases gas supply from more than 20
domestic and Canadian suppliers and transports natural gas supply through five
pipelines. Gas agreements provide for firm deliverable pipeline capacity of
approximately 98,900 million british thermal units ("MMBTU") per day. To
supplement firm gas supplies, the Company owns six propane-air plants and has
contracts for underground natural gas storage services. Over the last five years
the Company has expanded its gas distribution operations to serve 29 new
communities in South Dakota.
The Company's business strategy is summarized by three primary objectives:
- To enhance the Company's competitive position in its energy distribution
businesses;
- To expand energy sales and markets with value-added services for
customers; and
- To provide earnings and dividend growth and increased shareholder value
through its energy distribution businesses and investment and acquisition
activities.
By enhancing the competitive position of its core electric and gas distribution
businesses and expanding its energy sales and markets, the Company believes it
will position itself to be successful in the increasingly competitive electric
and gas distribution businesses anticipated over the next several years. To
supplement growth strategies in its electric and natural gas businesses, the
Company also plans to seek new investment and acquisition opportunities that
have demonstrable growth potential. The primary focus of these investment and
acquisition activities is targeted in energy distribution businesses. The
Company also plans to pursue opportunities in non-energy businesses that
complement its existing operations and provide the capability to enhance
shareholder value.
In May 1995, the Company contracted to acquire Synergy, a retail propane
distributor serving over 200,000 customers from 152 locations in 23 states in
the eastern and south central regions of the U.S. See "Pending Acquisition of
Synergy Group Incorporated" in the accompanying Prospectus. In
S-4
<PAGE>
accordance with its strategic plan, the Company believes that the Synergy
propane distribution operations are complementary to the Company's electric and
natural gas businesses. Propane is the nation's fourth largest energy source
after electricity, natural gas and fuel oil. The acquisition price to be paid
for Synergy is $137.5 million cash (subject to certain adjustments) and certain
securities of the Company's acquisition subsidiary. The Company has entered into
an agreement with a third party for the sale of certain Synergy properties which
will reduce the cash portion of the acquisition price to approximately $100
million. The Company has executed a management agreement with Empire Gas
Corporation ("Empire Gas") for the joint management of the properties after the
acquisition. Empire Gas is the nation's eleventh largest retail propane
distributor. Subsequent to the acquisition and expected third party sale, the
Company's total assets will consist of approximately 65% electric and gas
distribution, 25% propane distribution and 10% marketable securities and other
diversified investments.
The Company's principal executive offices are located at 33 Third Street
S.E., Huron, South Dakota 57350. The Company's telephone number is (605)
352-8411.
S-5
<PAGE>
SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PERCENTAGES AND PER SHARE AMOUNTS)
The financial information presented below should be read in conjunction with
the Company's historical financial statements and the notes thereto which are
incorporated by reference herein and the pro forma financial statements and the
notes thereto included in the accompanying Prospectus. The pro forma financial
information contained in the right column, reflecting the pending acquisition of
Synergy and related matters, was prepared solely to comply with Regulation S-X
of the Securities and Exchange Commission. The pro forma financial information
is based on the assumptions and adjustments set forth under "Northwestern Public
Service Company and Synergy Group Incorporated Pro Forma Financial Information"
in the accompanying Prospectus.
<TABLE>
<CAPTION>
PRO FORMA (1)
-------------------------
THREE THREE
YEAR ENDED DECEMBER 31, MONTHS YEAR ENDED MONTHS
------------------------------------- ENDED MARCH DECEMBER 31, ENDED MARCH
1992 1993 1994 31, 1995 1994 31, 1995(2)
----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.......................... $ 119,197 $ 153,257 $ 157,266 $ 50,754 $ 256,634 $ 82,612
Operating income.................. 24,809 27,246 30,368 12,882 37,985 20,088
Net income........................ 13,721 15,191 15,440 7,103 17,463 13,840
Net income available for common
stock............................ 13,578 15,070 15,320 7,073 15,300 13,299
Earnings per share................ 1.77 1.96 2.00 0.92 1.74 1.51
Dividends paid per common share... 1.59 1.63 1.67 0.425 1.67 0.425
Weighted average shares
outstanding...................... 7,677 7,677 7,677 7,677 8,805 8,805
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, 1995
--------------------------------------------------
ACTUAL PRO FORMA
----------- -----------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Assets.......................................................... $ 363,432 $ 487,435
----------- -----------
----------- -----------
Capitalization Summary
Long-term debt (including current maturities)................. $ 129,888 51.6% $ 181,592 50.7%
Company-Obligated Mandatory Redeemable Preferred Securities of
Subsidiary Trust (3)......................................... -- -- 24,212 6.8
Cumulative preferred stock (including portion to be redeemed
within one year)............................................. 2,640 1.1 2,640 0.7
Common Stock Equity
Common stock.................................................. 26,870 -- 31,179 --
Additional paid-in capital.................................... 29,923 -- 56,398 --
Retained earnings............................................. 59,183 -- 59,183 --
Unrealized gain on investments, net........................... 3,181 -- 3,181 --
----------- -----------
$ 119,157 47.3 $ 149,941 41.8
----------- ----- ----------- -----
Total....................................................... $ 251,685 100.0% $ 358,385 100.0%
----------- ----- ----------- -----
----------- ----- ----------- -----
<FN>
- ------------------------
(1) The pro forma financial information does not purport to present the
financial position or results of operations of the Company had the
acquisition of Synergy actually been completed as of the dates indicated.
In addition, the pro forma financial information is not necessarily
indicative of future results of operations.
(2) The results of operations of Synergy for the three months ended March 31,
1995 are not indicative of a full year's results of operations.
(3) As described herein, all of the assets of NWPS Capital, the subsidiary
trust, will be approximately $31 million of Subordinated Debt Securities of
the Company which will bear interest at the rate of % per annum, assuming
the issuance of 1.2 million Preferred Securities. Pro Forma amounts shown
in the table reflect the portion of the estimated net proceeds of the
offering of the Preferred Securities to be used to fund the acquisition of
Synergy.
</TABLE>
S-6
<PAGE>
The following information concerning the Company, NWPS Capital, the
Preferred Securities, the Guarantee and the Subordinated Debt Securities
supplements, and should be read in conjunction with, the information contained
in the accompanying Prospectus. Capitalized terms used in this Prospectus
Supplement have the same meanings as in the accompanying Prospectus.
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND SUBORDINATED DEBT
SECURITIES
The Company's obligations under the Guarantee are subordinate and junior in
right of payment to all other liabilities of the Company and pari passu with the
most senior preferred stock issued from time to time by the Company. The
obligations of the Company under the Subordinated Debt Securities are
subordinate and junior in right of payment to all present and future Senior
Indebtedness of the Company and pari passu with obligations to or rights of the
Company's other general unsecured creditors. As of March 31, 1995, Senior
Indebtedness aggregated approximately $124 million. There are no terms in the
Preferred Securities, the Subordinated Debt Securities or the Guarantee that
limit the Company's ability to incur additional indebtedness, including
indebtedness that ranks senior to the Subordinated Debt Securities and the
Guarantee. See "Description of the Guarantees -- Status of the Guarantees" and
"Description of the Subordinated Debt Securities -- Subordination" in the
accompanying Prospectus, and "Description of the Subordinated Debt Securities --
Subordination" herein.
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Wilmington Trust Company
will act as indenture trustee under the Guarantee for the purposes of compliance
with the Trust Indenture Act (the "Guarantee Trustee"). The Guarantee Trustee
will hold the Guarantee for the benefit of the holders of the Preferred
Securities.
The Guarantee guarantees to the holders of the Preferred Securities the
payment of (i) any accrued and unpaid distributions that are required to be paid
on the Preferred Securities, to the extent the Company has made a payment of
interest or principal on the Subordinated Debt Securities, (ii) the Redemption
Price, including all accrued and unpaid distributions with respect to Preferred
Securities called for redemption by NWPS Capital, to the extent the Company has
made a payment of interest or principal on the Subordinated Debt Securities, and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
NWPS Capital (other than in connection with the distribution of Subordinated
Debt Securities to the holders of Preferred Securities or redemption of all the
Preferred Securities upon the maturity or redemption of the Subordinated Debt
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Preferred Securities to the date of the
payment to the extent NWPS Capital has funds legally available therefor and (b)
the amount of assets of NWPS Capital remaining available for distribution to
holders of the Preferred Securities in liquidation of NWPS Capital. 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 or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under the Guarantee. If the Guarantee
Trustee fails to enforce the Guarantee, any holder of Preferred Securities may,
after such holder's written request to the Guarantee Trustee to enforce the
Guarantee, institute a legal proceeding directly against the Company to enforce
the Guarantee Trustee's rights under the Guarantee without first instituting a
legal proceeding against NWPS Capital, the Guarantee Trustee or any other person
or entity. If the Company were to default on its obligation to pay amounts
payable on the Subordinated Debt Securities, NWPS Capital would lack available
funds for the payment of distributions or amounts payable on
S-7
<PAGE>
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. Instead, holders of the Preferred Securities would be
required to rely on the enforcement by the Property Trustee of its rights as
registered holder of the Subordinated Debt Securities against the Company
pursuant to the terms of the Subordinated Debt Securities and may also vote to
appoint a Special Regular Trustee who shall have the same rights, powers and
privileges as the Regular Trustees. See "Description of the Guarantees" and
"Description of the Subordinated Debt Securities" in the accompanying
Prospectus. The Declaration provides that each holder of Preferred Securities,
by acceptance thereof, agrees to the provisions of the Guarantee, including the
subordination provisions thereof, and the Subordinated Debt Securities
Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If (i) NWPS Capital fails to pay distributions in full on the Preferred
Securities for six consecutive quarterly distribution periods or (ii) a
Declaration Event of Default (as defined herein) occurs and is continuing, then
the holders of Preferred Securities would be entitled, by majority vote, to
appoint a Special Regular Trustee, who shall have the same rights, powers and
privileges as the other Regular Trustees. In addition, the holders of a majority
in aggregate liquidation amount of the Preferred Securities will have the right
to: (i) direct the time, method, and place of conducting any proceeding for any
remedy available to the Property Trustee or to direct the exercise of any trust
or power conferred upon the Property Trustee under the Declaration; (ii) waive
any past default; or (iii) exercise any right to rescind or annul a declaration
that the principal of all the Subordinated Debt Securities shall be due and
payable; provided, however, that where a consent under the Indenture requires
the consent of all holders of the Subordinated Debt Securities affected thereby,
the Property Trustee may only give such consent at the direction of all holders
of the Preferred Securities. If the Property Trustee fails to enforce its rights
under the Subordinated Debt Securities, to the fullest extent permitted by law,
a holder of Preferred Securities may, after such holder's written request to the
Property Trustee to enforce such rights, institute a legal proceeding directly
against the Company to enforce the Property Trustee's rights under the
Subordinated Debt Securities without first instituting any legal proceeding
against the Property Trustee or any other person or entity. If the Company
exercises its right to defer payments of interest on the Subordinated Debt
Securities (See "Option to Extend Interest Payment Period" below), appointment
of a Special Regular Trustee would be the only right of the holders of the
Preferred Securities if NWPS Capital fails to pay distributions in full on the
Preferred Securities for six consecutive quarters until expiration of the
extended interest payment period (20 consecutive quarters).
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company has the right under the Indenture (as such term is defined in
"Description of Subordinated Debt Securities" herein), to defer payments of
interest on the Subordinated Debt Securities by extending the interest payment
period at any time, and from time to time, on the Subordinated Debt Securities.
As a consequence of such an extension, quarterly distributions on the Preferred
Securities would be deferred (but despite such deferral would continue to accrue
with interest thereon compounded quarterly) by NWPS Capital during any such
extended interest payment period. Such right to extend the interest payment
period for the Subordinated Debt Securities is limited to a period not exceeding
20 consecutive quarters (each, an "Extension Period"). In the event that the
Company exercises this right to defer interest payments, then during such
Extension Period (a) the Company shall not declare or pay dividends on, or make
a distribution with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock and (b) the
Company shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by the Company that
rank pari passu with or junior to the Subordinated Debt Securities; provided,
however, that restriction (a) above does not apply to any stock dividends paid
by the Company where the dividend stock is the same stock as that on which the
dividend is being paid. Prior to the termination of any such Extension Period,
the Company may further extend the interest payment period; provided that, such
Extension Period, together with all
S-8
<PAGE>
such previous and further extensions thereof, may not exceed 20 consecutive
quarters. Upon the termination of any Extension Period and the payment of all
amounts then due, the Company may commence a new Extension Period, subject to
the above requirements. See "Description of the Preferred Securities --
Distributions" and "Description of the Subordinated Debt Securities -- Option to
Extend Interest Payment Period."
Should the Company exercise its right to defer payments of interest by
extending the interest payment period, each holder of Preferred Securities will
continue to accrue interest income (as original issue discount) in respect of
the deferred interest allocable to its Preferred Securities for United States
federal income tax purposes, which will be allocated but not distributed to
holders of record of Preferred Securities. As a result, each such holder of
Preferred Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash from
NWPS Capital related to such income if such holder disposes of its Preferred
Securities prior to the record date for the date on which distributions of such
amounts are made. The Company has no current intention of exercising its right
to defer payments of interest by extending the interest payment period on the
Subordinated Debt Securities. However, should the Company determine to exercise
such right in the future, the market price of the Preferred Securities is likely
to be affected. A holder that disposes of its Preferred Securities during an
Extension Period, therefore, may 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 Company's right to defer interest payments, the market price of
the Preferred Securities (which represent an undivided beneficial interest in
the Subordinated Debt Securities) may be more volatile than other securities on
which original issue discount accrues but with respect to which there is no
right to defer interest payments. See "United States Federal Income Taxation --
Original Issue Discount."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Special Event (as defined herein), NWPS Capital
shall be dissolved, except in the limited circumstance described below, with the
result that the Subordinated Debt Securities will be distributed to the holders
of the Trust Securities in connection with the liquidation of NWPS Capital. In
certain circumstances, the Company shall have the right to redeem the
Subordinated Debt Securities, in whole or in part, in lieu of a distribution of
the Subordinated Debt Securities by NWPS Capital, in which event NWPS Capital
will redeem the Trust Securities on a pro rata basis to the same extent as the
Subordinated Debt Securities are redeemed by the Company. See "Description of
the Preferred Securities -- Special Event Redemption or Distribution."
Under current United States federal income tax law, a distribution of
Subordinated Debt Securities upon the dissolution of NWPS Capital would not be a
taxable event to holders of the Preferred Securities. Upon occurrence of a Tax
Event (as defined herein), however, a dissolution of NWPS Capital in which
holders of the Preferred Securities receive cash would be a taxable event to
such holders. See "United States Federal Income Taxation -- Receipt of
Subordinated Debt Securities or Cash Upon Liquidation of NWPS Capital."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debt Securities that may be distributed in
exchange for Preferred Securities if a dissolution or liquidation of NWPS
Capital were to occur. Accordingly, the Preferred Securities that an investor
may purchase, whether pursuant to the offer made hereby or in the secondary
market, or the Subordinated Debt Securities that a holder of Preferred
Securities may receive on dissolution and liquidation of NWPS 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
Subordinated Debt Securities upon the occurrence of a Special Event, prospective
purchasers of Preferred Securities are also making an investment decision with
regard to the Subordinated Debt Securities and should carefully review all the
information regarding the Subordinated Debt Securities contained herein and in
the accompanying Prospectus. See "Description of the Preferred Securities --
Special Event Redemption or Distribution" and "Description of the Subordinated
Debt Securities -- General."
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LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and, except
for the rights of holders of Preferred Securities to appoint a Special Regular
Trustee upon the occurrence of certain events described herein, will not be
entitled to vote to appoint, remove or replace, or to increase or decrease the
number of, NWPS Trustees, which voting rights are vested exclusively in the
holder of the Common Securities.
TRADING PRICE
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
Subordinated Debt Securities. A holder who disposes of his Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Debt Securities through
the date of disposition in income as ordinary income (i.e., OID), and to add
such amount to his adjusted tax basis in his pro rata share of the underlying
Subordinated Debt Securities deemed disposed of. To the extent the selling price
is less than the holder's adjusted tax basis (which will include, in the form of
OID, all accrued but unpaid interest), a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. See
"United States Federal Income Taxation -- Original Issue Discount" and "Sales of
Preferred Securities."
NWPS CAPITAL FINANCING I
NWPS Capital is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust, dated as of June 19, 1995, executed by
the Company, as sponsor (the "Sponsor"), and the trustees of NWPS Capital (the
"NWPS Trustees") and (ii) the filing of a certificate of trust with the
Secretary of State of the State of Delaware on June 19, 1995. The declaration
will be amended and restated in its entirety (as so amended and restated, the
"Declaration") substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus Supplement and the accompanying Prospectus
form a part. The Declaration will be qualified as an indenture under the Trust
Indenture Act. Upon issuance of the Preferred Securities, the purchasers thereof
will own all of the Preferred Securities. See "Description of the Preferred
Securities -- Book-Entry Only Issuance -- The Depository Trust Company." The
Company will directly or indirectly acquire Common Securities in an aggregate
liquidation amount equal to 3% of the total capital of NWPS Capital. NWPS
Capital exists for the exclusive purposes of (i) issuing the Trust Securities
representing undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds of the Trust Securities in the Subordinated Debt
Securities and (iii) engaging in only those other activities necessary or
incidental thereto.
Pursuant to the Declaration, the number of NWPS Trustees will initially be
three. Two of the NWPS Trustees (the "Regular Trustees") will be persons who are
employees or officers of or who are affiliated with the Company. The third
trustee will be a financial institution that maintains its principal place of
business in the State of Delaware and is unaffiliated with the Company, which
trustee will serve as property trustee under the Declaration and as indenture
trustee for the purposes of the Trust Indenture Act (the "Property Trustee").
Initially, Wilmington Trust Company, a Delaware banking corporation, will be the
Property Trustee unless removed or replaced by the holder of the Common
Securities. Wilmington Trust Company will also act as indenture trustee under
the Guarantee (the "Guarantee Trustee"). See "Description of the Guarantees" in
the accompanying Prospectus. In certain circumstances, the holders of a majority
in aggregate liquidation amount of the Preferred Securities will be entitled to
appoint one Regular Trustee (a "Special Regular Trustee"), who need not be an
officer or employee of or otherwise affiliated with the Company. See
"Description of the Preferred Securities -- Voting Rights."
The Property Trustee will hold title to the Subordinated Debt Securities for
the benefit of the holders of the Trust Securities, and the Property Trustee
will have the power to exercise all rights,
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powers, and privileges under the Indenture (as defined herein) as the holder of
the Subordinated Debt Securities. In addition, the Property Trustee will
maintain exclusive control of a segregated non-interest bearing bank account
(the "Property Account") to hold all payments made in respect of the
Subordinated Debt Securities for the benefit of the holders of the Trust
Securities. The Property Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Property Account. The Guarantee Trustee will
hold the Guarantee for the benefit of the holders of the Preferred Securities.
Subject to the right of the holders of the Preferred Securities to appoint a
Special Regular Trustee, the Company, as the direct or indirect holder of all
the Common Securities, will have the right to appoint, remove or replace any
NWPS Trustee and to increase or decrease the number of NWPS Trustees; provided
that, (i) the number of NWPS Trustees shall be at least three and (ii) a
majority shall be Regular Trustees. The Company will pay all fees and expenses
related to NWPS Capital and the offering of the Trust Securities. See
"Description of the Subordinated Debt Securities -- Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act (the "Business Trust Act") and the
Trust Indenture Act. See "Description of the Preferred Securities."
USE OF PROCEEDS
The net proceeds from the sale of approximately 1,000,000 Preferred
Securities (approximately $24,212,000) will be applied to fund the acquisition
of Synergy, including certain transaction expenses. The additional net proceeds
from the sale of the Preferred Securities will be applied to repay short-term
debt of the Company. See "Use of Proceeds" in the accompanying Prospectus.
ACCOUNTING TREATMENT
The financial statements of NWPS Capital will be reflected in the Company's
consolidated financial statements with the Preferred Securities shown as
Company-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary
Trust. All of the assets of NWPS Capital will be approximately $31 million of
Subordinated Debt Securities of the Company which will bear interest at a rate
of % per annum, assuming the issuance of 1.2 million Preferred Securities.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee, the Wilmington Trust Company, will act as
the indenture trustee for purposes of compliance with the provisions of the
Trust Indenture Act. The terms of the Preferred Securities will include those
stated in the Declaration, the Business Trust Act and those made part of the
Declaration by the Trust Indenture Act. The following summary of the principal
terms and provisions of the Preferred Securities does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the
Declaration, a copy of which is filed as an exhibit to the Registration
Statement of which this Prospectus Supplement is a part, the Business Trust Act
and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of NWPS
Capital the Trust Securities, which represent undivided beneficial interests in
the assets of NWPS Capital. All of the Common Securities will be owned, directly
or indirectly, by the Company. The Common Securities rank pari passu, and
payments will be made thereon on a pro rata basis, with the Preferred
Securities, except that upon the occurrence of a Declaration Event of Default,
the rights of the holders of the Common Securities to receive payment of
periodic distributions and payments upon liquidation, redemption and otherwise
will be subordinated to the rights of the holders of the Preferred Securities.
The Declaration does not permit the issuance by NWPS Capital of any securities
other than the Trust Securities or the incurrence of any indebtedness by NWPS
Capital. Pursuant to the Declaration, the
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Property Trustee will own the Subordinated Debt Securities purchased by NWPS
Capital for the benefit of the holders of the Trust Securities. The payment of
distributions out of money held by NWPS Capital, and payments upon redemption of
the Preferred Securities or liquidation of NWPS Capital, are guaranteed by the
Company to the extent described under "Description of the Guarantees" in the
accompanying Prospectus. The Guarantee will be held by Wilmington Trust Company,
the Guarantee Trustee, for the benefit of the holders of the Preferred
Securities. The Guarantee does not cover payment of distributions when NWPS
Capital does not have sufficient available funds to pay such distributions. In
such event, the remedy of a holder of Preferred Securities is to vote to appoint
a Special Regular Trustee and to direct the Property Trustee to enforce the
Property Trustee's rights under the Subordinated Debt Securities. See
"Description of the Preferred Securities -- Voting Rights."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of % of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will bear interest thereon at
the rate per annum of % thereof, compounded quarterly. The term "distribution"
as used herein includes any such interest payable unless otherwise stated. The
amount of distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months.
Distributions on the Preferred Securities will be cumulative, will accrue
from , 1995, 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 , 1995, when, as and if available and determined to
be so payable by the Property Trustee, except as otherwise described below.
The Company has the right under the Indenture to defer payments of interest
on the Subordinated Debt Securities by extending the interest payment period
from time to time on the Subordinated Debt Securities, which right, if
exercised, would defer quarterly distributions on the Preferred Securities (but
such distributions would continue to accrue with interest since interest would
continue to accrue on the Subordinated Debt Securities) during any such
Extension Period. Such right to extend the interest payment period for the
Subordinated Debt Securities is limited to a period not exceeding 20 consecutive
quarters. In the event that the Company exercises this right, then during such
Extension Period (a) the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock and (b) the
Company shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by the Company that
rank pari passu with or junior to such Subordinated Debt Securities; provided,
however, that, the foregoing restriction (a) does not apply to any stock
dividends paid by the Company where the dividend stock is the same stock as that
on which the dividend is being paid. Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period;
provided that, such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the maturity of the Subordinated Debt Securities. Upon the termination of
any Extension Period and the payment of all amounts then due, the Company may
select a new Extension Period, subject to the above requirements. See
"Description of the Subordinated Debt Securities -- Interest" and "-- Option to
Extend Interest Payment Period." If distributions are deferred, the deferred
distributions and accrued interest thereon shall be paid to holders of record of
the Preferred Securities as they appear on the books and records of NWPS Capital
on the record date next following the termination of such deferral period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that NWPS Capital has funds legally available for the payment of
such distributions in the Property Account. NWPS Capital's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from the Company on the Subordinated Debt Securities. See
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"Description of the Subordinated Debt Securities." The payment of distributions
out of moneys held by NWPS Capital is guaranteed by the Company to the extent
set forth under "Description of the Guarantees" in the accompanying Prospectus.
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the books and records of NWPS Capital on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
only form, will be one Business Day prior to the relevant payment dates. Such
distributions will be paid through the Property Trustee who will hold amounts
received in respect of the Subordinated Debt Securities in the Property Account
for the benefit of the holders of the Trust Securities. Subject to any
applicable laws and regulations and the provisions of the Declaration, each such
payment will be made as described under "Book-Entry Only Issuance -- The
Depository Trust Company" below. In the event that the Preferred Securities do
not continue to remain in book-entry only form, the Regular Trustees shall have
the right to select relevant record dates, which shall be more than one Business
Day prior to the relevant payment dates. In the event that any date on which
distributions are to be made on the Preferred Securities is not a Business Day,
then payment of the distributions payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such payment date. A "Business Day" shall mean any day other than Saturday,
Sunday or any other day on which banking institutions in the City of New York
(in the state of New York) are permitted or required by any applicable law to
close.
MANDATORY REDEMPTION
The Subordinated Debt Securities will mature on , 2025, unless the
maturity date is extended at the option of the Company (provided certain
conditions are met), and may be redeemed, in whole or in part, at any time on or
after , 2000, or at any time in certain circumstances upon the
occurrence of a Tax Event. Upon the repayment of the Subordinated Debt
Securities, whether at maturity or upon redemption, the proceeds from such
repayment or payment shall simultaneously be applied to redeem Trust Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Subordinated Debt Securities so repaid or redeemed at the Redemption
Price; provided that, holders of Trust Securities shall be given not less than
30 nor more than 60 days notice of such redemption. See "Description of the
Subordinated Debt Securities -- Optional Redemption." In the event that fewer
than all of the outstanding Preferred Securities are to be redeemed, the
Preferred Securities will be redeemed pro rata as described under "Book-Entry
Only Issuance -- the Depository Trust Company" below.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
"Tax Event" means that the Regular Trustees shall have received an opinion
of nationally recognized independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that, as a result of (a) 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, (b) any amendment to or change in an
interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority (including the
enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the date of the issuance of the Preferred
Securities), (c) any interpretation or pronouncement that provides for a
position with respect to such laws or regulations that differs from the
theretofore generally accepted position, or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated or effective, or which interpretation or pronouncement is
issued or announced, or which action is taken, in each case on or after the date
of the issuance of the Preferred Securities, there is more than an insubstantial
risk that (i) NWPS Capital is, or will be within 90 days after the date thereof,
subject to United States federal income tax with respect to income accrued or
received on the Subordinated Debt Securities, (ii) interest payable to NWPS
Capital on the Subordinated Debt Securities is not, or will
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not be within 90 days after the date thereof, in whole or in part, deductible by
the Company for United States federal income tax purposes or (iii) NWPS 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 that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act of 1940, as amended (the "1940 Act"),
that as a result of the occurrence of a change in law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), the Trust is or will be considered an "investment company"
which is required to be registered under the 1940 Act, which Change in 1940 Act
Law becomes effective on or after the date of the issuance of the Preferred
Securities. In case of any uncertainty regarding an Investment Company Event,
the good faith determination of the Regular Trustees, based on the advice of
counsel, shall be conclusive.
If, at any time, a Tax Event or an Investment Company Event (each, a
"Special Event") shall occur and be continuing, NWPS Capital shall, except in
the limited circumstances described below, be dissolved with the result that,
after satisfaction of liabilities to creditors of the Trust, Subordinated Debt
Securities with an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the distribution rate
of, and accrued and unpaid interest equal to accrued and unpaid distributions
on, the Trust Securities, would be distributed to the holders of the Trust
Securities in liquidation of such holders' interests in NWPS Capital on a pro
rata basis within 90 days following the occurrence of such Special Event;
provided, however, that in the case of the occurrence of a Tax Event, such
dissolution and distribution shall be conditioned on the Regular Trustees'
receipt of an opinion of nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the holders of the Trust Securities will not recognize any gain or loss for
United States federal income tax purposes as a result of such dissolution and
distribution of Subordinated Debt Securities; and provided, further, that, if at
the time there is available to NWPS Capital the opportunity to eliminate, within
such 90-day period, the Special Event by taking some ministerial action, such as
filing a form or making an election or pursuing some other reasonable measure
that will have no adverse effect on NWPS Capital, the Company or the holders of
the Trust Securities, NWPS Capital will pursue such measure in lieu of
dissolution. Furthermore, if in the case of the occurrence of a Tax Event, after
receipt of a Dissolution Tax Opinion by the Regular Trustees (i) the Company has
received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Company would be
precluded from deducting the interest on the Subordinated Debt Securities for
United States federal income tax purposes even if the Subordinated Debt
Securities were distributed to the holders of Trust Securities in liquidation of
such holders' interests in NWPS Capital as described above, or (ii) the Regular
Trustees shall have been informed by such tax counsel that it cannot deliver a
No Recognition Opinion to NWPS Capital, the Company shall have the right, upon
not less than 30 nor more than 60 days notice, to redeem the Subordinated Debt
Securities, in whole or in part, for cash within 90 days following the
occurrence of such Tax Event, and, following such redemption, Trust Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Subordinated Debt Securities so redeemed shall be redeemed by NWPS Capital
at the Redemption Price on a pro rata basis; provided, however, that, if at the
time there is available to the Company or NWPS Capital the opportunity to
eliminate, within such 90-day period, the Tax Event by taking some ministerial
action, such as filing a form or making an election or pursuing some other
similar reasonable measure which has no adverse effect on NWPS Capital, the
Company or the holders of the Trust Securities, the Company or NWPS Capital will
pursue such measure in lieu of redemption.
If the Subordinated Debt Securities are distributed to the holders of the
Preferred Securities, the Company will use its best efforts to cause the
Subordinated Debt Securities to be listed on the New York Stock Exchange or on
such other exchange as the Preferred Securities are then listed.
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After the date for any distribution of Subordinated Debt Securities upon
dissolution of NWPS Capital, (i) the Preferred Securities will no longer be
deemed to be outstanding, (ii) the Depositary or its nominee, as the record
holder of the Preferred Securities, will receive a registered global certificate
or certificates representing the Subordinated Debt Securities to be delivered
upon such distribution, and (iii) any certificates representing Preferred
Securities not held by the Depositary or its nominee will be deemed to represent
Subordinated Debt Securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on such Preferred Securities until such certificates are
presented to the Company or its agent for transfer or reissuance.
There can be no assurance as to the market prices for either the Preferred
Securities or the Subordinated Debt Securities that may be distributed in
exchange for the Preferred Securities if a dissolution and liquidation of NWPS
Capital were to occur. Accordingly, the Preferred Securities that an investor
may purchase, whether pursuant to the offer made hereby or in the secondary
market, or the Subordinated Debt Securities that an investor may receive if a
dissolution and liquidation of NWPS Capital were to occur, may trade at a
discount to the price that the investor paid to purchase the Preferred
Securities offered hereby.
REDEMPTION PROCEDURES
NWPS Capital may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If NWPS Capital gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable), then, by 12:00 noon, New York
City time, on the redemption date, and if the Company has paid to the Property
Trustee a sufficient amount of cash in connection with the related redemption or
maturity of the Subordinated Debt Securities, then NWPS Capital will irrevocably
deposit with the Depositary funds sufficient to pay the applicable Redemption
Price and will give the Depositary irrevocable instructions and authority to pay
the Redemption Price to the holders of the Preferred Securities. See "Book-Entry
Only Issuance -- The Depository Trust Company." If notice of redemption shall
have been given and funds deposited as required, then, immediately prior to the
close of business on the date of such deposit, distributions will cease to
accrue and all rights of holders of such Preferred Securities so called for
redemption will cease, except the right of the holders of such Preferred
Securities to receive the Redemption Price but without interest on such
Redemption Price. In the event that any date fixed for redemption of Preferred
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is a Business Day
(without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of Preferred Securities is improperly withheld or
refused and not paid either by NWPS 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, in which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities are
to be redeemed, the Preferred Securities will be redeemed pro rata as described
below under "Book-Entry Only Issuance -- The Depository Trust Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), the Company or its subsidiaries may at
any time, and from time to time, purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
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LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of NWPS Capital (each a "Liquidation"), the then
holders of the Preferred Securities will be entitled to receive out of the
assets of NWPS Capital, after satisfaction of liabilities to creditors of the
Trust, distributions in an amount equal to the aggregate of the stated
liquidation amount of $25 per Preferred Security plus accrued and unpaid
distributions thereon to the date of payment (the "Liquidation Distribution"),
unless, in connection with such Liquidation, Subordinated Debt Securities in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accrued and unpaid distributions on, the
Preferred Securities have been distributed on a pro rata basis to the holders of
the Preferred Securities in exchange for such Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid only
in part because NWPS Capital has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by
NWPS Capital on the Preferred Securities shall be paid on a pro rata basis. The
holders of the Common Securities will be entitled to receive distributions upon
any such dissolution pro rata with the holders of the Preferred Securities,
except that if a Declaration Event of Default has occurred and is continuing,
the Preferred Securities shall have a preference over the Common Securities with
regard to such distributions.
Pursuant to the Declaration, NWPS Capital shall terminate (i) on ,
2050, the expiration of the term of NWPS Capital, (ii) upon the bankruptcy of
the Company or the holder of the Common Securities, (iii) upon the filing of a
certificate of dissolution or its equivalent with respect to the holder of the
Common Securities or the Company, the filing of a certificate of cancellation
with respect to NWPS Capital, or the revocation of the charter of the holder of
the Common Securities or the Company and the expiration of 90 days after the
date of revocation without a reinstatement thereof, (iv) upon the distribution
of Subordinated Debt Securities upon the occurrence of a Special Event, (v) upon
the entry of a decree of a judicial dissolution of the holder of the Common
Securities, the Company or NWPS Capital, or (vi) upon the redemption of all the
Trust Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"), provided that, pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived, or
otherwise eliminated, the Property Trustee will be deemed to be acting 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 with
respect to certain matters under the Declaration, and therefore the Indenture.
Upon the occurrence of a Declaration Event of Default, the Property Trustee
as the sole holder of the Subordinated Debt Securities will have the right under
the Indenture to declare the principal of and interest on the Subordinated Debt
Securities to be immediately due and payable. The Company and NWPS Capital are
each required to file annually with the Property Trustee an officer's
certificate as to its compliance with all conditions and covenants under the
Declaration.
VOTING RIGHTS
Except as described herein, under the Business Trust Act, the Trust
Indenture Act and under "Description of the Guarantees -- Amendments and
Assignment" in the accompanying Prospectus, and as otherwise required by law and
the Declaration, the holders of the Preferred Securities will have no voting
rights.
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If (i) NWPS Capital fails to pay distributions in full on the Preferred
Securities for six (6) consecutive quarterly distribution periods or (ii) a
Declaration Event of Default occurs and is continuing (each an "Appointment
Event"), then the holders of the Preferred Securities, acting as a single class,
will be entitled by a vote of a majority in liquidation amount of the Preferred
Securities to appoint a Special Regular Trustee. If the Company exercises its
right to defer payments of interest on the Subordinated Debt Securities (See
"Option to Extend Interest Payment Period" below), appointment of a Special
Regular Trustee would be the only right of the holders of the Preferred
Securities if NWPS Capital fails to pay distributions in full on the Preferred
Securities for six consecutive quarters until expiration of the extended
interest payment period (20 consecutive quarters). For purposes of determining
whether NWPS Capital has failed to pay distributions in full for six (6)
consecutive quarterly distribution periods, distributions shall be deemed to
remain in arrears, notwithstanding any payments in respect thereof, until full
cumulative distributions have been or contemporaneously are paid with respect to
all quarterly distribution periods terminating on or prior to the date of
payment of such cumulative distributions. Any holder of Preferred Securities
(other than the Company or any of its affiliates) shall be entitled to nominate
any person to be appointed as Special Regular Trustee. Not later than 30 days
after such right to appoint a Special Regular Trustee arises, the Regular
Trustees shall convene a meeting of the holders of Preferred Securities for the
purpose of appointing a Special Regular Trustee. If the Regular Trustees fail to
convene such meeting within such 30-day period, the holders of not less than 10%
of the aggregate stated liquidation amount of the Preferred Securities will be
entitled to convene such meeting. The provisions of the Declaration relating to
the convening and conduct of the meetings of the holders will apply with respect
to any such meeting. Any Special Regular Trustee so appointed shall cease to be
a Special Regular Trustee if the Appointment Event pursuant to which the Special
Regular Trustee was appointed and all other Appointment Events cease to be
continuing. Notwithstanding the appointment of any such Special Regular Trustee,
the Company shall retain all rights under the Indenture, including the right to
defer payments of interest by extending the interest payment period as provided
under "Description of the Subordinated Debt Securities -- Option to Extend
Interest Payment Period." If such an extension occurs, there will be no
Indenture Event of Default and, consequently, no Declaration Event of Default
for failure to make any scheduled interest payment during the Extension Period
on the date originally scheduled.
Subject to the requirement of the Property Trustee obtaining a tax opinion
in certain circumstances set forth in the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee, or direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration including the right to direct the Property Trustee, as holder of the
Subordinated Debt Securities, to exercise the remedies available under the
Indenture with respect to the Subordinated Debt Securities, (ii) waive any past
Indenture Event of Default that is waivable under Section 513 of the Base
Indenture (as defined herein), or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Subordinated Debt Securities shall be
due and payable; provided, however, that, where a consent under the Indenture
would require the consent of all holders of the Subordinated Debt Securities, no
such consent shall be given by the Property Trustee without the prior direction
of all holders of the Preferred Securities. If the Property Trustee fails to
enforce its rights under the Subordinated Debt Securities, to the fullest extent
permitted by law, a record holder of Preferred Securities may, after such
holder's written request to the Property Trustee to enforce such rights,
institute a legal proceeding directly against the Company to enforce the
Property Trustee's rights under the Subordinated Debt Securities without first
instituting any legal proceeding against the Property Trustee or any other
person or entity. The Property Trustee shall notify all holders of the Preferred
Securities of any notice of default received from the Indenture Trustee with
respect to the Subordinated Debt Securities. Such notice shall state that such
Indenture Event of Default also constitutes a Declaration Event of Default.
Except with respect to directing the time, method and place of conducting a
proceeding for a remedy, the Property Trustee shall not take any of the actions
described in clauses (i), (ii) or (iii)
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above unless the Property Trustee has obtained an opinion of tax counsel to the
effect that, as a result of such action, NWPS Capital will not fail to be
classified as a grantor trust for United States federal income tax purposes.
In the event the consent of the Property Trustee, as the holder of the
Subordinated Debt Securities, is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the Subordinated
Debt Securities, the Property Trustee shall request the direction of the holders
of the Trust Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a majority in liquidation amount of the Trust
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of all holders of the
Subordinated Debt Securities, the Property Trustee may only give such consent at
the direction of all holders of the Trust Securities. The Property Trustee shall
be under no obligation to take any such action in accordance with the directions
of the holders of the Trust Securities unless the Property Trustee has obtained
an opinion of tax counsel to the effect that for the purposes of United States
federal income tax NWPS Capital will not be classified as other than a grantor
trust.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may be
given at a separate meeting of holders of Preferred Securities convened for such
purpose, at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Preferred Securities will be required for NWPS Capital to
redeem and cancel Preferred Securities or distribute Subordinated Debt
Securities in accordance with the Declaration.
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 at such time by the Company or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the Company, shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if such Preferred Securities
were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "-- Book-Entry Only Issuance -- The
Depository Trust Company" below.
Except in the limited circumstances described above, in connection with the
appointment of a Special Regular Trustee, holders of the Preferred Securities
will have no rights to appoint or remove the NWPS Trustees, who may be
appointed, removed or replaced solely by the Company as the indirect or direct
holder of all of the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by a majority of the
Regular Trustees (and in certain circumstances the Property Trustee), provided
that, if any proposed amendment provides for, or the Regular Trustees otherwise
propose to effect, (i) any action that would materially adversely affect the
powers, preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the dissolution, winding-up
or termination of NWPS Capital other than pursuant to the terms of the
Declaration, then the holders of the Trust Securities voting together as a
single class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of at
least 66 2/3% in
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liquidation amount of the Trust Securities affected thereby; provided that, the
rights of holders of Preferred Securities to appoint a Special Regular Trustee
shall not be amended without the consent of each holder of Preferred Securities;
provided further that, if any amendment or proposal referred to in clause (i)
above would materially adversely affect only the Preferred Securities or the
Common Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of 66 2/3% in liquidation amount of such class of
Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause NWPS Capital
to be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) affect the powers, rights, duties, obligations or
immunities of the Property Trustee or the Delaware Trustee (unless such
amendment is consented to by the Property Trustee or the Delaware Trustee, as
the case may be), or (iii) cause NWPS Capital to be deemed an "investment
company" which is required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
NWPS Capital may not consolidate, amalgamate, merge or be replaced by, or
convey, transfer or lease its properties and assets substantially as an
entirety, to any corporation or other body, except as described below. NWPS
Capital may, with the consent of a majority of the Regular Trustees and without
the consent of the holders of the Trust Securities, the Delaware Trustee or the
Property Trustee, consolidate, amalgamate, merge with or into, or be replaced by
a trust organized as such under the laws of any State, provided that (i) such
successor entity either (x) expressly assumes all of the obligations of NWPS
Capital under the Trust Securities or (y) substitutes for the Preferred
Securities other securities (the "Successor Securities"), so long as the
Successor Securities rank the same as the Trust Securities rank with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii) the
Company expressly acknowledges a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the Subordinated
Debt Securities, (iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with another organization on
which the Preferred Securities are then listed or quoted, (iv) such merger,
consolidation, amalgamation or replacement does not cause the Preferred
Securities or any Successor Securities to be downgraded by any nationally
recognized statistical rating organization, (v) such merger, consolidation,
amalgamation or replacement does not adversely affect the rights, preferences
and privileges of the holders of the Trust Securities or any Successor
Securities in any material respect under the documents governing the Trust
Securities or the Successor Securities (other than with respect to any dilution
of the holders' interest in the new entity), (vi) such successor entity has a
purpose substantially identical to that of NWPS Capital, (vii) prior to such
merger, consolidation, amalgamation or replacement, the Company has received an
opinion of a nationally recognized independent counsel to NWPS Capital
experienced in such matters to the effect that, (A) such merger, consolidation,
amalgamation or replacement does not adversely affect the rights, preferences
and privileges of the holders of the Trust Securities or any Successor
Securities in any material respect under the documents governing the Trust
Securities or the Successor Securities (other than with respect to any dilution
of the holders' interest in the new entity), and (B) following such merger,
consolidation, amalgamation or replacement, neither NWPS Capital nor such
successor entity will be required to register as an investment company under the
1940 Act and (viii) the Company guarantees the obligations of such successor
entity under the Successor Securities at least to the extent provided by the
Guarantee and the Common Securities Guarantee. Notwithstanding the foregoing,
NWPS Capital shall not, except with the consent of holders of 100% in
liquidation amount of the Trust Securities, consolidate, amalgamate, merge with
or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if such
consolidation, amalgamation, merger or replacement would cause NWPS Capital or
the Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
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There are no provisions which afford the holders of the Preferred Securities
protection in the event of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction involving the Company. There are
also no provisions which require the repurchase of the Preferred Securities upon
a change in control of the Company.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary for
the Preferred Securities. The Preferred Securities will be issued only as
fully-registered securities registered in the name of Cede & Co. (DTC's
nominee). One or more fully-registered global Preferred Securities certificates,
representing the total aggregate number of Preferred Securities, will be issued
and will be deposited with DTC or a custodian thereof.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Preferred Securities
as represented by a global certificate.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange 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 New York
Stock Exchange, Inc. (the "New York Stock Exchange"), 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 Participants are on file with the Securities and Exchange 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 ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect 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 Direct or Indirect
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 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.
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Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
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 will reduce the amount of the
interest of each Direct Participant in such Preferred Securities in accordance
with its procedures.
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 NWPS 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 NWPS 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 NWPS 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, NWPS
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 NWPS 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 Direct and Indirect
Participants.
Except as provided herein, a Beneficial Owner in a global Preferred Security
certificate 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
NWPS Capital. Under such circumstances, in the event that a successor securities
depositary is not obtained, Preferred Securities certificates are required to be
printed and delivered. Additionally, the Regular 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. In that event, certificates for the Preferred Securities will 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 NWPS Capital believe to be
reliable, but neither the Company nor NWPS Capital takes responsibility for the
accuracy thereof.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities, undertakes to perform only such duties as are specifically
set forth in the Declaration and, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her own
affairs.
Subject to such provisions, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the request of any
holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be
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incurred thereby. The holders of Preferred Securities will not be required to
offer such indemnity in the event such holders, by exercising their voting
rights, direct the Property Trustee to take any action following a Declaration
Event of Default.
PAYING AGENT
In the event that the Preferred Securities do not remain in book-entry only
form, the following provisions would apply:
The Property Trustee will act as paying agent, and may designate an
additional or substitute paying agent at any time.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of NWPS Capital, but upon payment (with the giving of
such indemnity as NWPS Capital or the Company may require) in respect of any tax
or other government charges that may be imposed in relation to it.
NWPS Capital will not be required to register or cause to be registered the
transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate NWPS Capital in
such a way so that NWPS Capital will not be (i) required to register as an
"investment company" under the 1940 Act or (ii) characterized as other than a
grantor trust for United States federal income tax purposes. The Company is
authorized and directed to conduct its affairs so that the Subordinated Debt
Securities will be treated as indebtedness of the Company for United States
federal income tax purposes. In this connection, the Company and the Regular
Trustees are authorized to take any action, not inconsistent with applicable
law, the certificate of trust of NWPS Capital or the certificate of
incorporation of the Company, that each of the Company and the Regular Trustees
determines in its discretion to be necessary or desirable to achieve such end,
as long as such action does not adversely affect the interests of the holders of
the Preferred Securities or vary the terms thereof.
Holders of the Preferred Securities have no preemptive rights.
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Set forth below is a description of the specific terms of the Subordinated
Debt Securities in which NWPS Capital will invest the proceeds from the issuance
and sale of the Trust Securities. This description supplements the description
of the general terms and provisions of the Subordinated Debt Securities set
forth in the accompanying Prospectus under the caption "Description of the
Subordinated Debt Securities." The following description does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the description in the accompanying Prospectus and the Subordinated Debt
Securities Indenture, dated as of , 1995 (the "Base Indenture")
between the Company and The Chase Manhattan Bank (N.A.), as Trustee (the
"Indenture Trustee"), as supplemented by a First Supplemental Indenture, dated
as of , 1995 (the Base Indenture, as so supplemented, is hereinafter
referred to as the "Indenture"), the forms of which are filed as Exhibits to the
Registration Statement of which this Prospectus Supplement and the accompanying
Prospectus form a part. Certain capitalized terms used herein are defined in the
Indenture.
Under certain circumstances involving the dissolution of NWPS Capital
following the occurrence of a Special Event, Subordinated Debt Securities may be
distributed to the holders of the Trust Securities in liquidation of NWPS
Capital. See "Description of the Preferred Securities -- Special Event
Redemption or Distribution."
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If the Subordinated Debt Securities are distributed to the holders of the
Preferred Securities, the Company will use its best efforts to have the
Subordinated Debt Securities listed on the New York Stock Exchange or on such
other national securities exchange or similar organization on which the
Preferred Securities are then listed or quoted.
GENERAL
The Subordinated Debt Securities will be issued as unsecured debt under the
Indenture. The Subordinated Debt Securities will be limited in aggregate
principal amount to approximately $31 million, such amount being the sum of the
aggregate stated liquidation amount of the Preferred Securities and the capital
contributed by the Company in exchange for the Common Securities (the "Company
Payment").
The Subordinated Debt Securities are not subject to a sinking fund
provision. The entire principal amount of the Subordinated Debt Securities will
mature and become due and payable, together with any accrued and unpaid interest
thereon including Compound Interest (as hereinafter defined) and Additional
Interest (as hereinafter defined), if any, on , 2025 subject to the
election of the Company to extend the scheduled maturity date of the
Subordinated Debt Securities to a date not later than , 2044 which
election is subject to the Company's satisfying certain conditions. See " --
Option to Extend Maturity."
If Subordinated Debt Securities are distributed to holders of Preferred
Securities in liquidation of such holders' interests in NWPS Capital, such
Subordinated Debt Securities will initially be issued as a Global Security. As
described herein, under certain limited circumstances, Subordinated Debt
Securities may be issued in certificated form in exchange for a Global Security
(as defined below). See "Book-Entry and Settlement" below. In the event that
Subordinated Debt Securities are issued in certificated form, such Subordinated
Debt Securities will be in denominations of $25 and integral multiples thereof
and may be transferred or exchanged at the offices described below. Payments on
Subordinated Debt Securities issued as a Global Security will be made to DTC, a
successor depositary or, in the event that no depositary is used, to a Paying
Agent for the Subordinated Debt Securities. In the event Subordinated Debt
Securities are issued in certificated form, principal and interest will be
payable, the transfer of the Subordinated Debt Securities will be registrable
and Subordinated Debt Securities will be exchangeable for Subordinated Debt
Securities of other denominations of a like aggregate principal amount at the
corporate trust office of the Indenture Trustee in Brooklyn, 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.
SUBORDINATION
The Indenture provides that the Subordinated Debt Securities are
subordinated and junior in right of payment to all Senior Indebtedness of the
Company. No payment of principal (including redemption and sinking fund
payments), premium, if any, or interest on the Subordinated Debt Securities may
be made (i) if any Senior Indebtedness of the Company is not paid when due, (ii)
any applicable grace period with respect to such default has ended and such
default has not been cured or waived or ceased to exist, or (iii) if the
maturity of any Senior Indebtedness of the Company has been accelerated because
of a default. 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, premium, if any, and interest due or to become due on all Senior
Indebtedness of the Company must be paid in full before the holders of
Subordinated Debt Securities are entitled to receive or retain any payment. Upon
satisfaction of all claims of all Senior Indebtedness then outstanding, the
rights of the holders of the Subordinated Debt Securities will be subrogated to
the rights of the holders of Senior Indebtedness of the Company to receive
payments or distributions applicable to Senior Indebtedness until all amounts
owing on the Subordinated Debt Securities are paid in full.
The term "Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and
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(B) indebtedness evidenced by securities, debentures, bonds or other similar
instruments issued by such obligor including, without limitation, in the case of
the Company, all obligations under its New Mortgage and 1940 Indenture (each as
defined in the accompanying Prospectus), (ii) all capital lease obligations of
such obligor, (iii) all obligations of such obligor issued or assumed as the
deferred purchase price of property, all conditional sale obligations of such
obligor and all obligations of such obligor under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business), (iv) all obligations of such obligor for the reimbursement on any
letter of credit, banker's acceptance, security purchase facility or similar
credit transaction, (v) all obligations of the type referred to in clauses (i)
through (iv) above of other persons for the payment of which such obligor is
responsible or liable as obligor, guarantor or otherwise, and (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
persons secured by any lien on any property or asset of such obligor (whether or
not such obligation is assumed by such obligor), except for (1) any such
indebtedness that is by its terms subordinated to or pari passu with the
Subordinated Debt Securities and (2) any indebtedness between or among such
obligor or its affiliates, including all other debt securities and guarantees in
respect of those debt securities issued, to (a) any other NWPS Trust (as defined
in the accompanying Prospectus), or a trustee of such trust, and (b) any other
trust, or a trustee of such trust, partnership or other entity affiliated with
the Company that is a financing vehicle of the Company (a "financing entity") in
connection with the issuance by such financing entity of Preferred Securities or
other securities that rank pari passu with, or junior to, the Preferred
Securities. Such Senior Indebtedness shall continue to be Senior Indebtedness
and be entitled to the benefits of the subordination provisions irrespective of
any amendment, modification or waiver of any term of such Senior Indebtedness.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by the Company. As of March 31, 1995, Senior Indebtedness of
the Company aggregated approximately $124 million.
OPTIONAL REDEMPTION
The Company shall have the right to redeem the Subordinated Debt Securities,
in whole or in part, from time to time, on or after , 2000, or at any
time in certain circumstances upon the occurrence of a Tax Event as described
under "Description of the Preferred Securities -- Special Event Redemption or
Distribution," upon not less than 30 nor more than 60 days notice, at a
redemption price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest, including Additional Interest, if any, to the
redemption date. If a partial redemption of the Preferred Securities resulting
from a partial redemption of the Subordinated Debt Securities would result in
the delisting of the Preferred Securities, the Company may only redeem the
Subordinated Debt Securities in whole.
INTEREST
Each Subordinated Debt Security shall bear interest at the rate of % per
annum (the "Coupon Rate") from the original date of issuance until the principal
becomes due and payable, and on any overdue principal and on any overdue
installment of interest at the Coupon Rate, compounded quarterly, payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year (each, an "Interest Payment Date"), commencing , 1995, to the
person in whose name such Subordinated Debt Security is registered, at the close
of business on the Business Day next preceding such Interest Payment Date. In
the event the Subordinated Debt Securities shall not continue to remain in
book-entry only form, the Company shall have the right to select record dates,
which shall be any date at least one Business Day prior to the Interest Payment
Date. It is anticipated that NWPS Capital will be the sole holder of the
Subordinated Debt Securities.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full quarterly period for which interest is computed
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on the
Subordinated
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Debt Securities is not a Business Day, then payment of the interest payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, then 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.
OPTION TO EXTEND MATURITY DATE
The maturity date of the Subordinated Debt Securities is , 2025
(the "Scheduled Maturity Date"). The Company, however, may, before the Scheduled
Maturity Date, extend such maturity date no more than one time for up to an
additional 19 years from the Scheduled Maturity Date; provided that (a) the
Company is not in bankruptcy or otherwise insolvent, (b) the Company is not in
default on any Subordinated Debt Securities issued to a NWPS Trust or to any
trustee of such trust in connection with an issuance of Trust Securities by such
NWPS Trust, (c) the Company has made timely payments on the Subordinated Debt
Securities for the immediately preceding six quarters without deferrals, (d)
NWPS Capital is not in arrears on payments of distributions on the Preferred
Securities, (e) the Subordinated Debt Securities are rated Investment Grade by
any one of Standard & Poor's Rating Group, Moody's Investors Service, Inc.,
Fitch Investor Services, Duff & Phelps Credit Rating Company or any other
nationally recognized statistical rating organization, and (g) the final
maturity of such Subordinated Debt Securities is not later than the 49th
anniversary of the issuance of the Preferred Securities. Pursuant to the
Declaration, the Regular Trustees are required to give notice of the Company's
election to extend the Scheduled Maturity Date to the holders of the Preferred
Securities.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If (i) NWPS Capital fails to pay distributions in full on the Preferred
Securities for six consecutive quarterly distribution periods or (ii) a
Declaration Event of Default (as defined herein) occurs and is continuing, then
the holders of Preferred Securities would be entitled, by majority vote, to
appoint a Special Regular Trustee, who shall have the same rights, powers and
privileges as the other Regular Trustees. In addition, the holders of a majority
in aggregate liquidation amount of the Preferred Securities will have the right
to: (i) direct the time, method, and place of conducting any proceeding for any
remedy available to the Property Trustee or to direct the exercise of any trust
or power conferred upon the Property Trustee under the Declaration; (ii) waive
any past default; or (iii) exercise any right to rescind or annul a declaration
that the principal of all the Subordinated Debt Securities shall be due and
payable; provided, however, that where a consent under the Indenture requires
the consent of all holders of the Subordinated Debt Securities affected thereby,
the Property Trustee may only give such consent at the direction of all holders
of the Preferred Securities. If the Property Trustee fails to enforce its rights
under the Subordinated Debt Securities, to the fullest extent permitted by law,
a holder of Preferred Securities may, after such holder's written request to the
Property Trustee to enforce such rights, institute a legal proceeding directly
against the Company to enforce the Property Trustee's rights under the
Subordinated Debt Securities without first instituting any legal proceeding
against the Property Trustee or any other person or entity. If the Company
exercises its right to defer payments of interest on the Subordinated Debt
Securities (See "Option to Extend Interest Payment Period" below) appointment of
a Special Regular Trustee would be the only right of the holders of the
Preferred Securities if NWPS Capital fails to pay distributions in full on the
Preferred Securities for six consecutive quarters until expiration of the
extended interest payment period (20 consecutive quarters).
OPTION TO EXTEND INTEREST PAYMENT PERIOD
The Company shall have the right at any time, and from time to time, during
the term of the Subordinated Debt Securities to defer payments of interest by
extending the interest payment period for a period not exceeding 20 consecutive
quarters, at the end of which Extension Period, the Company shall pay all
interest then accrued and unpaid (including any Additional Interest, as herein
defined) together with interest thereon compounded quarterly at the rate
specified for the Subordinated Debt Securities to the extent permitted by
applicable law ("Compound Interest"); provided that, during
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any such Extension Period, (a) the Company shall not declare or pay any
dividends on, make any distribution with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
and (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company that rank pari passu with or junior to the Subordinated Debt
Securities; provided, however, that, the foregoing restriction (a) does not
apply to any stock dividends paid by the Company where the dividend stock is the
same as that on which the dividend is paid.
Prior to the termination of any such Extension Period, the Company may
further defer payments of interest by extending the interest payment period;
provided, however, that, such Extension Period, including all such previous and
further extensions, may not exceed 20 consecutive quarters. Upon the termination
of any Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the terms set forth in this section.
No interest during an Extension Period, except at the end thereof, shall be due
and payable. The Company has no present intention of exercising its right to
defer payments of interest by extending the interest payment period on the
Subordinated Debt Securities. If the Property Trustee shall be the sole holder
of the Subordinated Debt Securities, the Company shall give the Regular Trustees
and the Property Trustee notice of its selection of such Extension Period one
Business Day prior to the earlier of (i) the date distributions on the Preferred
Securities are payable or (ii) the date the Regular Trustees are 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 is payable. The Regular Trustees shall give notice of
the Company's selection of such Extension Period to the holders of the Preferred
Securities. If the Property Trustee shall not be the sole holder of the
Subordinated Debt Securities, the Company shall give the holders of the
Subordinated Debt Securities notice of its selection of such Extension Period
ten Business Days prior to the earlier of (i) the Interest Payment Date or (ii)
the date upon which the Company is required to give notice to the New York Stock
Exchange (or other applicable self-regulatory organization) or to holders of the
Subordinated Debt Securities of the record or payment date of such related
interest payment.
ADDITIONAL INTEREST
If at any time while the Property Trustee is the holder of the Subordinated
Debt Securities, NWPS Capital shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, the Company will pay as additional interest ("Additional Interest")
on the Subordinated Debt Securities such additional amounts as shall be required
so that the net amounts received and retained by NWPS Capital after paying any
such taxes, duties, assessments or other governmental charges will be not less
than the amounts NWPS Capital would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
INDENTURE EVENTS OF DEFAULT
If any Indenture Event of Default shall occur and be continuing, the
Property Trustee, as the holder of the Subordinated Debt Securities, will have
the right to declare the principal of and the interest on the Subordinated Debt
Securities (including any Compound Interest and Additional Interest, if any) and
any other amounts payable under the Indenture to be forthwith due and payable
and to enforce its other rights as a creditor with respect to the Subordinated
Debt Securities. See "Description of the Subordinated Debt Securities -- Events
of Default" in the accompanying Prospectus for a description of the Events of
Default. An Indenture Event of Default also constitutes a Declaration Event of
Default. The holders of Preferred Securities in certain circumstances have the
right to direct the Property Trustee to exercise its rights as the holder of the
Subordinated Debt Securities. See "Description of the Preferred Securities --
Declaration Events of Default" and "Voting Rights."
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of NWPS Capital
as a result of the occurrence of a Special
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Event, the Subordinated Debt Securities will be issued in the form of one or
more global certificates (each, a "Global Security") registered in the name of
the Depositary or its nominee. Except under the limited circumstances described
below, Subordinated Debt Securities represented by the Global Security will not
be exchangeable for, and will not otherwise be issuable as, Subordinated Debt
Securities in definitive form. The Global Securities described above may not be
transferred except by the depositary to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the depositary
or to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Subordinated Debt
Securities in definitive form and will not be considered the holders (as defined
in the Indenture) thereof for any purpose under the Indenture, and no Global
Security representing Subordinated Debt Securities shall be exchangeable, except
for another Global Security of like denomination and tenor to be registered in
the name of the Depositary or its nominee or to a successor Depositary or its
nominee. Accordingly, each Beneficial Owner must rely on the procedures of the
Depositary or if such person is not a Participant, on the procedures of the
Participant through which such person owns its interest to exercise any rights
of a holder under the Indenture.
THE DEPOSITARY
If Subordinated Debt Securities are distributed to holders of Preferred
Securities in liquidation of such holders' interests in NWPS Capital, DTC will
act as securities depositary for the Subordinated Debt Securities. For a
description of DTC and the specific terms of the depositary arrangements, see
"Description of the Preferred Securities -- Book-Entry Only Issuance -- The
Depository Trust Company." As of the date of this Prospectus Supplement, the
description therein of DTC's book-entry system and DTC's practices as they
relate to purchases, transfers, notices and payments with respect to the
Preferred Securities apply in all material respects to any debt obligations
represented by one or more Global Securities held by DTC. The Company may
appoint a successor to DTC or any successor depositary in the event DTC or such
successor depositary is unable or unwilling to continue as a depository for the
Global Securities.
None of the Company, NWPS Capital, the Indenture Trustee, any paying agent
and any other agent of the Company or the Indenture Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
for such Subordinated Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Subordinated Debt Securities
registered in the names of persons other than the depositary or its nominee only
if (i) the depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such Global Security and no successor depositary
shall have been appointed, (ii) the depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the depositary
is required to be so registered to act as such depositary and no successor
depositary shall have been appointed, (iii) the Company, in its sole discretion,
determines that such Global Security shall be so exchangeable or (iv) there
shall have occurred an Event of Default with respect to such Subordinated Debt
Securities. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Subordinated Debt Securities registered in
such names as the depositary shall direct. It is expected that such instructions
will be based upon directions received by the depositary from its Participants
with respect to ownership of beneficial interests in such Global Security.
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<PAGE>
MISCELLANEOUS
The Indenture will provide that the Company will pay all fees and expenses
related to (i) the offering of the Trust Securities and the Subordinated Debt
Securities, (ii) the organization, maintenance and dissolution of NWPS Capital,
(iii) the retention of the NWPS Trustees and (iv) the enforcement by the
Property Trustee of the rights of the holders of the Preferred Securities. The
payment of such fees and expenses will be fully and unconditionally guaranteed
by the Company.
EFFECT OF OBLIGATIONS UNDER THE
SUBORDINATED DEBT SECURITIES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of NWPS Capital is to
issue the Trust Securities evidencing undivided beneficial interests in the
assets of NWPS Capital, and to invest the proceeds from such issuance and sale
in the Subordinated Debt Securities.
As long as payments of interest and other payments are made when due on the
Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Subordinated Debt Securities will
be equal to the sum of the aggregate stated liquidation amount of the Trust
Securities; (ii) the interest rate and the interest and other payment dates on
the Subordinated Debt Securities will match the distribution rate and
distribution and other payment dates for the Preferred Securities; (iii) the
Company shall pay all costs and expenses of the Trust to the extent not
satisfied out of the Trust's assets; and (iv) the Declaration further provides
that the NWPS Trustees shall not cause or permit NWPS Capital to, among other
things, engage in any activity that is not consistent with the purposes of NWPS
Capital.
Payments of distributions (to the extent funds therefor are legally
available) and other payments due on the Preferred Securities (to the extent
funds therefor are legally available) are guaranteed by the Company as and to
the extent set forth under "Description of the Guarantees" in the accompanying
Prospectus. If the Company does not make interest payments on the Subordinated
Debt Securities purchased by NWPS Capital, it is expected that NWPS Capital will
not have sufficient funds to pay distributions on the Preferred Securities. The
Guarantee is a full and unconditional guarantee from the time of its issuance
but does not apply to any payment of distributions unless and until NWPS Capital
has sufficient funds legally available for the payment of such distributions.
If the Company fails to make interest or other payments on the Subordinated
Debt Securities when due (taking account of any Extension Period), the
Declaration provides a mechanism whereby the holders of the Preferred
Securities, using the procedures described in "Description of the Preferred
Securities -- Book-Entry Only Issuance -- The Depository Trust Company" and "--
Voting Rights," may (i) appoint a Special Regular Trustee and (ii) direct the
Property Trustee to enforce its rights under the Subordinated Debt Securities.
If the Property Trustee fails to enforce its rights under the Subordinated Debt
Securities, to the fullest extent permitted by law, a holder of Preferred
Securities may, after such holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding against the Company to enforce
the Property Trustee's rights under the Subordinated Debt Securities without
first instituting any legal proceeding against the Property Trustee or any other
person or entity. The Company, under the Guarantee, acknowledges that the
Guarantee Trustee shall enforce the Guarantee on behalf of the holders of the
Preferred Securities. If the Company fails to make payments under the Guarantee,
the Guarantee provides a mechanism whereby the holders of the Preferred
Securities may direct the Guarantee Trustee to enforce its rights thereunder. If
the Guarantee Trustee fails to enforce the Guarantee, any holder of Preferred
Securities may, after such holder's written request to the Guarantee Trustee to
enforce the Guarantee, institute a legal proceeding directly against the Company
to enforce the Guarantee Trustee's rights under the Guarantee without first
instituting a legal proceeding against NWPS Capital, the Guarantee Trustee, or
any other person.
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The Company and NWPS Capital believe that the above mechanisms and
obligations, taken together, are substantially equivalent to a full and
unconditional guarantee by the Company of payments due on the Preferred
Securities. See "Description of the Guarantees -- General" in the accompanying
Prospectus.
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
The following is a summary of certain of the material United States federal
income tax consequences of the purchase, ownership and disposition of Preferred
Securities. Unless otherwise stated, this summary deals only with Preferred
Securities held as capital assets by holders who purchase the Preferred
Securities upon original issuance ("Initial Holders"). It does not deal with
special classes of holders such as banks, thrifts, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, or persons that will hold the
Preferred Securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does not address
the tax consequences to persons whose functional currency is other than the U.S.
Dollar or the tax consequences to shareholders, partners or beneficiaries of a
holder of Preferred Securities. Further, it does not include any description of
any alternative minimum tax consequences or the tax laws of any state or local
government or of any foreign government that may be applicable to the Preferred
Securities. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations thereunder and administrative and
judicial interpretations thereof, as of the date hereof, all of which are
subject to change, possibly on a retroactive basis.
CLASSIFICATION OF THE SUBORDINATED DEBT SECURITIES
In connection with the issuance of the Subordinated Debt Securities, Schiff
Hardin & Waite, special tax counsel to the Company and NWPS Capital, will render
its opinion generally to the effect that, although not entirely free from doubt,
under then current law and assuming full compliance with the terms of the
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Subordinated Debt Securities held by
NWPS Capital will be classified for United States federal income tax purposes as
indebtedness of the Company.
CLASSIFICATION OF NWPS CAPITAL
In connection with the issuance of the Preferred Securities, Schiff Hardin &
Waite, special tax counsel to the Company and NWPS Capital, will render its
opinion generally to the effect that, under then current law and assuming full
compliance with the terms of the Declaration and the Indenture (and certain
other documents), and based on certain facts and assumptions contained in such
opinion, NWPS Capital will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation.
Accordingly, for United States federal income tax purposes, each holder of
Preferred Securities will be considered the owner of an undivided interest in
the Subordinated Debt Securities, and each holder will be required to include in
its gross income any original issue discount ("OID") accrued with respect to its
allocable share of those Subordinated Debt Securities.
ORIGINAL ISSUE DISCOUNT
Because the Company has the option, under the terms of the Subordinated Debt
Securities, to defer payments of interest by extending interest payment periods
for up to 20 quarters, all payments in respect of the Subordinated Debt
Securities will be treated as "original issue discount." Holders of debt
instruments issued with OID must include that discount in income on an economic
accrual basis before the receipt of cash attributable to the interest,
regardless of their method of tax accounting. Generally, all of a holder's
taxable interest income with respect to the Subordinated Debt Securities will be
accounted for as OID, and actual distributions of stated interest will not be
separately reported as taxable income. The amount of OID that accrues in any
month will approximately equal the amount of the interest that accrues on the
Subordinated Debt Securities in that month at the stated
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interest rate. In the event that the interest payment period is extended,
holders will continue to accrue OID approximately equal to the amount of the
interest payment due at the end of the Extension Period on an economic accrual
basis over the length of the extended interest period.
Corporate holders of Preferred Securities will not be entitled to a
dividends received deduction with respect to any income recognized with respect
to the Preferred Securities.
MARKET DISCOUNT AND BOND PREMIUM
Holders of Preferred Securities other than Initial Holders may be considered
to have acquired their undivided interests in the Subordinated Debt Securities
with market discount or acquisition premium as such phrases are defined for
United States federal income tax purposes. Such holders are advised to consult
their tax advisors as to the income tax consequences of the acquisition,
ownership and disposition of the Preferred Securities.
RECEIPT OF SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF NWPS CAPITAL
Under certain circumstances, as described under the caption "Description of
the Preferred Securities -- Special Event Redemption or Distribution,"
Subordinated Debt Securities may be distributed to holders in exchange for the
Preferred Securities and in liquidation of NWPS Capital. Under current law, such
a distribution, for United States federal income tax purposes, would be treated
as a non-taxable event to each holder, and each holder would receive an
aggregate tax basis in the Subordinated Debt Securities equal to such holder's
aggregate tax basis in its Preferred Securities. A holder's holding period in
the Subordinated Debt Securities so received in liquidation of NWPS Capital
would include the period during which the Preferred Securities were held by such
holder.
Under certain circumstances described herein (see "Description of the
Preferred Securities -- Special Event Redemption or Distribution"), the
Subordinated Debt Securities may be redeemed for cash and the proceeds of such
redemption distributed to holders in redemption of their Preferred Securities.
Under current law, such a redemption would, for United States federal income tax
purposes, constitute a taxable disposition of the redeemed Preferred Securities,
and a holder could recognize gain or loss as if it sold such redeemed Preferred
Securities for cash. See "United States Federal Income Taxation -- Sales of
Preferred Securities."
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities will recognize gain or loss equal
to the difference between its adjusted tax basis in the Preferred Securities and
the amount realized on the sale of such Preferred Securities. A holder's
adjusted tax basis in the Preferred Securities generally will be its initial
purchase price increased by OID previously includible in such holder's gross
income to the date of disposition and decreased by payments received on the
Preferred Securities. Such gain or loss generally will be a capital gain or loss
and generally will be a long-term capital gain or loss if the Preferred
Securities have been held for more than one year.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Subordinated Debt Securities. A holder who disposes of his Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Debt Securities through
the date of disposition in income as ordinary income, and to add such amount to
his adjusted tax basis in his pro rata share of the underlying Subordinated Debt
Securities deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which will include, in the form of OID, all accrued
but unpaid interest) a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
S-30
<PAGE>
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a non-resident alien individual, a foreign
partnership, or a non-resident fiduciary of a foreign estate or trust.
Under present United States federal income tax law: (i) payments by NWPS
Capital or any of its paying agents to any holder of a Preferred Security that
is a United States Alien Holder will not be subject to United States federal
withholding tax; provided that (a) the beneficial owner of the Preferred
Security does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to vote,
(b) the beneficial owner of the Preferred Security is not a controlled foreign
corporation that is related to the Company through stock ownership, and (c)
either (A) the beneficial owner of the Preferred Security certifies to NWPS
Capital or its agent, under penalties of perjury, that it is not a United States
holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Preferred Security in such capacity, certifies to
NWPS Capital or its agent, under penalties of perjury, that such statement has
been received from the beneficial owner by it or by a Financial Institution
between it and the beneficial owner and furnishes NWPS Capital or its agent with
a copy thereof; and (ii) a United States Alien Holder of a Preferred Security
will generally not be subject to United States federal income or withholding tax
on any gain realized upon the sale or other disposition of a Preferred Security,
except that a United States Alien Holder will be subject to United States income
tax on any gain if such United States Alien Holder (a) is engaged in a trade or
business in the United States and such gain is effectively connected to the
conduct of such trade or business or (b) is an individual present in the United
States for 183 days or more during the taxable year, and certain other
conditions are met.
INFORMATION REPORTING TO HOLDERS
Subject to the qualifications discussed below, income on the Preferred
Securities will be reported to holders on Forms 1099, which forms should be
mailed to holders of Preferred Securities by January 31 following each calendar
year.
NWPS Capital will be obligated to report annually to Cede & Co., as holder
of record of the Preferred Securities, the OID related to the Subordinated Debt
Securities that accrued during the year. NWPS Capital currently intends to
report such information on Form 1099 prior to January 31 following each calendar
year. The Underwriters have indicated to NWPS Capital that, to the extent that
they hold Preferred Securities as nominees for beneficial holders, they
currently expect to report 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 NWPS
Capital. NWPS 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 the
Underwriters will receive Forms 1099 reflecting the income on their Preferred
Securities from such nominee holders rather than NWPS Capital.
BACKUP WITHHOLDING
Payments made in respect of, and proceeds from the sale of, the Preferred
Securities, or Subordinated Debentures distributed to Holders of Preferred
Securities, may be subject to a "backup" withholding tax of 31% unless the
holder complies with certain identification requirements. Any withheld amounts
will be allowed as a credit against the holder's United States federal income
tax, provided the required information is provided to the Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE,
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OWNERSHIP AND DISPOSITION OF THE PREFERRED SECURITIES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS.
UNDERWRITING
Under the terms and subject to the conditions contained in the Underwriting
Agreement dated the date hereof, each of the Underwriters named below, for whom
Morgan Stanley & Co. Incorporated, Dean Witter Reynolds Inc., NatWest Capital
Markets Limited, PaineWebber Incorporated and Piper Jaffray Inc. are acting as
representatives (the "Representatives") has severally agreed to purchase, and
NWPS Capital has agreed to sell to each of the Underwriters, severally, the
respective number of Preferred Securities set opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
PREFERRED
UNDERWRITERS SECURITIES
- -------------------------------------------------------------------------- ------------------
<S> <C>
Morgan Stanley & Co. Incorporated.........................................
Dean Witter Reynolds Inc..................................................
NatWest Capital Markets Limited...........................................
PaineWebber Incorporated..................................................
Piper Jaffray Inc.........................................................
----------
Total................................................................. 1,200,000
----------
----------
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Preferred Securities are
subject to the approval of certain legal matters by their counsel and to certain
other conditions. In the Underwriting Agreement, the several Underwriters have
agreed, subject to the terms and conditions set forth therein, to purchase all
the Preferred Securities offered hereby if any of the Preferred Securities are
purchased. In the event of default by an Underwriter, the Underwriting Agreement
provides that, in certain circumstances, the purchase commitments of the
nondefaulting Underwriters may be increased or the Underwriting Agreement may be
terminated.
The Underwriters propose to offer all or part of the Preferred Securities
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and all or part to certain securities
dealers at a price that represents a concession not in excess of $ per
Preferred Security. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $ per Preferred Security to certain other
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
Representative.
Because the proceeds of the sale of the Preferred Securities will ultimately
be used to purchase the Subordinated Debt Securities of the Company, the
Underwriting Agreement provides that the Company will pay to the Underwriters as
compensation for their services $ per Preferred Security (or $ in the
aggregate); provided that such compensation will be $ per Preferred
Security sold to certain institutions.
During a period of 90 days from the date of the Prospectus Supplement,
neither NWPS Capital nor the Company will, without the prior written consent of
Morgan Stanley & Co. Incorporated, directly or indirectly, sell, offer to sell,
grant any option for the sale of, pledge, or otherwise dispose of, any Preferred
Securities, any security convertible into or exchangeable into or exercisable
for Preferred Securities or any equity securities substantially similar to the
Preferred Securities (except for any series of Subordinated Debt Securities and
the Preferred Securities offered hereby) or enter into any swap or similar
agreement that transfers, in whole or in part, the economic risk of ownership of
Preferred Securities, whether any such transaction is to be settled by delivery
of Preferred Securities or other securities, in cash or otherwise.
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Application has been made to list the Preferred Securities on the New York
Stock Exchange. Listing will be contingent upon meeting the requirements of the
New York Stock Exchange, including those relating to distribution. If listing is
approved, trading of the Preferred Securities on the New York Stock Exchange is
expected to commence within a 7-day period after the date of this Prospectus
Supplement. The Representatives have advised NWPS Capital that they intend to
make a market in the Preferred Securities prior to the commencement of trading
on the New York Stock Exchange. The Representatives will have no obligation to
make a market in the Preferred Securities, however, and may cease market making
activities, if commenced, at any time.
NWPS Capital and the Company have agreed to indemnify the Underwriters
against, or contribute to payments that the Underwriters may be required to make
in respect of, certain liabilities, including liabilities under the Securities
Act of 1933, as amended.
Certain of the Underwriters engage in (or in the future may engage in)
transactions with, and perform services for, the Company and certain of its
affiliates in the ordinary course of business. Morgan Stanley & Co. Incorporated
represents Synergy Group Incorporated in connection with the pending acquisition
of Synergy by the Company described under "Pending Acquisition of Synergy Group
Incorporated" included in the accompanying Prospectus. Piper Jaffray Inc.
rendered financial advisory services to the Company in connection with the
Company's evaluation of the Synergy acquisition. National Westminster Bank, P l
c. is the parent of NatWest Capital Markets Limited and is serving as the
managing agent for the short-term loan for the Synergy acquisition.
NatWest Capital Markets Limited ("NatWest"), a United Kingdom broker-dealer
and a member of the Securities Futures Authority Limited, has agreed that, as
part of the distribution of the Preferred Securities offered hereby and subject
to certain exceptions, it will not offer or sell any Preferred Securities within
the United States, its territories or possessions or to persons who are citizens
thereof or residents therein. The Underwriting Agreement does not limit sale of
the Preferred Securitites offered hereby outside the United States.
NatWest has further represented and agreed that (i) it has not offered or
sold and will not offer or sell any Preferred Securities to persons in the
United Kingdom, except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (ii) it
has complied with and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation to
the Preferred Securities in, from or otherwise involving the United Kingdom, and
(iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Preferred Securities to a person who is of the kind described in Article 11(3)
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1995 or is a person to whom such document may otherwise lawfully be issued
or passed on.
LEGAL MATTERS
The validity of the Preferred Securities, the Subordinated Debt Securities,
the Guarantee and certain matters relating thereto will be passed upon for the
Company and NWPS Capital by Schiff Hardin & Waite, Chicago, Illinois. Certain
legal matters will be passed upon for the Underwriters by Winthrop, Stimson,
Putnam & Roberts, New York, New York. Certain matters of Delaware law relating
to the validity of the Preferred Securities will be passed upon by Richards,
Layton & Finger, Wilmington, Delaware, special Delaware counsel to the Company
and NWPS Capital.
S-33
<PAGE>
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 BY 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>
PROSPECTUS (SUBJECT TO COMPLETION, ISSUED JULY 28, 1995)
$200,000,000
NORTHWESTERN PUBLIC SERVICE COMPANY
MORTGAGE BONDS
SUBORDINATED DEBT SECURITIES
COMMON STOCK
NWPS CAPITAL FINANCING I
NWPS CAPITAL FINANCING II
NWPS CAPITAL FINANCING III
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
NORTHWESTERN PUBLIC SERVICE COMPANY
-----------------
NORTHWESTERN PUBLIC SERVICE COMPANY, A DELAWARE CORPORATION (THE "COMPANY"),
MAY OFFER FROM TIME TO TIME, TOGETHER OR SEPARATELY, (I) MORTGAGE BONDS
("MORTGAGE BONDS"); (II) SUBORDINATED DEBT SECURITIES ("SUBORDINATED DEBT
SECURITIES"); AND (III) COMMON STOCK, PAR VALUE $3.50 PER SHARE ("COMMON
STOCK").
NWPS CAPITAL FINANCING I, NWPS CAPITAL FINANCING II AND NWPS CAPITAL
FINANCING III (EACH, A "NWPS TRUST"), EACH A STATUTORY BUSINESS TRUST FORMED
UNDER THE LAWS OF THE STATE OF DELAWARE, MAY OFFER, FROM TIME TO TIME, PREFERRED
SECURITIES REPRESENTING UNDIVIDED BENEFICIAL INTERESTS IN THE ASSETS OF THE
RESPECTIVE NWPS TRUSTS ("PREFERRED SECURITIES"). THE PAYMENT OF PERIODIC CASH
DISTRIBUTIONS ("DISTRIBUTIONS") WITH RESPECT TO PREFERRED SECURITIES OF A
PARTICULAR NWPS TRUST OUT OF MONEYS HELD BY THAT NWPS TRUST, AND PAYMENTS ON
LIQUIDATION, REDEMPTION OR OTHERWISE WITH RESPECT TO SUCH PREFERRED SECURITIES,
WILL BE GUARANTEED BY THE COMPANY TO THE EXTENT DESCRIBED HEREIN ("GUARANTEE").
SEE "DESCRIPTION OF THE GUARANTEES" BELOW. THE COMPANY'S OBLIGATIONS UNDER EACH
GUARANTEE ARE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO ALL OTHER
LIABILITIES OF THE COMPANY AND RANK PARI PASSU WITH THE MOST SENIOR PREFERRED
STOCK ISSUED FROM TIME TO TIME BY THE COMPANY. THE SUBORDINATED DEBT SECURITIES
MAY BE ISSUED AND SOLD FROM TIME TO TIME IN ONE OR MORE SERIES BY THE COMPANY TO
A NWPS TRUST, OR A TRUSTEE OF SUCH TRUST, IN CONNECTION WITH THE INVESTMENT OF
THE PROCEEDS FROM THE OFFERING OF PREFERRED SECURITIES AND COMMON SECURITIES (AS
DEFINED HEREIN) OF SUCH NWPS TRUST. THE SUBORDINATED DEBT SECURITIES PURCHASED
BY A NWPS TRUST MAY BE SUBSEQUENTLY DISTRIBUTED PRO RATA TO HOLDERS OF PREFERRED
SECURITIES AND COMMON SECURITIES IN CONNECTION WITH THE DISSOLUTION OF SUCH NWPS
TRUST UPON THE OCCURRENCE OF CERTAIN EVENTS AS MAY BE DESCRIBED IN AN
ACCOMPANYING PROSPECTUS SUPPLEMENT. THE SUBORDINATED DEBT SECURITIES WILL BE
UNSECURED AND SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO CERTAIN OTHER
INDEBTEDNESS OF THE COMPANY AS MAY BE DESCRIBED IN THE ACCOMPANYING PROSPECTUS
SUPPLEMENT.
THE MORTGAGE BONDS, SUBORDINATED DEBT SECURITIES AND COMMON STOCK OF THE
COMPANY, AND THE PREFERRED SECURITIES OF ANY NWPS TRUST, ARE COLLECTIVELY
REFERRED TO HEREIN AS THE "OFFERED SECURITIES."
THE OFFERED SECURITIES MAY BE ISSUED IN ONE OR MORE SERIES OR ISSUANCES IN
AN AMOUNT NOT TO EXCEED IN THE AGGREGATE $200,000,000, BASED ON THE INITIAL
OFFERING PRICE, WITH THE AMOUNTS, PRICES AND TERMS TO BE DETERMINED AT OR PRIOR
TO THE TIME OF SALE AND SET FORTH IN ONE OR MORE SUPPLEMENTS TO THIS PROSPECTUS
(EACH, A "PROSPECTUS SUPPLEMENT").
(CONTINUED ON FOLLOWING PAGE)
------------------------
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.
-------------------
THE OFFERED SECURITIES WILL BE SOLD DIRECTLY, THROUGH AGENTS, UNDERWRITERS
AND DEALERS, INCLUDING MORGAN STANLEY & CO. INCORPORATED, AS DESIGNATED FROM
TIME TO TIME, OR THROUGH A COMBINATION OF SUCH METHODS. SEE "PLAN OF
DISTRIBUTION." THE NAMES OF SUCH AGENTS, UNDERWRITERS OR DEALERS AND ANY
APPLICABLE COMMISSIONS OR DISCOUNTS WILL BE SET FORTH IN, OR MAY BE CALCULATED
FROM, THE PROSPECTUS SUPPLEMENT. SEE "PLAN OF DISTRIBUTION" FOR A DESCRIPTION OF
ANY INDEMNIFICATION ARRANGEMENTS BETWEEN THE COMPANY, EACH OF THE NWPS TRUSTS
AND ANY UNDERWRITERS, DEALERS OR AGENTS.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
MORGAN STANLEY & CO.
INCORPORATED
, 1995
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
CERTAIN SPECIFIC TERMS OF THE PARTICULAR OFFERED SECURITIES IN RESPECT OF
WHICH THIS PROSPECTUS IS BEING DELIVERED WILL BE SET FORTH IN AN ACCOMPANYING
PROSPECTUS SUPPLEMENT, INCLUDING, WHERE APPLICABLE, THE INITIAL PUBLIC OFFERING
PRICE OF THE OFFERED SECURITIES, THE NET PROCEEDS THEREOF TO THE COMPANY OR A
NWPS TRUST, AS APPLICABLE, ANY LISTING OF SUCH OFFERED SECURITIES ON A
SECURITIES EXCHANGE AND ANY OTHER SPECIAL TERMS. THE PROSPECTUS SUPPLEMENT WILL
ALSO SET FORTH CERTAIN OTHER INFORMATION WITH REGARD TO OFFERED SECURITIES BEING
OFFERED, INCLUDING WITHOUT LIMITATION, THE FOLLOWING: (I) IN THE CASE OF
MORTGAGE BONDS, THE SERIES DESIGNATION, AGGREGATE PRINCIPAL AMOUNT, AUTHORIZED
DENOMINATIONS, MATURITY, INTEREST RATE (WHICH MAY BE FIXED OR VARIABLE) OR
METHOD OF CALCULATION OF INTEREST AND DATE OF PAYMENT OF ANY INTEREST, AND ANY
EXCHANGE, CONVERSION, REDEMPTION, SINKING FUND, OR CREDIT ENHANCEMENT PROVISIONS
AND OTHER SPECIAL TERMS OF EACH SERIES; (II) IN THE CASE OF SUBORDINATED DEBT
SECURITIES, THE SPECIFIC DESIGNATION, AGGREGATE PRINCIPAL AMOUNT, AUTHORIZED
DENOMINATION, MATURITY, INTEREST RATE (WHICH MAY BE FIXED OR VARIABLE) OR METHOD
OF CALCULATION OF INTEREST, DATE OF PAYMENT OF ANY INTEREST, ANY PREMIUM, THE
PLACE OR PLACES WHERE PRINCIPAL OF, PREMIUM, IF ANY, AND ANY INTEREST ON SUCH
SUBORDINATED DEBT SECURITIES WILL BE PAYABLE, THE RIGHT OF THE COMPANY, IF ANY,
TO DEFER PAYMENT OF INTEREST ON THE SUBORDINATED DEBT SECURITIES AND THE MAXIMUM
LENGTH OF SUCH DEFERRAL PERIOD, ANY EXCHANGE, CONVERSION, REDEMPTION OR SINKING
FUND PROVISIONS, AND ANY SECURITY, SUBORDINATION OR OTHER TERMS IN CONNECTION
WITH THE OFFERING AND SALE OF THE SUBORDINATED DEBT SECURITIES IN RESPECT OF
WHICH THIS PROSPECTUS IS DELIVERED; (III) IN THE CASE OF COMMON STOCK, THE
NUMBER OF SHARES AND THE TERMS OF OFFERING THEREOF; AND (IV) IN THE CASE OF
PREFERRED SECURITIES, THE DESIGNATION, NUMBER OF SECURITIES, LIQUIDATION
PREFERENCE PER SECURITY, DISTRIBUTION RATE (OR METHOD OF CALCULATION THEREOF),
DATES ON WHICH DISTRIBUTIONS SHALL BE PAYABLE AND DATES FROM WHICH DISTRIBUTIONS
SHALL ACCRUE, ANY VOTING RIGHTS, ANY EXCHANGE, CONVERSION, REDEMPTION OR SINKING
FUND PROVISIONS, ANY OTHER RIGHTS, PREFERENCES, PRIVILEGES, LIMITATIONS OR
RESTRICTIONS RELATING TO THE PREFERRED SECURITIES AND THE TERMS UPON WHICH THE
PROCEEDS OF THE SALE OF THE PREFERRED SECURITIES SHALL BE USED TO PURCHASE A
SPECIFIC SERIES OF SUBORDINATED DEBT SECURITIES OF THE COMPANY. IF SO SPECIFIED
IN THE APPLICABLE PROSPECTUS SUPPLEMENT, OFFERED SECURITIES MAY BE ISSUED IN
WHOLE OR IN PART IN THE FORM OF ONE OR MORE TEMPORARY OR GLOBAL SECURITIES.
THE PROSPECTUS SUPPLEMENT WILL ALSO CONTAIN INFORMATION, WHERE APPLICABLE,
ABOUT CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS RELATING TO THE
OFFERED SECURITIES COVERED BY THE PROSPECTUS SUPPLEMENT.
<PAGE>
For United Kingdom Purchasers: The Offered Securities may not be sold in the
United Kingdom other than to persons whose ordinary business is to buy or sell
securities, whether as principal or agent (except in circumstances that do not
constitute an offer to the public within the meaning of the Companies Act of
1985), and this Prospectus may only be issued or passed on to any person in the
United Kingdom if that person is of a kind described in Article 9(3) of the
Financial Services Act of 1986 (Investment Advertisements) (Exemption) Order
1988, as amended.
AVAILABLE INFORMATION
The Company and the NWPS Trusts have filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3 (including
any amendments thereto, the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Offered
Securities. This Prospectus does not contain all of the information set forth in
the Registration Statement and the exhibits and schedules thereto, certain
portions of which have been omitted pursuant to the rules of the Commission.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document are not necessarily complete. With respect to each such
contract, agreement or other document filed or incorporated by reference as an
exhibit to the Registration Statement, reference is made to such exhibit for a
more complete description of the matter involved, and each such statement is
qualified in its entirety by such reference.
The Company and Synergy Group Incorporated ("Synergy"), a corporation which
the Company proposes to acquire (see "Pending Acquisition of Synergy Group
Incorporated"), are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith file reports and other information with the Commission, including
proxy statements in the case of the Company, but not Synergy. Reports, proxy
statements and other information filed by the Company and Synergy with the
Commission may 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 Commission's Regional Offices located at Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661 and
at Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of
such materials may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Such reports, proxy statements and other information concerning the Company may
also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, on which exchange certain of the Company's
securities are listed. Information in this Prospectus concerning Synergy has
been obtained from reports and other information filed by Synergy with the
Commission.
No separate financial statements of any of the NWPS Trusts have been
included herein. The Company and the NWPS Trusts do not consider that such
financial statements would be material to holders of the Preferred Securities
because (i) all of the common securities of the NWPS Trusts will be owned,
directly or indirectly, by the Company, a reporting company under the Exchange
Act, (ii) each of the NWPS Trusts is a newly organized special purpose entity,
has no operating history and has no independent operations but exists for the
sole purpose of issuing securities representing undivided beneficial interests
in the assets of such NWPS Trust, investing the proceeds thereof in Subordinated
Debt Securities issued by the Company and engaging in activities necessary or
incidental thereto, and (iii) the obligations of each of the NWPS Trusts under
the Trust Securities (as defined herein) are fully and unconditionally
guaranteed by the Company to the extent that such NWPS Trust has funds legally
available to meet such obligations. See "Description of the Subordinated Debt
Securities" and "Description of the Guarantees."
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended December
31, 1994;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995;
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<PAGE>
(c) The Company's Current Report on Form 8-K filed May 26, 1995;
(d) The Company's Current Report on Form 8-K filed June 21, 1995; and
(e) The Company's Current Report on Form 8-K filed July 27, 1995.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), or 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering of the Offered Securities 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. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein 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 also is or is deemed to be incorporated by reference herein, or
in the Prospectus Supplement for the offering of the particular Offered
Securities, 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 WILL 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 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 WHICH ARE NOT SPECIFICALLY
INCORPORATED BY REFERENCE INTO THE INFORMATION THAT THE PROSPECTUS INCORPORATES.
REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO MS. ROGENE THADEN, TREASURER,
NORTHWESTERN PUBLIC SERVICE COMPANY, 33 THIRD STREET S.E., HURON, SOUTH DAKOTA
57350-1318, TELEPHONE NUMBER 605-353-8320.
THE COMPANY
The Company's principal business is energy distribution. The Company is
engaged as an electric and gas utility in generating, transmitting,
distributing, and selling electric energy in eastern South Dakota, where it
furnishes electric service to approximately 54,900 customers in more than 100
communities and adjacent rural areas and in purchasing, distributing, selling,
and transporting natural gas to approximately 75,000 customers in four
communities in Nebraska and 56 communities in eastern South Dakota. The Company,
through its subsidiaries, is also engaged in certain nonutility operations as
more fully discussed under the caption "Nonutility Operations" and has recently
contracted to acquire Synergy Group Incorporated, a major propane distribution
company. See "Pending Acquisition of Synergy Group Incorporated." The Company
was incorporated under the laws of the State of Delaware in 1923 and has its
principal office at 33 Third Street SE, Huron, South Dakota 57350-1318. Its
telephone number is 605-352-8411.
ELECTRIC BUSINESS
On a fully consolidated basis, 46% of the Company's 1994 operating revenues
were from the sale of electric energy. All of the Company's electric revenues
are derived from customers in South Dakota.
By customer category, 33% of 1994 total electric sales were from residential
sales, 50% were from commercial and industrial sales, 2% was from street
lighting and sales to public authorities, and 15% were from sales for resale.
The Company has relatively few large customers in its service territory.
Sales for resale primarily include power pool sales to other utilities.
Power pool sales fluctuate from year to year depending on a number of factors
including the Company's availability of excess short-term generation and the
ability to sell the excess power to other utilities in the power pool. The
Company also sells power and energy at wholesale to certain municipalities for
resale and to various governmental agencies.
The Company shares in the ownership of the Big Stone Generating Plant ("Big
Stone"), located near Big Stone City in northeastern South Dakota, the Coyote I
Electric Generating Plant ("Coyote"), located near Beulah, North Dakota, and the
Neal Electric Generating Unit #4 ("Neal"), located near Sioux City.
At December 31, 1994, the aggregate net summer peaking capacity of all
Company owned electric generating units was 309,480 kw, consisting of 105,711 kw
from Big Stone (the Company's 23.4% share),
2
<PAGE>
42,600 kw from Coyote (the Company's 10.0% share), 54,169 kw from Neal (the
Company's 8.7% share), and 107,000 kw from internal combustion turbine units and
small diesel units, used primarily for peaking purposes.
The Company is a summer peaking utility. The 1994 peak demand of 229,922 kw
occurred on July 18, 1994. Total system capability at the time of peak was
309,480 kw. The reserve margin for 1994 was 35%. The minimum reserve margin
requirement as determined by the members of the Mid-Continent Area Power Pool,
of which the Company is a member, is 15%.
The Company has an integrated resource plan to identify how to meet the
energy needs of its customers. The plan includes estimates of customer usage and
programs to provide for economic, reliable, and timely supplies of energy. The
plan does not anticipate the need for additional baseload generating capacity
for the Company for at least the next 10 years.
All of the Company's baseload plants are fueled by coal. The Company has
maintained competitive electric rates when compared to neighboring utilities and
has a competitive electric baseload generating production cost, which includes
fuel and plant operating expenses, of less than 1.5 CENTS per kilowatt hour.
Lignite and sub-bituminous coal were utilized by the Company as fuel for
virtually all of the electric energy generated during 1994. The continued
delivery of lignite and sub-bituminous coal to the three large steam generating
units in which the Company is part owner is reasonably assured by contracts
covering various periods of the operating lives of these units.
GAS BUSINESS
On a fully consolidated basis, 40% of the Company's 1994 operating revenues
were from the sale of gas energy. During 1994, the Company derived 56% of its
gas revenues from South Dakota and 44% from Nebraska. The Company's peak daily
sendout was 128,700 MMBTU.
For the year ended December 1994, 44% of the Company's gas sales were from
residential customers and 56% of sales were from commercial and industrial
sales. During the last five years the Company has expanded its gas distribution
operations to serve 29 new communities in South Dakota.
The Company owns and operates natural gas distribution systems serving
approximately 36,000 customers in eastern South Dakota, for which it purchases
gas from various gas marketing firms under gas transportation service agreements
with various gas marketing firms. These agreements provide for firm deliverable
pipeline capacity of approximately 49,300 MMBTU per day in South Dakota. The
Company has service agreements with Northern Natural Gas Company ("NNG")
providing for firm transportation of natural gas. While NNG has eliminated
nearly all of its gas supply activities, the Company has supply contracts in
place and peak shaving capacity to meet its peak day system needs.
In Nebraska, the Company owns and operates natural gas distribution systems
serving approximately 39,000 retail customers in the village of Alda and the
cities of Grand Island, Kearney, and North Platte, Nebraska. The Company
purchases much of its natural gas for these systems from KN Gas Supply Co. under
a seven-year service agreement entered into in 1993. The Company also purchases
certain quantities of gas for its Nebraska customers from various gas marketing
firms. These agreements provide for firm deliverable pipeline capacity of
approximately 49,600 MMBTU per day in Nebraska.
To supplement firm gas supplies, the Company has contracts for underground
natural gas storage services to meet the heating season and peak day
requirements of its gas customers. In addition, the Company owns and operates
six propane-air plants with a total rated capacity of 18,000 MMBTU per day, or
approximately 14% of peak day requirements. The propane-air plants provide an
economic alternative to pipeline transportation charges to meet the extreme
peaks caused by customer demand on extremely cold days.
A few of the Company's industrial customers purchase their natural gas
requirements directly from gas marketing firms for transportation and delivery
through the Company's distribution system. The transportation rates have been
designed to make the Company economically indifferent as to whether the Company
sells and transports gas or only transports gas.
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<PAGE>
COMPETITION
Although the Company's electric service territory is assigned according to
the South Dakota Public Utilities Act, and the Company has the right to provide
electric service to present and future electric customers in its assigned
service area for so long as the service provided is deemed adequate, the energy
industry in general has become increasingly competitive. Electric service also
competes with other forms of energy and the degree of competition may vary from
time to time depending on relative costs and supplies of other forms of energy.
The National Energy Policy Act of 1992 was designed to promote energy
efficiency and increased competition in the electric wholesale markets. Such Act
also allows the Federal Energy Regulatory Commission ("FERC") to order wholesale
wheeling by public utilities to provide utility and nonutility generators access
to public utility transmission facilitates. The FERC is currently investigating
a restructuring of the electric utility industry. Many states are currently
considering retail wheeling, which aims to provide all customers with the right
to choose their electricity supplier. No regulatory proposals have yet been
formally introduced in South Dakota.
FERC Order 636 requires, among other provisions, that all companies with
natural gas pipelines separate natural gas supply or production services from
transportation service and storage businesses. This allows gas distribution
companies, such as the Company, and individual customers to purchase gas
directly from producers, third parties, and various gas marketing entities and
transport it through the suppliers' pipelines. While Order 636 had positive
aspects by providing for more diversified supply and storage options, it also
required the Company to assume responsibility for the procurement,
transportation, and storage of natural gas. The alternatives now available under
Order 636 create additional pressure on all distribution companies to keep gas
supply and transportation pricing competitive, particularly for large customers.
WEATHER
Weather fluctuations in the Company's service area have the greatest
influence on the Company's revenues from year to year. Typically gas sales peak
when colder winter weather patterns create increased winter heating needs while
sales decline during warmer winter periods. Electric sales peak during warmer
summer periods due to increased air conditioning sales while cooler summer
weather patterns produce less sales of electric energy.
REGULATION
The Company is a "public utility" within the meaning of the Federal Power
Act and the South Dakota Public Utilities Act and, as such, is subject to the
jurisdiction of, and regulation by, FERC with respect to issuance of securities,
the South Dakota Public Utilities Commission ("PUC") with respect to electric
service territories, and both FERC and the PUC with respect to rates, service,
accounting records, and in other respects. The State of Nebraska has no
centralized regulatory agency which has jurisdiction over the Company's
operations in that state; however, the Company's natural gas rates are subject
to regulation by the municipalities in which it operates.
Under the South Dakota Public Utilities Act, enacted in 1975, a requested
rate increase may be implemented by the Company 30 days after the date of its
filing unless its effectiveness is suspended by the PUC and, in such event, can
be implemented subject to refund with interest six months after the date of
filing, unless sooner authorized by the PUC. The Company's electric rate
schedules provide that it may pass along to all classes of customers qualified
increases or decreases in the cost of fuel used in its generating stations and
in the cost of fuel included in purchased power. A purchased gas adjustment
provision in its gas rate schedules permits the company to pass along to gas
customers increases or decreases in the cost of purchased gas.
The Company's last electric rate increase amounted to less than 1% in May,
1985. On May 26, 1994, the Company filed for a $2.4 million increase in South
Dakota natural gas revenues. As a result of a negotiated settlement with the PUC
on November 15, 1994, the Company implemented rates which will produce
additional annual natural gas revenues of $2.1 million, assuming normal weather,
representing an overall
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increase of 6.2%. On December 30, 1994, the Company filed for a $2.7 million
increase in rates applicable to its Nebraska natural gas service area. Following
a negotiated settlement, an annual increase of $2.275 million has been
implemented, effective July 1, 1995, an overall increase of 8.7%.
CAPITAL SPENDING AND FINANCING
The Company's primary capital requirements include the funding of its
utility construction and expansion programs, the funding of debt and preferred
stock retirements and sinking fund requirements, and the funding of its
corporate development and investment activities.
Expenditures for regulated utility construction activities for 1994, 1993,
and 1992 were $22.7 million, $20.0 million, and $18.5 million. Construction
expenditures during the last three years included expenditures related to the
installation of an additional 43 mw of internal electric peaking capacity, the
expansion of the Company's natural gas system into 29 additional communities in
eastern South Dakota, and to construction of an operations center which will
provide future cost savings and operating efficiencies through consolidation of
activities. Construction expenditures for the Company's regulated utility
businesses are estimated to be $19.3 million in 1995. The majority of these
projected expenditures will be spent on enhancements of the electric and gas
distribution systems and completion of the operations center. Estimated
construction expenditures for the Company's regulated utility businesses for the
years 1995 through 1999 are expected to be approximately $69 million.
Capital requirements for the mandatory retirement of long-term debt and the
mandatory preferred stock sinking fund redemption totaled $600,000, $180,000,
and $513,000, for the years ended 1994, 1993, and 1992. It is expected that such
mandatory retirements will be $600,000 in 1995, $1,080,000 in 1996, $570,000 in
1997, $20.6 million in 1998, and $13.5 million in 1999.
NONUTILITY OPERATIONS
NORTHWESTERN GROWTH CORPORATION ("NGC"). NGC was incorporated under the laws
of South Dakota in 1994 to pursue and manage nonutility investments and
development activities. Although the primary focus of NGC's investment program
will be to seek growth opportunities in the energy, energy equipment, and energy
services industries, NGC is also pursuing opportunities in existing and emerging
growth entities in nonenergy industries that meet return and capital gain
requirements. Along with a portfolio of marketable securities, NGC's assets
include the investments of three subsidiaries: Northwestern Networks, Inc.,
Northwestern Systems, Inc., and SYN Inc.
NORTHWESTERN NETWORKS, INC. ("NNI"). NNI was incorporated in South Dakota in
1986. NNI holds a common stock investment in LodgeNet Entertainment Corporation,
a provider of television entertainment and information systems to hotels and
motels.
NORTHWESTERN SYSTEMS, INC. ("NSI"). NSI was incorporated in South Dakota in
1986. NSI owns all of the common stock ownership in Lucht, Inc., a firm that
develops, manufactures, and markets multi-image photographic printers and other
related equipment.
SYN INC. ("SYN"). SYN, a Delaware corporation, was formed for the purpose of
acquiring Synergy Group Incorporated, a major propane distributor. See "Pending
Acquisition of Synergy Group Incorporated."
GRANT, INC. Grant, Inc., which holds title to property not used in the
Company's utility business, was incorporated in South Dakota in 1972.
PENDING ACQUISITION OF SYNERGY GROUP INCORPORATED
GENERAL
On May 17, 1995, SYN entered into a Purchase and Sale Agreement (the
"Acquisition Agreement") with Synergy Group Incorporated, a Delaware corporation
("Synergy"), S & J Investments and the stockholders of Synergy (the "Synergy
Stockholders"), providing for the acquisition by SYN of Synergy and its
5
<PAGE>
subsidiaries and of certain operating equipment which Synergy has been leasing
from S & J Investments (the "Acquisition"). NGC, the immediate parent
corporation of SYN, joined in the Acquisition Agreement to guarantee SYN's
performance thereof.
Under the terms of the Acquisition Agreement, the Acquisition is subject to
various conditions and approvals, including the accuracy of various
representations and warranties made by the sellers as to the business, assets,
financial condition and results of operations of Synergy and its subsidiaries,
the obtaining of financing needed by SYN for the Acquisition, the issuance of
orders by the FERC authorizing the Company's issuance of the securities offered
under this Prospectus, the net proceeds from which are to be used to provide
such financing for SYN (see "Use of Proceeds"), and the expiration or
termination of the waiting period for the Acquisition under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. On June 19, 1995 the FERC
issued the required orders and on July 6, 1995 early termination of the
Hart-Scott-Rodino waiting period was granted.
The Acquisition will be an expansion of the Company's energy distribution
business, which currently is primarily regulated electric and gas utility
distribution. See "The Company". Two of the Company's corporate objectives are
intended to be accomplished through the Acquisition. The immediate objective is
to expand the Company's energy distribution business. The second objective is to
use the business acquired from Synergy as a base for additional acquisitions in
the propane distribution industry which, unlike the Company's electric and gas
public utility business, is not regulated as to rates or territory served. The
Company is currently considering the acquisition of a small propane distributor.
The propane distribution industry currently consists of approximately 8,000
retail propane marketing companies in the continental United States, with
propane being the fourth largest source of energy marketed at retail in the
United States, following electricity, natural gas and fuel oil.
As a result of the factors affecting Synergy's business, see "Business of
Synergy", the Company expects that its consolidated revenues and earnings may be
subject to increased variability following consummation of the Acquisition.
BUSINESS OF SYNERGY
Synergy, headquartered in Farmingdale, New York, is a multi-state marketer
principally engaged in the retail distribution of propane and other fuels for
residential, commercial, industrial, agricultural and other uses. Synergy's
propane sales during the past three fiscal years represented approximately 83%
of its annual revenues, of which the major portion (approximately 50% of propane
sales in the fiscal year ending March 31, 1995) resulted from sales to customers
who utilize propane for residential purposes, primarily for home heating, water
heating and cooking. The balance of propane sales are primarily for commercial,
industrial and agricultural use. Synergy also sells propane for use as engine
fuel for forklifts and over-the-road vehicles. Synergy currently maintains 152
retail branches which service approximately 200,000 customers in 23 states,
primarily in rural and suburban areas of the Northeast, Mid-Atlantic, Southeast
and Southcentral regions of the United States. According to available industry
data, Synergy is, based upon volume sold, one of the nation's 10 largest
retailers of propane.
Synergy also sells gasoline, diesel and aviation fuel, and appliances and
equipment which use propane, and is engaged in the sale, repair and leasing of
forklift trucks.
Synergy purchases propane from major domestic oil companies as well as
independent oil and liquid gas producers. These producers ship the propane via
pipeline to immediate supply terminals at which Synergy's large transport trucks
take delivery and transport the propane to bulk storage tanks. Synergy's fleet
of approximately 500 tank trucks delivers the propane from these bulk storage
facilities to approximately 193,000 propane storage tanks or cylinders which it
leases to its customers and which are located at customer premises. These tanks
are used exclusively to hold propane purchased from Synergy, thereby promoting
the stability of Synergy's customer base. While the cost and inconvenience of
switching tanks tends to minimize switching by customers among suppliers on the
basis of minimal price variations, it also makes it more difficult to obtain new
customers, other than through acquisitions, in areas where there are existing
relationships between potential customers and other distributors.
6
<PAGE>
The retail propane industry is mature, with only limited growth in total
demand for the product foreseen. The Company expects the overall demand for
propane to remain relatively constant over the next several years, with
year-to-year industry volumes being impacted primarily by weather patterns.
Therefore, Synergy's ability to grow within the industry will be dependent on
its ability to acquire other retail distributors, on the success of opening new
district locations and on the success of its marketing efforts to acquire new
customers.
Synergy competes with other distributors of propane, including several major
companies and several thousand small independent operators. Synergy's ability to
compete effectively depends on the reliability of its service, its
responsiveness to customers and its ability to maintain competitive retail
prices.
Synergy competes for customers against suppliers of electricity, fuel oil
and natural gas. In the last two decades, many new homes were built, and older
homes converted to use electrical heating systems and appliances. Electricity is
a major competitor of propane, but propane generally enjoys a substantial
competitive price advantage over electricity. The Company believes that fuel oil
does not present a significant competitive threat in Synergy's primary service
areas because: (i) propane is a residue-free, cleaner energy source, (ii)
environmental concerns make fuel oil relatively unattractive, and (iii) fuel oil
appliances generally are not as efficient as propane appliances. Furnaces and
appliances that burn propane will not operate on fuel oil, and therefore a
conversion from one fuel to the other requires the installation of new
equipment. Synergy's customers will have an incentive to switch to fuel oil only
if fuel oil becomes significantly less expensive than propane. Synergy generally
does not attempt to sell propane in areas served by natural gas distribution
systems, except sales for specialized industrial applications because the price
per equivalent energy unit of propane is, and has historically been, higher than
that of natural gas. To use natural gas, however, a retail customer must be
connected to a distribution system provided by a local utility. Natural gas is
not expected by management of the Company to create significant competition for
Synergy in areas that are not currently served by natural gas distribution
systems because of the costs involved in building or connecting to a natural gas
distribution system.
The propane gas distribution business is affected by economic and other
factors, some of which are beyond the control of the Synergy, such as weather
conditions. Synergy's business is highly seasonal, with a substantial portion of
its revenues customarily being generated during the six month winter period
ending in March. Synergy's business was adversely affected by unusually warm
winter conditions in fiscal 1995. Warm winter conditions in the future periods
may adversely affect Synergy's revenues, operating income and cash flow in such
years.
The retail propane business is a "margin-based" business in which gross
profits are dependent upon the excess of the sales price over the propane supply
costs. Propane is a commodity, and, as such, its unit price is subject to
changes in response to changes in supply or other market conditions.
Consequently, the unit price of propane purchased by Synergy, as well as other
marketers, can change rapidly over a short period. In general, product supply
contracts permit suppliers to charge posted prices at the time of delivery or
the current prices established at major storage points. If rapid increases in
the wholesale cost of propane cannot be immediately passed on to retail
customers, such increases may reduce margins on retail sales. Consequently,
Synergy's profitability will be sensitive to changes in wholesale propane
prices.
According to public reports filed by Synergy with the Commission, Synergy
incurred substantial net losses in each of its last five fiscal years. As a
result of such net losses, Synergy has been in default under certain of its debt
covenants and the audit report prepared by Synergy's independent accountants
relating to Synergy's financial statements for the last two fiscal years noted
that Synergy's recurring losses from operations, net capital deficiency and
default on certain of its debt "raise substantial doubt about the entity's
ability to continue as a going concern." Although Synergy has recorded net
losses during each of the last five years, its operating income for the years
ended March 31, 1995 and 1994 was approximately $6,492,000 and $4,090,000,
respectively. See "Management of Synergy" for a description of the Company's
financing plans and anticipated operating efficiencies which the Company
believes will substantially improve Synergy's results of operations following
the Acquisition.
7
<PAGE>
ACQUISITION CONSIDERATION
The consideration to be paid by SYN for the Acquisition, in addition to
assuming various liabilities of Synergy and its subsidiaries, consists of (i)
cash in the amount of $137,500,000, which amount will be subject to adjustment
upward or downward according to whether the working capital of Synergy (as
specifically defined in the Acquisition Agreement) exceeds or is less than
$21,042,000 at the time of closing of the Acquisition, (ii) a promissory note
payable by SYN in the principal amount of $1,250,000, and (iii) the issuance to
the Synergy Stockholders of 17,500 shares of the Common Stock of SYN (17.5% of
the total that will be outstanding) and 2,500 shares of the 15% Series A
Cumulative Preferred Stock of SYN (valued at $2,500,000), such shares of
preferred stock being part of a series of preferred stock of SYN for which the
remaining 50,000 shares are expected to be issued to the Company in exchange for
a $50,000,000 portion of the long-term financing which the Company expects to
provide to SYN. Substantially all of Synergy's loan indebtedness ($88.2 million)
will be paid from the cash portion of the consideration for the Acquisition.
MANAGEMENT OF SYNERGY
The Acquisition will be made in association with Empire Gas Corporation
("Empire Gas"), a large propane distribution company headquartered in Lebanon,
Missouri, which has a management experienced in the retail propane distribution
business. NGC and SYN have entered into a management agreement (the "Management
Agreement") with Empire Gas, pursuant to which Empire Gas has been engaged to
perform the planning and management of the assets and business operations of SYN
and its subsidiaries, subject to the direction of the Board of Directors of SYN,
following the Acquisition (the "Management Services").
It is planned that, immediately upon the consummation of the Acquisition,
substantial changes will be made in the management and operation of the acquired
business in order to achieve improvement in the results of operations of the
business. NGC and Empire Gas will implement significant cost efficiency measures
to reduce Synergy's operating, selling and general and administrative expenses.
These measures include the elimination of employee positions, corporate overhead
and field location operating expenses. The Synergy headquarters office
operations will be consolidated with the Empire Gas corporate offices in
Lebanon, Missouri, resulting in substantial expense savings. Another significant
portion of the expense reductions is represented by the elimination of
compensation and vehicle lease expenses previously paid to the Synergy
Stockholders. In addition to operating cost reductions, the Company's post
acquisition financing and capitalization plan for Synergy will reduce overall
financing expenses and provide capital for growth that was not available prior
to the acquisition. See "Northwestern Public Service Company and Synergy Group
Incorporated Pro Forma Financial Information."
As compensation for the Management Services, SYN will pay Empire Gas a Fixed
Fee and a Management Fee. The Fixed Fee is intended to cover Empire Gas'
operating overhead in performing the Management Services and initially will be
$3,250,000 per annum, subject to adjustment annually based upon increases in the
Consumer Price Index. The Management Fee will be at the rate of $500,000 per
annum plus 10% of the amount by which the earnings before interest, taxes,
depreciation and amortization of SYN and its subsidiaries, on a consolidated
basis, exceed certain threshold amounts.
At the time of the Acquisition, Empire Gas will purchase 10% of the common
stock of SYN for $10,000 and will have an ongoing option to purchase from NGC an
additional 20% of the common stock of SYN for $20,000. However, according to the
formula stated in another agreement among SYN, Empire Gas and NGC, NGC will be
allowed to reacquire from Empire Gas up to 7,500 shares of such common stock of
SYN, without payment, if Empire Gas fails to achieve certain cumulative results
from the management of SYN and its subsidiaries while the Management Agreement
remains in effect.
The term of the Management Agreement extends to June 30, 2000 and continues
year to year thereafter unless terminated earlier by SYN or Empire Gas. The
Management Agreement may be terminated by either party prior to the expiration
of the term on any one of several grounds specified in the Agreement. The
Management Agreement includes a right of termination by SYN if its operating
results do not exceed prescribed thresholds which increase annually as specified
therein. In the event the Company receives notice
8
<PAGE>
that the Management Agreement will be terminated by Empire Gas, SYN has the
right to the use of the personnel and facilities of Empire Gas for a period of
up to 18 months following such notice by Empire Gas, while developing an
alternative for Empire Gas' services.
THIRD PARTY SALE
NGC and SYN have entered into a purchase agreement with an unrelated party,
granting that party the right to purchase certain of the retail branches to be
acquired by SYN from Synergy (the "Third Party Sale"). The third party purchase
must occur immediately after the closing of the Acquisition and the purchase
price is payable in cash and will be based on the price paid by SYN to Synergy
for such outlets. Such cash price is estimated to be approximately $40 million,
which would decrease SYN's cash payment for the Acquisition to approximately
$100 million, which reduction would be applied to reduce the long-term
investment in securities to be issued by SYN to NGC or the Company and the loan
to be made by NGC to SYN.
CAPITALIZATION OF SYN
The capitalization of SYN, taking into account the financing intended to be
provided to SYN by the Company and NGC from the net proceeds of certain of the
securities being offered pursuant to this Prospectus (see "Use of Proceeds"), is
planned to be as follows at the time of the Acquisition closing, assuming
consummation of the third party sale:
<TABLE>
<S> <C>
Common Stock (100,000 shares outstanding):
NGC (72,500 shares) (1)............................................. $ 72,500
Empire Gas (10,000 shares) (1)...................................... 10,000
Former Synergy Stockholders (17,500 shares) (2)..................... 17,500
$ 100,000
15% Series A Cumulative Preferred Stock (52,500 shares outstanding):
NGC (50,000 shares)................................................. $ 50,000,000
Former Synergy Stockholders (2,500 shares) (2)...................... 2,500,000
$ 52,500,000
Long Term Debt:
Secured Term Loan from NGC (3)...................................... $ 52,500,000
Total Capitalization.............................................. $105,100,000
<FN>
- ------------------------
(1) Empire Gas has an option to purchase 20,000 of the shares owned by NGC for
a price of $1 per share.
(2) Issued to Former Synergy Stockholders as part of Acquisition consideration.
(3) The Company anticipates that SYN will obtain a bank borrowing facility to
fund SYN's working capital needs.
</TABLE>
9
<PAGE>
NORTHWESTERN PUBLIC SERVICE COMPANY AND
SYNERGY GROUP INCORPORATED
PRO FORMA FINANCIAL INFORMATION
Set forth below are summary financial data extracted from the audited
consolidated statement of operations of the Company for the year ended December
31, 1994, the unaudited consolidated financial statements of the Company as of
March 31, 1995, and for the three months then ended; the summary financial data
extracted from the unaudited statement of operations of Synergy for the 12
months ended December 31, 1994 and for the three months ended March 31, 1995,
and balance sheet information as of March 31, 1995; and the pro forma financial
information for the Company ("the Pro Forma Financial Information") for the year
ended December 31, 1994, for the three months ended March 31, 1995, and as of
March 31, 1995, based on such historical financial statements, to illustrate the
effects of the Acquisition. The Pro Forma Financial Information illustrates the
effects of the Acquisition as adjusted to give effect to the Third Party Sale.
(See "Pending Acquisition of Synergy Group Incorporated.")
The Acquisition will be accounted for using the purchase method of
accounting. After the Acquisition, the total purchase price of the Acquisition
will be allocated to Synergy's tangible and intangible assets and liabilities
based upon their respective fair values. The allocation of the aggregate
purchase price included in the Pro Forma Financial Information is preliminary,
but the final allocation of the purchase price is not expected to differ
materially from the preliminary allocation. The financing plan to be executed
for the funding of the Acquisition is expected to be as presented in the Pro
Forma Financial Information. Although market conditions may impact certain
financing options and assumptions as to interest and dividend rates, the overall
financing plan is not expected to vary materially from that presented.
The pro forma statements of operations for the year ended December 31, 1994
and for the three months ended March 31, 1995, give effect to the Acquisition,
and the related transactions as if they had occurred on January 1, 1994. The pro
forma balance sheet as of March 31, 1995 has been prepared as if the transaction
had occurred on that date. The pro forma financial information does not purport
to present the financial position or results of operations of the Company had
the Acquisition actually been completed as of the dates indicated. In addition,
the pro forma financial information is not necessarily indicative of future
results of operations and should be read in conjunction with the historical
consolidated financial statements of the Company incorporated by reference
herein.
10
<PAGE>
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ESTIMATED
EFFECTS OF
PARTIAL SALE
OF ASSETS TO
NPS SYNERGY UNRELATED PRO FORMA
HISTORICAL HISTORICAL THIRD PARTY(A) SUBTOTAL ADJUSTMENT PRO FORMA
---------- ---------- -------------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenue............................ $ 157,266 $ 128,182 $(28,814) $256,634 -- $256,634
Cost of Product Sold......................... 80,457 62,242 (14,748) 127,951 -- 127,951
---------- ---------- -------------- -------- ----------- ---------
Gross Profit................................. 76,809 65,940 (14,066) 128,683 -- 128,683
---------- ---------- -------------- -------- ----------- ---------
Operating Costs and Expenses
Operating and maintenance expenses......... 18,191 44,663 (10,046) 52,808 $(4,181)(B) 48,627
General and administrative................. 9,707 14,239 -- 23,946 (4,944)(B) 19,002
Depreciation and amortization.............. 12,439 4,983 (905) 16,517 448(C) 16,965
Property and other taxes................... 6,104 -- -- 6,104 -- 6,104
---------- ---------- -------------- -------- ----------- ---------
46,441 63,885 (10,951) 99,375 (8,677) 90,698
---------- ---------- -------------- -------- ----------- ---------
Operating Income............................. 30,368 2,055 (3,115) 29,308 8,677 37,985
---------- ---------- -------------- -------- ----------- ---------
Other Income (Expense)
Investment income and other................ 2,611 1,185 -- 3,796 -- 3,796
Interest expense........................... (9,670) (11,994) -- (21,664) 7,504(D) (14,160)
Debt restructuring costs................... -- (2,976)(G) -- (2,976) -- (2,976)
---------- ---------- -------------- -------- ----------- ---------
(7,059) (13,785) -- (20,844) 7,504 (13,340)
---------- ---------- -------------- -------- ----------- ---------
Income (Loss) Before Income Taxes............ 23,309 (11,730) (3,115) 8,464 16,181 24,645
Provision (Credit) for Income Taxes.......... 7,869 (324) (94) 7,451 (269)(E) 7,182
---------- ---------- -------------- -------- ----------- ---------
Net Income................................. 15,440 (11,406) (3,021) 1,013 16,450 17,463
Dividends on Preferred Stock................. (120) -- -- (120) (2,043)(F) (2,163)
---------- ---------- -------------- -------- ----------- ---------
Net Income Available for Common............ $ 15,320 $ (11,406) $ (3,021) $ 893 $14,407 $ 15,300(G)
---------- ---------- -------------- -------- ----------- ---------
---------- ---------- -------------- -------- ----------- ---------
Net Income per Share......................... $ 2.00 $ 1.74(G)
---------- ---------
---------- ---------
Weighted Average Shares Outstanding.......... 7,677 8,805
---------- ---------
---------- ---------
Selected Financial Ratios
Interest coverage.......................... 5.14(H) 4.65
---------- ---------
---------- ---------
Ratio of earnings to fixed charges......... 3.39(H) 2.73(G)
---------- ---------
---------- ---------
Ratio of earnings to fixed charges,
including preferred dividends............. 3.33(H) 2.25(G)
---------- ---------
---------- ---------
</TABLE>
11
<PAGE>
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ESTIMATED
EFFECTS OF
PARTIAL SALE
OF ASSETS TO
NPS SYNERGY UNRELATED PRO FORMA
HISTORICAL HISTORICAL THIRD PARTY(A) SUBTOTAL ADJUSTMENT PRO FORMA
---------- ---------- -------------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenue............................ $ 50,754 $ 42,816 ($10,958) $ 82,612 $-- $ 82,612
Cost of Product Sold......................... 26,185 20,907 (6,001) 41,091 -- 41,091
---------- ---------- -------------- -------- ----------- ---------
24,569 21,909 (4,957) 41,521 -- 41,521
---------- ---------- -------------- -------- ----------- ---------
Operating Costs and Expenses
Operating and maintenance expenses......... 4,210 11,889 (2,819) 13,280 197(B) 13,477
General and administrative................. 2,594 (159)(G) -- 2,435 (690)(B) 1,745
Depreciation and amortization.............. 3,210 1,476 (220) 4,466 72(C) 4,538
Property and other taxes................... 1,673 -- -- 1,673 -- 1,673
---------- ---------- -------------- -------- ----------- ---------
11,687 13,206 (3,039) 21,854 (421) 21,433
---------- ---------- -------------- -------- ----------- ---------
Operating Income............................. 12,882 8,703 (1,918) 19,667 421 20,088
---------- ---------- -------------- -------- ----------- ---------
Other Income (Expense)
Investment income and other................ 565 172 -- 737 -- 737
Interest expense........................... (2,590) (2,390) -- (4,980) 1,267(D) (3,713)
Debt restructuring costs................... -- (24) -- (24) -- (24)
---------- ---------- -------------- -------- ----------- ---------
(2,025) (2,242) -- (4,267) 1,267 (3,000)
---------- ---------- -------------- -------- ----------- ---------
Income (Loss) Before Income Taxes............ 10,857 6,461 (1,918) 15,400 1,688 17,088
Provision (Credit) for Income Taxes.......... 3,754 (224) -- 3,530 (282)(E) 3,248
---------- ---------- -------------- -------- ----------- ---------
Net Income................................... 7,103 6,685 (1,918) 11,870 1,970 13,840
Dividends on Preferred Stock................. (30) -- -- (30) (511)(F) (541)
---------- ---------- -------------- -------- ----------- ---------
Net Income Available for Common.............. $ 7,073 $ 6,685 ($ 1,918) $ 11,840 $ 1,459 $ 13,299(G)
---------- ---------- -------------- -------- ----------- ---------
---------- ---------- -------------- -------- ----------- ---------
Net Income per Share......................... $ 0.92 $ 1.51(G)
---------- ---------
---------- ---------
Weighted Average Shares Outstanding.......... 7,677 8,805
---------- ---------
---------- ---------
Selected Financial Ratios
Interest coverage.......................... 7.53(H) 6.68
---------- ---------
---------- ---------
Ratio of earnings to fixed charges........... 5.09(H) 5.52(G)
---------- ---------
---------- ---------
Ratio of earnings to fixed charges, including
preferred dividends......................... 5.00(H) 4.69(G)
---------- ---------
---------- ---------
<FN>
- ------------------------
Note: The results of operations for Synergy for the three months ended March
31, 1995 are not indicative of a full year's results of operations.
</TABLE>
12
<PAGE>
UNAUDITED PRO FORMA BALANCE SHEET
MARCH 31, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ESTIMATED SALE
OF CERTAIN
ASSETS TO
NPS SYNERGY UNRELATED PRO FORMA
HISTORICAL HISTORICAL THIRD PARTY(I) SUBTOTAL ADJUSTMENT PRO FORMA
---------- ---------- -------------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Current Assets
Cash....................................... $ 3,338 $ 4,117 $ 40,000 $ 47,455 ($40,000)(J) $ 7,455
Trade receivables.......................... 13,890 16,677 (4,598) 25,969 (990)(K) 24,979
Inventories................................ 13,332 10,607 (2,393) 21,546 (1,500)(K) 20,046
Prepaid expenses........................... -- 1,137 -- 1,137 -- 1,137
Other...................................... 5,765 -- -- 5,765 -- 5,765
---------- ---------- -------------- -------- ----------- ---------
36,325 32,538 33,009 101,872 (42,490) 59,382
---------- ---------- -------------- -------- ----------- ---------
Property and Equipment
At cost, net of accumulated depreciation... 252,806 70,045 (13,685) 309,166 7,140(K) 316,306
---------- ---------- -------------- -------- ----------- ---------
Other Assets (net)
Goodwill and other intangibles............. -- 2,348 (19,324) (16,976) 54,422(K) 37,446
Other...................................... 74,301 1,014 -- 75,315 (1,014)(K) 74,301
---------- ---------- -------------- -------- ----------- ---------
74,301 3,362 (19,324) 58,339 53,408 111,747
---------- ---------- -------------- -------- ----------- ---------
Total Assets............................... $ 363,432 $ 105,945 $-- $469,377 $ 18,058 $487,435
---------- ---------- -------------- -------- ----------- ---------
---------- ---------- -------------- -------- ----------- ---------
Current Liabilities
Commercial paper........................... $ 6,000 $ -- $-- $ 6,000 $ -- $ 6,000
Current maturities of long-term debt....... 570 88,387 -- 88,957 (88,387)(L) 570
Accounts payable and accrued expenses...... 29,699 10,540 -- 40,239 5,455(K) 45,694
---------- ---------- -------------- -------- ----------- ---------
36,269 98,927 -- 135,196 (82,932) 52,264
---------- ---------- -------------- -------- ----------- ---------
Other Liabilities
Deferred income taxes...................... 37,742 2,093 -- 39,835 (1,720)(L) 38,115
Unamortized investment tax credits......... 10,444 -- -- 10,444 -- 10,444
Deferred interest payable.................. -- 1,030 -- 1,030 (1,030)(L) --
Other...................................... 27,862 935 -- 28,797 -- 28,797
---------- ---------- -------------- -------- ----------- ---------
76,048 4,058 -- 80,106 (2,750) 77,356
---------- ---------- -------------- -------- ----------- ---------
Long Term Debt............................... 129,318 4,330 -- 133,648 47,374(M) 181,022
---------- ---------- -------------- -------- ----------- ---------
Company-Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust.... -- -- -- -- 24,212(N) 24,212
---------- ---------- -------------- -------- ----------- ---------
Cumulative Preferred Stock................... 2,640 41,700 -- 44,340 (41,700)(Q) 2,640
---------- ---------- -------------- -------- ----------- ---------
Common Stock Equity (Deficit)
Common stock............................... 26,870 41 -- 26,911 4,268(O) 31,179
Additional paid-in capital................... 29,923 5,284 -- 35,207 21,191(P) 56,398
Retained earnings.......................... 59,183 (48,395) -- 10,788 48,395(Q) 59,183
Unrealized gain on investments, net........ 3,181 -- -- 3,181 -- 3,181
---------- ---------- -------------- -------- ----------- ---------
119,157 (43,070) -- 76,087 73,854 149,941
---------- ---------- -------------- -------- ----------- ---------
Total Liabilities & Stockholders Equity.... $ 363,432 $ 105,945 -- $469,377 $ 18,058 $487,435
---------- ---------- -------------- -------- ----------- ---------
---------- ---------- -------------- -------- ----------- ---------
</TABLE>
13
<PAGE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
A) Represents all relevant statement of operations effects, net of income taxes,
generated by the expected sale of certain Synergy properties to an unrelated
third party. Although a purchase agreement to sell certain properties has
been executed and it is anticipated that such transaction will be
consummated, in the event the Third Party Sale is not closed, pro forma net
income available for common would have been $15,343,000 and $14,040,000; and
pro forma net income per common share would have been $1.73 and $1.58 for
the year ended December 31, 1994 and for the three months ended March 31,
1995, respectively. The following represents the estimated impact on pro
forma net income available for common as presented if the sale does not
occur (in thousands):
<TABLE>
<CAPTION>
YEAR THREE
ENDED MONTHS
12/31/94 ENDED
--------- 3/31/95
INCREASE -----------
(DECREASE)
<S> <C> <C>
Pro forma net income available for common as presented........................... $ 15,300 $ 13,299
--------- -----------
1) Operating income retained............................................ 3,115 1,918
2) Additional reductions in operating costs and expenses................ 610 153
3) Increased general and administrative charge.......................... (750) (188)
4) Increased interest expense........................................... (1,934) (483)
5) Increased income tax expense......................................... (180) (455)
6) Increased dividends on preferred stock............................... (818) (204)
--------- -----------
Subtotal........................................................... 43 741
--------- -----------
Pro forma net income available for common without sale to third party............ $ 15,343 $ 14,040
--------- -----------
--------- -----------
</TABLE>
The following represents the estimated impact on the pro forma balance sheet
at March 31, 1995 as presented if the sale does not occur (in thousands):
<TABLE>
<CAPTION>
3/31/95
-----------
INCREASE
(DECREASE)
<S> <C>
1) Trade receivables................................................... $ 4,598
2) Inventories......................................................... 2,393
3) Property and equipment, net......................................... 13,685
4) Goodwill............................................................ 19,324
-----------
Total Assets...................................................... $ 40,000
-----------
-----------
1) Long-term debt...................................................... 28,000
2) Common stock........................................................ 2,000
3) Preferred stock..................................................... 10,000
-----------
Total Liabilities & Equity........................................ $ 40,000
-----------
-----------
</TABLE>
14
<PAGE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
B) Represents the following breakdown of reductions in operating costs and
expenses principally related to employee positions, corporate administrative
expenses and certain other specifically identified cost savings (in
thousands):
<TABLE>
<CAPTION>
YEAR ENDED THREE
12/31/94 MONTHS
----------- ENDED
3/31/95
INCREASE -----------
(DECREASE)
<S> <C> <C>
Operating expenses --
1) Employee related expenses................................................... $ (1,834) $ (458)
2) Vehicle lease expenses...................................................... (2,047) 730
3) Store consolidations........................................................ (300) (75)
----------- -----------
Total..................................................................... $ (4,181) $ 197
----------- -----------
----------- -----------
General and administrative expenses --
1) Employee related expenses................................................... $ (7,863) $ (1,431)
2) Occupancy costs............................................................. (643) (151)
3) Bank account charges........................................................ (188) (45)
4) Empire Gas general and administrative charge................................ 3,250 812
5) Empire Gas management fee................................................... 500 125
----------- -----------
Total..................................................................... $ (4,944) $ (690)
----------- -----------
----------- -----------
</TABLE>
All general and administrative functions previously performed at Synergy
headquarters would be undertaken by Empire Gas, Inc. under a management
agreement governing the operation of the Synergy properties. (See "Pending
Acquisition of Synergy Group Incorporated.") Under the terms of the
management agreement, Empire Gas will be compensated through a general and
administrative charge and a management fee arrangement.
The vehicle lease expenses are primarily attributable to property owned by
affiliates of existing Synergy shareholders. Such property will be purchased
as a part of the acquisition transaction. The increase in lease expense for
the three months ended March 31, 1995 reflects the net effect of the
elimination of such lease expense and a reversal of the credit to expense
created by a $1,328,000 forgiveness by these same affiliates of accrued
rental obligations. In addition, general and administrative expense savings
include shareholder compensation.
C) Represents additional depreciation and amortization of fixed assets and
intangibles related to the adjustment of assets to fair market value in
accordance with the purchase method of accounting.
D) Represents interest expense savings associated with the retirement of
Synergy's debt as a result of the Acquisition net of additional interest
expense related to NPS issuing new debt securities.
15
<PAGE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
The following table presents a reconciliation of the pro forma interest
expense to the historical interest expense for the year ended December 31,
1994, and the three months ended March 31, 1995 (in thousands):
<TABLE>
<CAPTION>
THREE
MONTHS
YEAR ENDED ENDED
12/31/94 3/31/95
---------- ---------
<S> <C> <C>
Historical interest expense --
NPS....................................................................................... $ 9,670 $ 2,590
Synergy................................................................................... 11,994 2,390
---------- ---------
21,664 4,980
---------- ---------
Add: Interest on short-term bridge financing at an assumed rate of 7.5%.................... 649 162
Interest on new debt securities issued for permanent financing at an assumed rate of
7.5%.................................................................................. 3,639 910
Less: Interest on retired long-term debt of Synergy.................................. (11,792) (2,339)
---------- ---------
Pro forma adjustment........................................................................ (7,504) (1,267)
---------- ---------
Pro forma interest expense.................................................................. $ 14,160 $ 3,713
---------- ---------
---------- ---------
</TABLE>
E) Represents income tax effect of all pro forma adjustments. Such adjustments
assume Synergy will be a separate income tax filing and reporting entity.
F) Represents preferred stock dividend requirements related to the issuance of
new securities as part of the permanent financing. This dividend requirement
is based on an 8.5% pretax rate.
G) The net income of Synergy for the year ended December 31, 1994 includes a
nonrecurring charge of $2,976,000 for debt restructing costs. Had the debt
restructuring not occurred, pro forma net income available for common would
have been $18,276,000; pro forma net income per common share would have been
$2.08; ratio of earnings to fixed charges would have been 2.94x; and ratio
of fixed charges, including preferred dividends would have been 2.42x for
the year ended December 31, 1994.
The net income of Synergy for the three months ended March 31, 1995 includes
a nonrecurring credit to general and administrative expense of $4,326,000
for the reversal of previously accrued shareholders' compensation. Had this
compensation adjustment not been made, pro forma net income available for
common would have been $8,973,000; pro forma net income per common share
would been $1.02; ratio of earnings to fixed charges would have been 4.38x
and ratio of earnings to fixed charges, including preferred dividends would
have been 3.68x for the three months ended March 31, 1995.
In accordance with the current guidelines of the SEC, no minority interest
has been recognized even though NPS will initially own 72.5% of the common
stock of SYN.
H) The Company has calculated the interest coverage ratio pursuant to the
Company's general mortgage indenture and has calculated the ratio of
earnings to fixed charges pursuant to Item 503 of the Commission's
Regulation S-K.
I) Represents the sale of certain assets to an unrelated third party in a
separate transaction.
J) Represents cash purchase price from the unrelated third party sale proceeds.
K) Represents various purchase accounting adjustments to be accounted for in
accordance with the purchase method of accounting.
16
<PAGE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
The following is a detailed allocation of the purchase price and source of
funds, net of underwriting fees, related to the acquisition transaction (in
thousands):
<TABLE>
<S> <C>
Purchase price.......................................................... $ 140,000
Add: Debt, acquisition, and transition costs........................... 5,000
---------
Total............................................................... 145,000
Less: Sale to an unrelated third party................................. 40,000
---------
Adjusted purchase price................................................. $ 105,000
---------
---------
Allocation of purchase price --
Cash.................................................................. $ 4,117
Trade receivables..................................................... 11,089
Inventories........................................................... 6,714
Prepaid expenses and other............................................ 1,137
Property, plant, and equipment........................................ 63,500
Goodwill and other intangibles........................................ 37,446
Accounts payable and accrued expenses................................. (15,995)
Customer deposits..................................................... (935)
Deferred income tax................................................... (373)
Long-term debt........................................................ (1,700)
---------
Net assets acquired................................................. $ 105,000
---------
---------
Source of funds, net --
Long-term debt........................................................ $ 50,004
Company-Obligated Mandatorily Redeemable Preferred Securities of Trust
Subsidiary........................................................... 24,212
Common stock.......................................................... 30,784
---------
Total............................................................... $ 105,000
---------
---------
</TABLE>
L) Represents liabilities and other deferred credits that would be paid with
proceeds of the transaction.
M) Represents the following debt restructuring of the combined companies (in
thousands):
<TABLE>
<S> <C>
Historical long-term debt --
NPS................................................................... $ 129,318
Synergy............................................................... 4,330
---------
Total............................................................... 133,648
---------
Add: New debt offering................................................. 50,004
Less: Retirement of Synergy long-term debt............................. (2,630)
---------
Pro forma adjustment.................................................. 47,374
---------
Pro forma long-term debt.............................................. $ 181,022
---------
---------
</TABLE>
N) Represents the net proceeds expected to be generated by a Company-Obligated
Mandatorily Redeemable Preferred Securities of Trust Subsidiary offering
that is part of the permanent financing. All of the assets of NWPS Capital,
the subsidiary trust, will be approximately $31 million of Subordinated Debt
Securities of the Company which will bear interest at a rate of % per
annum, assuming the issuance of 1.2 million Preferred Securities. Pro Forma
amounts shown in the table reflect the portion of the estimated net proceeds
of the offering of Preferred Securities to be used to fund the Acquisition.
O) Represents the combination of purchase accounting adjustments eliminating
Synergy's common stock investment of $41,000 against the par value of shares
expected to be sold in a common stock offering that is part of the permanent
financing.
17
<PAGE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
The following provides a summary of the net adjustment (in thousands):
<TABLE>
<S> <C>
Par value of shares generated from NPS common stock offering.............. $ 4,309
Less: elimination of Synergy common stock................................ (41)
---------
Net..................................................................... $ 4,268
---------
---------
</TABLE>
P) Represents the combination of purchase accounting adjustments eliminating
Synergy's additional paid-in capital of $5,284,000 against the net proceeds
expected to be allocated to NPS additional paid-in capital as a result of
the common stock offering that is part of the permanent financing.
The following provides a summary of the net adjustment (in thousands):
<TABLE>
<S> <C>
Net allocation to additional paid-in capital from NPS common stock
offering................................................................ $ 26,475
Less: elimination of Synergy additional paid-in capital................. (5,284)
---------
Net.................................................................... $ 21,191
---------
---------
</TABLE>
Q) Represents the elimination of Synergy's remaining equity accounts.
18
<PAGE>
THE NWPS TRUSTS
Each of NWPS Capital Financing I, NWPS Capital Financing II and NWPS Capital
Financing III is a statutory business trust formed under Delaware law pursuant
to (i) a separate declaration of trust ( each, a "Declaration") executed by the
Company, as sponsor for such trust (the "Sponsor"), and the NWPS Trustees (as
defined below) of such trust and (ii) the filing of a separate certificate of
trust with the Secretary of State of the State of Delaware on June 19, 1995.
Each NWPS Trust exists for the exclusive purposes of (i) issuing the Preferred
Securities and common securities representing undivided beneficial interests in
the assets of such NWPS Trust (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities"), (ii) investing the gross proceeds
from the sale of the Trust Securities in the Subordinated Debt Securities of the
Company and (iii) engaging in only those other activities necessary or
incidental thereto. All of the Common Securities will be directly or indirectly
owned by the Company. The Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Preferred Securities, except that, upon
an event of default under the Declaration, the rights of the holders of the
Common Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Preferred Securities. The Company will directly or indirectly
acquire Common Securities in an aggregate liquidation amount equal to 3% of the
total capital of each NWPS Trust. Each NWPS Trust has a term of approximately 55
years but may terminate earlier, as provided in each Declaration. The business
and affairs of each NWPS Trust will be conducted by the trustees (the "NWPS
Trustees") appointed by the Company as the direct or indirect holder of all the
Common Securities. The holder of the Common Securities will be entitled to
appoint, remove or replace any of, or increase or reduce the number of, the NWPS
Trustees of a NWPS Trust. The duties and obligations of the NWPS Trustees for
each NWPS Trust shall be governed by the Declaration for such trust. A majority
of the NWPS Trustees will be persons who are employees or officers of or who are
affiliated with the Company (the "Regular Trustees"). In certain limited
circumstances set forth in the Prospectus Supplement for the Preferred
Securities, the holders of a majority in liquidation amount of the Preferred
Securities will be entitled to appoint one additional Regular Trustee who need
not be an employee or officer of or otherwise affiliated with the Company. One
NWPS Trustee of each NWPS Trust will be a financial institution that is not
affiliated with the Company and has a specified minimum amount of aggregate
capital, surplus, and undivided profits of not less than $50,000,000, which
shall act as property trustee and as indenture trustee for the purposes of the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), pursuant to
the terms set forth in the Prospectus Supplement for the Preferred Securities
(the "Property Trustee"). In addition, unless the Property Trustee maintains a
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable law, one NWPS Trustee of each NWPS Trust will have a
principal place of business or reside in the State of Delaware (the "Delaware
Trustee"). The Company will pay all fees and expenses related to the NWPS Trusts
and the offering of the Trust Securities, the payment of which will be
guaranteed by the Company as described under "Description of the Guarantees"
herein. The Delaware Trustee for each NWPS Trust is Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890. The
principal place of business of each NWPS Trust is c/o the Company, 33 Third
Street S.E., Huron, South Dakota, 57350-1318, telephone (605) 352-8411.
19
<PAGE>
USE OF PROCEEDS
If the Third Party Sale is consummated, the net proceeds from the sale of
$102.5 million of the Offered Securities will be applied to fund the
Acquisition, including certain transaction expenses. The Company will use $50
million of the net proceeds to purchase 50,000 shares of the 15% Series A
Cumulative Preferred Stock of SYN, the subsidiary of the Company formed to
effect the Acquisition, and $52.5 million of the net proceeds will be loaned by
the Company to SYN. If the Third Party Sale is not consummated, the net proceeds
from the sale of $142,500,000 of the Offered Securities will be applied to fund
the Acquisition, including certain transaction expenses. In that case the
Company will use $68 million of the net proceeds to purchase 68,000 shares of
the 15% Series A Cumulative Preferred Stock of SYN and $74.5 million of the net
proceeds will be loaned by NGC to SYN.
Each NWPS Trust will use all of the proceeds received from the sale of its
Preferred Securities to purchase Subordinated Debt Securities from the Company.
The Company intends to add the net proceeds from the sale of the Subordinated
Debt Securities to its general funds, to be used to fund the Acquisition, as
described above, and for other general corporate purposes, as described below.
The net proceeds from the sale of any other Offered Securities will be used
for general corporate purposes, which may include the repayment of indebtedness,
working capital expenditures and other investments in, or acquisitions of,
businesses and assets. Pending application of such net proceeds for specific
purposes, such proceeds may be invested in short-term or marketable securities.
Specific allocations of proceeds to a particular purpose that have been made at
the date of any Prospectus Supplement will be described therein.
In the event the Acquisition is not consummated, the net proceeds from the
sale of the Offered Securities will be used to redeem or acquire and retire
outstanding First Mortgage Bonds (as defined under "Description of the Mortgage
Bonds"), repay short term debt, and for other general corporate purposes, as
described above.
RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred dividends for the Company on an
historical basis for the fiscal years ended December 31, 1994, 1993, 1992, 1991
and 1990, and for the three-month period ended March 31, 1995. Such ratios are
also presented on a pro forma basis for the year ended December 31, 1994 and the
three-month period ended March 31, 1995. For the purpose of calculating such
ratios, "earnings" consist of income from continuing operations before income
taxes, "fixed charges" consist of interest on all indebtedness, amortization of
debt expense and the percentage of rental expense on operating leases deemed
representative of the interest factor and "preferred dividends" represent
dividends paid on all preferred shares outstanding during the periods. See
"Northwestern Public Service Company and Synergy Group Incorporated Pro Forma
Financial Information" for the assumptions upon which the pro forma ratios are
based.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, QUARTER ENDED
--------------------------------------------------------------- MARCH 31,
1990 1991 1992 1993 1994 1995
----- ----- ----- ----- ----- -------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges....... 4.61 4.09 3.42 3.52 3.39 5.09
Ratio of Earnings to Combined Fixed
Charges and Preferred Dividends......... 4.28 3.79 3.33 3.45 3.33 5.00
<CAPTION>
PRO FORMA
--------------------------------
YEAR ENDED QUARTER ENDED
DECEMBER 31, MARCH 31,
1994 1995
----------------- -------------
<S> <C> <C>
Ratio of Earnings to Fixed Charges....... 2.73 5.52
Ratio of Earnings to Combined Fixed
Charges and Preferred Dividends......... 2.25 4.69
</TABLE>
DESCRIPTION OF THE MORTGAGE BONDS
GENERAL
The Mortgage Bonds will be bonds, notes or other evidences of indebtedness
authenticated and delivered under a General Mortgage Indenture and Deed of
Trust, between the Company and The Chase
20
<PAGE>
Manhattan Bank (N.A.) (the "New Mortgage Trustee"), dated as of August 1, 1993.
The New Mortgage Trustee shall act as indenture trustee for the purposes of the
Trust Indenture Act of 1939, as amended. Such General Mortgage and Deed of
Trust, as supplemented by various supplemental indentures, including one or more
supplemental indentures relating to the Mortgage Bonds, is hereinafter referred
to as the "New Mortgage." The summaries under this heading do not purport to be
complete and are subject to the detailed provisions of the New Mortgage.
Capitalized terms used under this heading which are not otherwise defined in
this Prospectus shall have the meanings ascribed thereto in the New Mortgage.
Wherever particular provisions of the New Mortgage or terms defined therein are
referred to, such provisions or definitions are incorporated by reference as a
part of the statements made herein and such statements are qualified in their
entirety by such reference. References to article and section numbers in this
description of the Mortgage Bonds, unless otherwise indicated, are references to
article and section numbers of the New Mortgage.
The New Mortgage provides that additional bonds may be issued thereunder on
the basis of Pledged Bonds (as hereinafter defined), property additions, retired
bonds and cash. (See "Issuance of Additional Mortgage Bonds" below.) The
Mortgage Bonds and all other bonds heretofore or hereafter issued under the New
Mortgage are collectively referred to herein as the "Mortgage Bonds."
Reference is made to the Prospectus Supplement for the Mortgage Bonds for a
description of the following terms of the series of Mortgage Bonds in respect of
which this Prospectus is being delivered: (i) the title (series designation) of
such Mortgage Bonds; (ii) the limit, if any, upon the aggregate principal amount
of such Mortgage Bonds, (iii) the date or dates on which the principal of such
Mortgage Bonds is payable; (iv) the rate or rates at which such Mortgage Bonds
will bear interest, if any; the date or dates from which such interest will
accrue; the dates on which such interest will be payable ("Interest Payment
Dates") and the regular record dates for the interest payable on such Interest
Payment Dates; (v) the bases on which the Mortgage Bonds will be issued; (vi)
the option, if any, of the Company to redeem such Mortgage Bonds and the periods
within which or the dates on which, the prices at which and the terms and
conditions upon which, such Mortgage Bonds may be redeemed, in whole or in part,
upon the exercise of such option; (vii) the obligation, if any, of the Company
to redeem or purchase such Mortgage Bonds pursuant to any sinking fund or
analogous provisions or at the option of the Holder and the periods within which
or the dates on which, the prices at which and the terms and conditions upon
which such Mortgage Bonds will be redeemed, in whole or in part, pursuant to
such obligation; (viii) the denominations in which such Mortgage Bonds will be
issuable; and (ix) any other terms of such Mortgage Bonds not inconsistent with
the provisions of the New Mortgage.
While the New Mortgage contains provisions for the maintenance of the
Mortgaged Property, it does not contain any provisions for a maintenance or
sinking fund and, except as may be provided in a Supplemental Indenture (and
described in the applicable Prospectus Supplement), there will be no provisions
for any such funds for the Mortgage Bonds.
REDEMPTION OF THE MORTGAGE BONDS
Any terms for the optional or mandatory redemption of Mortgage Bonds will be
set forth in the Prospectus Supplement. Except as shall otherwise be provided in
the applicable Prospectus Supplement with respect to Mortgage Bonds redeemable
at the option of the Holder, Mortgage Bonds will be redeemable only upon notice
by mail not less than 30 days prior to the date fixed for redemption, and, if
less than all the Mortgage Bonds of a series, or any tranche thereof, are to be
redeemed, the particular Mortgage Bonds to be redeemed will be selected by such
method as shall be provided for the particular series or tranche, or in the
absence of any such provision, by such method as the Bond Registrar deems fair
and appropriate. (See Sections 5.03 and 5.04.)
Any notice of redemption at the option of the Company may state that such
redemption shall be conditioned upon receipt by the New Mortgage Trustee, on or
prior to the dated fixed for such redemption, of money sufficient to pay the
principal of and premium, if any, and interest, if any, on such Mortgage Bonds
and that if such money has not been so received, such notice will be of no force
and effect and the Company will not be required to redeem such Mortgage Bonds.
(See Section 5.04.)
21
<PAGE>
SECURITY
GENERAL. Except as discussed below, Mortgage Bonds now or hereafter issued
under the New Mortgage will be secured primarily by:
(a) bonds ("First Mortgage Bonds") issued under the Company's Indenture
dated August 1, 1940 (the "First Mortgage"), to The Chase Manhattan Bank
(National Association), successor by merger to The Chase National Bank of
the City of New York, as trustee (the "First Mortgage Trustee"), and C. J.
Heinzelmann, successor to Carl E. Buckley, as individual trustee, and
delivered to the New Mortgage Trustee under the New Mortgage, which First
Mortgage Bonds will be secured, equally and ratably with all other bonds
issued under the First Mortgage, by a valid first lien on substantially all
of the fixed property, franchises and rights of the Company of a character
not expressly excepted from the lien (which excepted property consists
principally of cash, securities, receivables, personal property held for
sale or lease or consumable in operations, and certain real estate held for
resale and not used or useful in the public utility business of the
Company), subject to permitted encumbrances and liens as defined in the
First Mortgage; and
(b) the lien of the New Mortgage on the Company's properties used in the
generation, production, transmission or distribution of electricity or the
distribution of gas in any form and for any purpose in the States of South
Dakota or Nebraska, together with the properties owned by the Company as of
August 1, 1993 located in the States of North Dakota and Iowa which consist
principally of shared ownership interests in electric generating facilities
(the Company does not serve customers in the States of North Dakota and
Iowa), but not, unless the Company otherwise elects, any future acquired
properties in the States of North Dakota and Iowa, which lien is junior to
the lien of the First Mortgage.
As discussed below under "Pledged Bonds," following a merger or
consolidation of another corporation into the Company, the Company could deliver
to the New Mortgage Trustee bonds issued under an existing mortgage on the
properties of such other corporation in lieu of or in addition to bonds issued
under the First Mortgage. In such event, the Mortgage Bonds would be secured,
additionally, by such bonds and by the lien of the New Mortgage on the
properties of such other corporation, which would be junior to the liens of such
existing mortgage and the First Mortgage. The First Mortgage and all such other
mortgages are hereinafter, collectively, called the "Class "A" Mortgages," and
all bonds issued under the Class "A" Mortgages and delivered to the New Mortgage
Trustee are hereinafter collectively called the "Pledged Bonds." If and when no
Class "A" Mortgages are in effect, the New Mortgage will constitute a first
mortgage lien on all property of the Company subject thereto.
PLEDGED BONDS. The Pledged Bonds will be issued and delivered to, and
registered in the name of, the New Mortgage Trustee or its nominee and will be
owned and held by the New Mortgage Trustee, subject to the provisions of the New
Mortgage, for the benefit of the Holders of all Mortgage Bonds Outstanding from
time to time, and the Company will have no interest in such Pledged Bonds.
Except as may be otherwise set forth in the supplemental indenture pursuant to
which any Mortgage Bonds are to be issued, Pledged Bonds issued as the basis for
the authentication and delivery of such Mortgage Bonds (a) will mature on the
same dates, and in the same principal amounts, as such Mortgage Bonds, and (b)
will contain, in addition to any mandatory redemption provisions applicable to
all Pledged Bonds Outstanding under the related Class "A" Mortgage, mandatory
redemption provisions correlative to provisions for mandatory redemption, or for
redemption at the option of the Holder, of such Mortgage Bonds. Pledged Bonds
issued as the basis for authentication and delivery of a series or tranche of
Mortgage Bonds (x) may, but need not, bear interest, any such interest to be
payable at the same times as interest on the Mortgage Bonds of such series or
tranche, and (y) may, but need not, contain provisions for the redemption
thereof at the option of the Company, any such redemption to be made at a
redemption price or prices not less than the principal amount of such Pledged
Bonds. (See Sections 4.02 and 7.01.)
Any payment by the Company of principal of or premium or interest on the
Pledged Bonds held by the New Mortgage Trustee will be applied by the New
Mortgage Trustee to the payment of any principal, premium or interest, as the
case may be, in respect of the Mortgage Bonds which is then due, and, to the
extent of such application, the obligation of the Company under the New Mortgage
to make such payment in
22
<PAGE>
respect of the Mortgage Bonds will be deemed satisfied and discharged. If, at
the time of any such payment of principal of Pledged Bonds, there shall be no
principal then due in respect to the Mortgage Bonds, the proceeds of such
payment will be deemed to constitute Funded Cash and will be held by the New
Mortgage Trustee as part of the New Mortgaged Property, to be withdrawn, used or
applied as provided in the New Mortgage. If, at the time of any such payment of
premium or interest on Pledged Bonds, there shall be no premium or interest, as
the case may be, then due in respect of the Mortgage Bonds, the proceeds of such
payment will be remitted to the Company at its request. (See Section 7.02 and
"Withdrawal of Cash" below.) Any payment by the Company of principal of or
premium or interest on Mortgage Bonds authenticated and delivered on the basis
of the deposit with the New Mortgage Trustee of Pledged Bonds (other than by
application of the proceeds in respect of such Pledged Bonds) will, to the
extent thereof, be deemed to satisfy and discharge the obligation of the
Company, if any, to make a payment of principal, premium or interest, as the
case may be, in respect of such Pledged Bonds which is then due.
The New Mortgage Trustee may not sell, assign or otherwise transfer any
Pledged Bonds except to a successor trustee under the New Mortgage. (See Section
7.04.) At the time any Mortgage Bonds of any series or tranche which have been
authenticated and delivered upon the basis of Pledged Bonds cease to be
Outstanding (other than as a result of the application of the proceeds of the
payment or redemption of such Pledged Bonds), the New Mortgage Trustee shall
surrender to or upon the order of the Company an equal principal amount of such
Pledged Bonds having the same Stated Maturity and mandatory redemption
provisions as such Mortgage Bonds. (See Section 7.03.)
At the date of this Prospectus, the only Class "A" Mortgage is the First
Mortgage and the only Pledged Bonds issuable at this time are First Mortgage
Bonds issuable thereunder. The New Mortgage provides that in the event of the
merger or consolidation of another company with or into the Company, an existing
mortgage constituting a lien on properties of such other company prior to the
lien of the New Mortgage may be designated by the Company as an additional Class
"A" Mortgage. Bonds thereafter issued under such additional mortgage would be
Pledged Bonds and could provide the basis for the authentication and delivery of
Mortgage Bonds under the New Mortgage. (See Section 7.06.) When no Pledged Bonds
are Outstanding under a Class "A" Mortgage except for Pledged Bonds held by the
New Mortgage Trustee, then, at the request of the Company and subject to
satisfaction of certain conditions, the New Mortgage Trustee will surrender such
Pledged Bonds for cancellation, and the related Class "A" Mortgage will be
satisfied and discharged, the lien of such Class "A" Mortgage on the Company's
property will cease to exist and the priority of the lien of the New Mortgage
will be increased. (See Section 7.07.)
The New Mortgage contains no restrictions on the issuance of bonds under
Class "A" Mortgages in addition to Pledged Bonds issued to the New Mortgage
Trustee as the basis for the authentication and delivery of Mortgage Bonds.
First Mortgage Bonds may currently be issued under the First Mortgage on the
basis of property additions, retirements of bonds previously issued under the
First Mortgage and cash deposited with the First Mortgage Trustee. As of July
27, 1995, $47,500,000 of First Mortgage Bonds (other than Pledged Bonds) were
outstanding.
LIEN OF THE NEW MORTGAGE. The properties of the Company used in the
generation, production, transmission and distribution of electricity and the
distribution of gas in any form and for any purpose in the States of South
Dakota or Nebraska together with properties owned by the Company as of August 1,
1993 located in the States of North Dakota and Iowa (but not, unless the Company
otherwise elects, any future acquired properties in the States of North Dakota
and Iowa) are subject to the lien of the New Mortgage. Substantially all of such
property, while subject to the lien of the New Mortgage, will be also subject to
the prior lien of the First Mortgage. The Mortgage Bonds will have the benefit
of the prior lien of the First Mortgage on such property, and the benefit of the
prior lien of any additional Class "A" Mortgage on any property subject thereto,
to the extent of the aggregate principal amount of Pledged Bonds, issued under
the respective Class "A" Mortgages, held by the New Mortgage Trustee.
The lien of the New Mortgage is subject to Permitted Liens which include tax
liens and other governmental charges which are not delinquent and which are
being contested, construction and materialmen's liens, certain judgment liens,
easements, reservations and rights of others (including governmental entities)
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in, and defects of title in, certain property of the Company, certain leasehold
interests, liens on the Company's pollution control and sewage and solid waste
facilities and certain other liens and encumbrances. (See Section 1.01.)
There are excepted from the lien of the New Mortgage, among other things,
cash and securities not paid to, deposited with or held by the New Mortgage
Trustee under the New Mortgage; contracts, leases and other agreements of all
kinds, contract rights, bills, notes and other instruments, accounts receivable,
claims, certain intellectual property rights and other general intangibles;
permits, licenses and franchises; automobiles, other vehicles, movable
equipment, aircraft and vessels; all goods, wares and merchandise held for sale
in the ordinary course of business or for use by or for the benefit of the
Company; fuel, materials, supplies and other personal property consumable in the
operations of the Company's business; computers, machinery and equipment; coal,
ore, gas, oil, minerals and timber mined or extracted from the land; gas
transmission lines connecting wells with main or branch trunk lines or field
gathering lines connecting wells with main or branch trunk lines; electric
energy, gas, steam, water and other products generated, produced or purchased;
leasehold interests; and all books and records. (See Granting Clauses.) The
First Mortgage contains similar, but not identical, exceptions.
Without the consent of the Holders, the Company and the New Mortgage Trustee
may enter into supplemental indentures to subject to the lien of the New
Mortgage additional property, whether or not used in the electric or gas utility
businesses (including property which would otherwise be excepted from such
lien). (See Section 14.01.) Such property, so long as the same would otherwise
constitute Property Additions (as described below), would thereupon constitute
Property Additions and be available as a basis for the issuance of Mortgage
Bonds. (See "Issuance of Additional Mortgage Bonds" below.)
The New Mortgage contains provisions subjecting after-acquired property to
the lien thereof, subject to the prior lien of the First Mortgage. These
provisions are limited in the case of consolidation or merger (whether or not
the Company is the surviving corporation) or sale of substantially all of the
Company's assets. In the event of consolidation or merger or the transfer of all
the mortgaged property as or substantially as an entirety, the New Mortgage will
not be required to be a lien upon any of the properties then owned or thereafter
acquired by the successor corporation, except properties acquired from the
Company in or as a result of such transaction and improvements, extensions and
additions to such properties and renewals, replacements and substitutions of or
for any part or parts of such properties. (See Article Thirteen and
"Consolidation, Merger, Conveyance, Transfer or Lease" below.) In addition,
after-acquired property may be subject to vendors' liens, purchase money
mortgages and other liens thereon at the time of acquisition thereof, including
the lien of any Class "A" Mortgage.
The New Mortgage provides that the New Mortgage Trustee will have a lien,
prior to the lien on behalf of the holders of Mortgage Bonds, upon Mortgaged
Property and any money collected by the New Mortgage Trustee as proceeds of the
Mortgaged Property, for the payment of its reasonable compensation and expenses
and for indemnity against certain liabilities. (See Section 11.07.)
ISSUANCE OF ADDITIONAL MORTGAGE BONDS
The maximum principal amount of Mortgage Bonds which may be issued under the
New Mortgage is limited to $500,000,000, provided that, without the consent of
the Holders, the Company and the New Mortgage Trustee may enter into
supplemental indentures to increase such amount. (See Sections 3.01 and 14.01.)
Mortgage Bonds of any series may be issued from time to time under Article Four
of the New Mortgage on the basis of, and in an aggregate principal amount not
exceeding:
(1) the aggregate principal amount of Pledged Bonds issued and delivered
to the Trustee;
(2) 75% of the Cost or Fair Value (whichever is less) of Property
Additions (as described below) which do not constitute Bonded Property
Additions (being, generally, Property Additions which have been made the
basis of the authentication and delivery of Mortgage Bonds, the release of
mortgaged property or cash withdrawals) after certain deductions and
additions, primarily including adjustments to offset property retirements;
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(3) the aggregate principal amount of Retired Bonds (which consist of
Mortgage Bonds no longer Outstanding under the New Mortgage (including
Mortgage Bonds deposited under any sinking or analogous funds) which have
not been used for certain other purposes under the New Mortgage and which
are not to be paid, redeemed or otherwise retired by the application of
Funded Cash), but if Pledged Bonds have been made the basis for the
authentication and delivery of such Retired Bonds, only if the related Class
"A" Mortgage has been discharged; and
(4) an amount of cash deposited with the Trustee.
In general, the issuance of Mortgage Bonds is subject to Adjusted New
Earnings of the Company for 12 consecutive months within the preceding 18 months
being at least one and three-fourths the Annual Interest Requirements on all
Mortgage Bonds at the time Outstanding, Mortgage Bonds then applied for, all
outstanding Pledged Bonds other than Pledged Bonds held by the New Mortgage
Trustee under the New Mortgage, and all other indebtedness (with certain
exceptions) secured by a lien prior to the lien of the New Mortgage, except that
no such net earnings requirement need be met if the additional Mortgage Bonds to
be issued are to have no Stated Interest Rate prior to Maturity. The Company is
not required to satisfy the net earnings requirement prior to issuance of
Mortgage Bonds as provided in (1) above if the Pledged Bonds issued and
delivered to the New Mortgage Trustee as the basis for such issuance have been
authenticated and delivered under the related Class "A" Mortgage on the basis of
retired Pledged Bonds unless (a) the Stated Maturity of such retired Pledged
Bonds is a date more than five years after the date of the Company Order
requesting the authentication and delivery of such Mortgage Bonds and (b) the
Stated Interest Rate, if any, on such retired Pledged Bonds immediately prior to
Maturity is less than the Stated Interest Rate, if any, on such Mortgage Bonds
to be in effect upon the initial authentication and delivery thereof. In
addition, the Company is not required to satisfy the net earnings requirement
prior to issuance of Mortgage Bonds as provided in (3) above unless (a) the
Stated Maturity of the Retired Bonds is a date more than five years after the
date of the Company Order requesting the authentication and delivery of such
Mortgage Bonds and (b) the Stated Interest Rate, if any, on such Retired Bonds
immediately prior to Maturity is less than the Stated Interest Rate, if any, on
such Mortgage Bonds to be in effect upon the initial authentication and delivery
of such Mortgage Bonds. In general, the interest requirement with respect to
variable interest rate indebtedness, if any, is determined with reference to the
rate or rates in effect on the date immediately preceding such determination or
the rate to be in effect upon initial authentication. (See Section 1.03 and
Article Four).
Adjusted Net Earnings are calculated before, among other things, provisions
for income taxes; depreciation or amortization of property; interest on any
indebtedness and amortization of debt discount and expense; any non-recurring
charge to income of whatever kind or nature (including without limitation the
recognition of expense or impairment due to the non-recoverability of assets or
expense), whether or not recorded as a non-recurring item in the Company's books
of account; and any refund of revenues previously collected or accrued by the
Company subject to possible refund. With respect to Mortgage Bonds of a series
subject to a Periodic Offering (such as a medium-term note program), the New
Mortgage Trustee will be entitled to receive a certificate evidencing compliance
with the net earnings requirements only once, at or prior to the time of the
first authentication and delivery of the Mortgage Bonds of such series (unless
the Company Order requesting the authentication and delivery of such Mortgage
Bonds is delivered on or after the date which is two years after the most recent
Net Earnings Certificate was delivered, in which case an updated certificate
would be required to be delivered). (See Sections 1.03 and 4.01.)
Property Additions generally include any property which is owned by the
Company and is subject to the lien of the New Mortgage, except any property the
cost of acquisition or construction of which is properly chargeable to an
operating expense account of the Company. (See Section 1.04.)
Unless otherwise provided in the applicable Prospectus Supplement, the
Company will issue the Mortgage Bonds on the basis of Pledged Bonds (I.E., First
Mortgage Bonds) issued under its First Mortgage.
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RELEASE OF PROPERTY
The Company may obtain the release from the lien of the New Mortgage of any
Mortgaged Property if the Fair Value of all of the Mortgaged Property (excluding
the Mortgaged Property to be released but including any Mortgaged Property to be
acquired by the Company with the proceeds of, or otherwise in connection with,
such release) equals or exceeds an amount equal to twenty-fifteenths (20/15ths)
of the aggregate principal amount of Mortgage Bonds Outstanding and bonds issued
under Class "A" Mortgages outstanding (other than Pledged Bonds).
The New Mortgage provides simplified procedures for the release of property
which has been released from the lien of a Class "A" Mortgage, minor properties
and property taken by eminent domain, and provides for dispositions of certain
obsolete property and grants or surrender of certain rights without any release
or consent by the New Mortgage Trustee.
If any property released from the lien of the New Mortgage continues to be
owned by the Company after such release, the New Mortgage will not become a lien
on any improvement, extension or addition to such property or renewals,
replacements or substitutions of or for any part or parts of such property. (See
Article Eight.)
WITHDRAWAL OF CASH
Subject to certain limitations, cash held by the New Trustee may (1) be
withdrawn by the Company (a) to the extent of the Cost or Fair Value (whichever
is less) of Unbonded Property Additions, after certain deductions and additions
primarily including adjustments to offset retirements, or (b) in an amount equal
to twenty-fifteenths (20/15ths) of the aggregate principal amount of Mortgage
Bonds that the Company would be entitled to issue on the basis of Retired Bonds
(with the entitlement to such issuance being waived by operation of such
withdrawal), or (c) in an amount equal to twenty-fifteenths (20/15ths) of the
aggregate principal amount of any Outstanding Mortgage Bonds delivered to the
New Trustee, or (2) upon the request of the Company, be applied to (a) the
purchase of Mortgage Bonds (at prices not exceeding twenty-fifteenths (20/15ths)
of the principal amount thereof) or (b) the redemption or payment at Stated
Maturity of Mortgage Bonds (with any Mortgage Bonds received by the New Trustee
pursuant to these provisions being canceled by the New Trustee) (see Section
8.06); provided, however, that cash deposited with the New Mortgage Trustee as
the basis for the authentication and delivery of Mortgage Bonds, as well as cash
representing a payment of principal of Pledged Bonds, may only be withdrawn in
an amount equal to the aggregate principal amount of Mortgage Bonds the Company
would be entitled to issue on any basis (with the entitlement to such issuance
being waived by operation of such withdrawal), or may, upon the request of the
Company, be applied to the purchase, redemption or payment of Mortgage Bonds at
prices not exceeding, in the aggregate, the principal amount thereof (See
Sections 4.05 and 7.02).
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
The Company may not consolidate with or merge into any other corporation or
convey, transfer or lease the Mortgaged Property as or substantially as an
entirety to any person unless (a) such transaction is on such terms as will
fully preserve the lien and security of the New Mortgage and the rights and
powers of the New Mortgage Trustee and Holders, (b) 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, the Mortgaged Property as
or substantially as an entirety is a corporation organized and existing under
the laws of the United States of America or any state or territory thereof or
the District of Columbia, and such corporation executes and delivers to the New
Mortgage Trustee a supplemental indenture, which contains an assumption by such
corporation of the due and punctual payment of the principal of and premium, if
any, and interest, if any, on the Mortgage Bonds and the performance of all of
the covenants of the Company under the New Mortgage and which contains a grant,
conveyance, transfer and mortgage by the corporation confirming the lien of the
New Mortgage on the Mortgaged Property and subjecting to such lien all property
thereafter acquired by the corporation which shall constitute an improvement,
extension or addition to the Mortgaged Property or a renewal, replacement or
substitution of or for any part thereof, and, at the election of the
corporation, subjecting to the lien of the New Mortgage such other property then
owned or thereafter acquired by the
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corporation as the corporation shall specify, and (c) in the case of a lease,
such lease will be made expressly subject to termination by the Company or the
New Mortgage Trustee at any time during the continuance of an Event of Default.
(See Section 13.01.)
Other than the security afforded by the lien of the First Mortgage and the
New Mortgage and the restrictions on the issuance of additional First Mortgage
Bonds and New Mortgage Bonds, there are no provisions of the First Mortgage or
the New Mortgage which afford the holders of the Offered Bonds protection in the
event of a highly leveraged transaction, reorganization, restructuring, merger
or similar transaction involving the Company. Neither the First Mortgage nor the
New Mortgage contain provisions requiring the repurchase of the Offered Bonds
upon a change in control of the Company.
MODIFICATION OF NEW MORTGAGE
Without the consent of any Holders, the Company and the New Mortgage Trustee
may enter into one or more supplemental indentures for any of the following
purposes:
(a) to evidence the succession of another person to the Company and the
assumption by any such successor of the covenants of the Company in the New
Mortgage and in the Mortgage Bonds; 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, Mortgage Bonds
of one or more specified series, or one or more tranches thereof, or to
surrender any right or power conferred upon the Company by the New Mortgage;
or
(c) to correct or amplify the description of any property at any time
subject to the lien of the New Mortgage, or better to assure, convey and
confirm to the New Mortgage Trustee any property subject or required to be
subjected to the lien of the New Mortgage, or to subject to the lien of the
New Mortgage additional property; or
(d) to convey, transfer and assign to the New Mortgage Trustee and to
subject to the lien of the New Mortgage with the same force and effect as if
included in the New Mortgage, property of subsidiaries of the Company used
or to be used for one or more purposes which if owned by the Company would
constitute property used or to be used for one or more of the Primary
Purposes of the Company's Business, which property shall for all purposes of
the New Mortgage be deemed to be property of the Company, together with such
other provisions as may be appropriate to express the respective rights of
the New Mortgage Trustee and the Company in regard thereto; or
(e) to change or eliminate any provision of the New Mortgage or to add
any new provision to the New Mortgage, provided that if such change,
elimination or addition adversely affects the interests of the Holders of
the Mortgage Bonds of any series or tranche in any material respect, such
change, elimination or addition will become effective with respect to such
series or tranche only when no Mortgage Bond of such series or tranche
remains outstanding under the New Mortgage; or
(f) to establish the form or terms of the Mortgage Bonds of any series
or tranche as permitted by the New Mortgage; 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 by a
successor trustee or by a co-trustee or separate trustee; 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 or tranche of, the Mortgage Bonds; or
(j) to change any place where (1) the principal of and premium, if any,
and interest, if any, on the Mortgage Bonds of any series, or any tranche
thereof, will be payable, (2) any Mortgage Bonds of any series, or any
tranche thereof, may be surrendered for registration of transfer, (3) any
Mortgage Bonds
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of any series, or any tranche thereof, may be surrendered for exchange, and
(4) notices and demands to or upon the Company in respect of the Mortgage
Bonds of any series, or any tranche thereof, and the New Mortgage may be
served; or
(k) to cure any ambiguity, to correct or supplement any provision
therein which may be defective or inconsistent with any other provision
therein, or to make any changes to the provisions thereof or to add other
provisions with respect to matters and questions arising under the New
Mortgage, so long as such other changes or additions do not adversely affect
the interests of the Holders of Mortgage Bonds of any series or tranche in
any material respect; or
(l) to reflect changes in Generally Accepted Accounting Principles; or
(m) to provide the terms and conditions of the exchange or conversion,
at the option of the holders of Mortgage Bonds of any series, of the
Mortgage Bonds of such series for or into Mortgage Bonds of other series or
stock or other securities of the Company or any other corporation; or
(n) to change the words "Mortgage Bonds" to "First Mortgage Bonds" in
the descriptive title of all Outstanding Bonds at any time after the
discharge of the First Mortgage; or
(o) to comply with the rules or regulations of any national securities
exchange on which any of the Mortgage Bonds may be listed; or
(p) to modify Section 3.01(a) to increase the aggregate principal amount
of Mortgage Bonds which may be authenticated and delivered under the New
Mortgage. (See Section 14.01.)
Without limiting the generality of the foregoing, if the Trust Indenture Act
is amended after the date of the New Mortgage in such a way as to require
changes to the New Mortgage 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 New Mortgage or at any time thereafter, were required
by the Trust Indenture Act to be contained in the New Mortgage, the Company and
the New Mortgage Trustee may, without the consent of any Holders, enter into one
or more supplemental indentures to evidence or effect such amendment. (See
Section 14.01.)
Except as provided above, the consent of the Holders of not less than a
majority in aggregate principal amount of the Mortgage Bonds 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 New Mortgage pursuant to one or more supplemental indentures; provided,
however, if less than all of the series of Mortgage Bonds 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 Mortgage
Bonds of all series so directly affected, considered as one class, will be
required; and provided, further, that if the Mortgage Bonds of any series have
been issued in more than one tranche and if the proposed supplemental indenture
directly affects the rights of the Holders of one or more, but less than all,
such tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Mortgage Bonds of all tranches so directly
affected, considered as one class, will be required; and provided, further, that
no such amendment or modification may, without the consent of each Holder of the
Outstanding New Mortgage of each series or tranche directly affected thereby,
(a) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Mortgage Bond, or reduce the principal amount
thereof or the rate of interest thereon (or the amount of any installment of
interest thereon) or change the method of calculating such rate or reduce any
premium payable upon the redemption thereof, or reduce the amount of the
principal of a Discount Bond that would be due and payable upon a declaration of
acceleration of maturity or change the coin or currency (or other property) in
which any Mortgage Bond 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 thereof (or, in the case of redemption, on or after
the redemption date), (b) permit the creation of any lien ranking prior to the
lien of the New Mortgage with respect to all or substantially all of the
Mortgaged Property or terminate the lien of the New Mortgage on all or
substantially all of the Mortgaged Property, or deprive such Holder of the
benefit of the security of the lien of the New Mortgage, (c) reduce the
percentage in principal amount of the Outstanding Mortgage Bonds of such series
or tranche, the consent of the Holders of which is required for any such
supplemental
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indenture, or the consent of the Holder of which is required for any waiver of
compliance with any provision of the New Mortgage or any default thereunder and
its consequences, or reduce the requirements for quorum or voting, or (d) modify
certain of the provisions of the New Mortgage relating to supplemental
indentures, waiver of certain covenants and waivers of past defaults. A
supplemental indenture which changes or eliminates any covenant or other
provision of the New Mortgage which has expressly been included solely for the
benefit of the Holders of, or which is to remain in effect only so long as there
shall be Outstanding Mortgage Bonds of one or more specified series, or one or
more tranches thereof, or modifies the rights of the Holders of Mortgage Bonds
of such series or tranches with respect to such covenant or other provision,
will be deemed not to affect the rights under the New Mortgage of the Holders of
the Mortgage Bonds of any other series or tranche. (See Section 14.02.)
WAIVER
The Holders of at least a majority in aggregate principal amount of all
Mortgage Bonds may waive the Company's obligations to comply with certain
covenants, including the Company's obligation to maintain its corporate
existence and properties, pay taxes and discharge liens, maintain certain
insurance and to make such recordings and filings as are necessary to protect
the security of the Holders and the rights of the New Mortgage Trustee, provided
that such waiver occurs before the time such compliance is required. The Holders
of at least a majority of the aggregate principal amount of Outstanding Mortgage
Bonds of all affected series or tranches, considered as one class, may waive,
before the time for such compliance, compliance with the Company's obligation to
maintain an office or agency where the Mortgage Bonds of such series or tranches
may be surrendered for payment, registration, transfer or exchange, and
compliance with any other covenant specified in a supplemental indenture
respecting such series or tranches. (See Section 6.09.)
EVENTS OF DEFAULT
Each of the following events constitutes an Event of Default under the New
Mortgage:
(1) failure to pay interest on any Mortgage Bond within 60 days after
the same becomes due;
(2) failure to pay principal or premium, if any, on any Mortgage Bond
within 15 days after its Maturity;
(3) failure to perform or breach of any covenant or warranty of the
Company in the New Mortgage (other than a covenant or a warranty a default
in the performance of which or breach of which is dealt with elsewhere under
this paragraph) for a period of 60 days after there has been given to the
Company by the New Mortgage Trustee, or to the Company and the New Mortgage
Trustee by the Holders of at least 50% in principal amount of Outstanding
Mortgage Bonds, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default," unless the New Mortgage Trustee, or the New Mortgage Trustee and
the Holders of a principal amount of Mortgage Bonds not less than the
principal amount of Mortgage Bonds the Holders of which gave such notice, as
the case may be, agree in writing to an extension of such period prior to
its expiration; provided, however, that the New Mortgage Trustee, or the New
Mortgage Trustee and such Holders, as the case may be, will be deemed to
have agreed to an extension of such period if corrective action has been
initiated by the Company within such period and is being diligently pursued;
(4) certain events relating to reorganization, bankruptcy and insolvency
of the Company and appointment of a receiver or trustee for its property; or
(5) the occurrence of a Matured Event of Default under any Class "A"
Mortgage; provided that the waiver or cure of any such Matured Event of
Default and the rescission and annulment of the consequences thereof shall
constitute a waiver of the corresponding Event of Default under the New
Mortgage and a rescission and annulment of the consequences thereof. (See
Section 10.01.)
REMEDIES
If an Event of Default occurs and is continuing, then the New Mortgage
Trustee or the Holders of not less than a majority in principal amount of
Mortgage Bonds then Outstanding may declare the principal
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amount (or if the Mortgage Bonds are Discount Bonds, such portion of the
principal amount as may be provided for such Discount Bonds pursuant to the
terms of the New Mortgage) of all of the Mortgage Bonds together with premium,
if any, and interest accrued, if any, thereon to be immediately due and payable.
At any time after such declaration of the maturity of the Mortgage Bonds then
Outstanding, but before the sale of any of the Mortgaged Property and before a
judgment or decree for payment of money shall have been obtained by the New
Mortgage Trustee as provided in the New Mortgage, 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 New Mortgage Trustee a
sum sufficient to pay:
(1) all overdue interest, if any, on all Mortgage Bonds then
Outstanding;
(2) the principal of and premium, if any, on any Mortgage Bonds then
Outstanding which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed
therefor in such Mortgage Bonds; and
(3) all amounts due to the New Mortgage Trustee as compensation and
reimbursement as provided in the New Mortgage; and
(b) any other Event or Events of Default other than the non-payment of
the principal of Mortgage Bonds which shall have become due solely by such
declaration of acceleration, shall have been cured or waived as provided in
the New Mortgage. (See Sections 10.02 and 10.17.)
The New Mortgage provides that, under certain circumstances and to the
extent permitted by law, if an Event of Default occurs and is continuing, the
New Mortgage Trustee has the power to take possession of, and to hold, operate
and manage, the Mortgaged Property, or with or without entry, sell the Mortgaged
Property. If the Mortgaged Property is sold, whether by the New Mortgage Trustee
or pursuant to judicial proceedings, the principal of the Outstanding Mortgage
Bonds, if not previously due, will become immediately due, together with
premium, if any, and any accrued interest. (See Sections 10.03, 10.04 and
10.05.)
If an Event of Default occurs and is continuing, the Holders of a majority
in principal amount of the Mortgage Bonds then Outstanding will have the right
to direct the time, method and place of conducting any proceedings for any
remedy available to the New Mortgage Trustee or exercising any trust or power
conferred on the New Mortgage Trustee, provided that (a) such direction does not
conflict with any rule of law or with the New Mortgage, and could not involve
the New Mortgage Trustee in personal liability in circumstances where indemnity
would not, in the New Mortgage Trustee's sole discretion, be adequate, (b) such
direction is not unduly prejudicial to the rights of the nonassenting Holders,
and (c) the New Mortgage Trustee may take any other action deemed proper by the
New Mortgage Trustee which is not inconsistent with such discretion. (See
Section 10.16.)
The New Mortgage provides that no Holder of any Mortgage Bond will have any
right to institute any proceeding, judicial or otherwise, with respect to the
New Mortgage, or for the appointment of a receiver or trustee, or for any other
remedy thereunder, unless (a) such Holder has previously given to the New
Mortgage Trustee written notice of a continuing Event of Default; (b) the
Holders of not less than a majority in aggregate principal amount of the
Mortgage Bonds then Outstanding have made written request to the New Mortgage
Trustee to institute proceedings in respect of such Event of Default and have
offered the New Mortgage Trustee reasonable indemnity against cost and
liabilities incurred in complying with such request; and (c) for 60 days after
receipt of such notice, the New Mortgage Trustee has failed to institute any
such proceeding and no direction inconsistent with such request has been given
to the New Mortgage Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of Mortgage Bonds then Outstanding.
Furthermore, no Holder will be entitled to institute any such action if and to
the extent that such action would disturb or prejudice the rights of other
Holders. (See Section 10.11.) Notwithstanding that the right of a Holder to
institute a proceeding with respect to the New Mortgage is subject to certain
conditions precedent, each Holder of a Mortgage Bond has the right, which is
absolute and unconditional, to receive payment of the principal of and premium,
if any, and interest, if any, on such Mortgage Bond when
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due and to institute suit for the enforcement of any such payment, and such
rights may not be impaired without the consent of such Holder. (See Section
10.12.) The New Mortgage provides that the New Mortgage Trustee give the Holders
notice of any default under the New Mortgage to the extent required by the Trust
Indenture Act, unless such default shall have been cured or waived, except that
no such notice to Holders of a default of the character described in paragraph
(3) under "Events of Default" shall be given until at least 45 days after the
occurrence thereof. (See Section 11.02.) The Trust Indenture Act currently
permits the New Mortgage Trustee to withhold notice of default (except for
certain payment defaults) if the New Mortgage Trustee in good faith determines
the withholding of such notice to be in the interests of the Holders.
As a condition precedent to certain actions by the New Mortgage Trustee in
the enforcement of the lien of the New Mortgage and institution of action on the
Mortgage Bonds, the New Mortgage Trustee may require adequate indemnity against
costs, expense and liabilities to be incurred in connection therewith. (See
Sections 10.11 and 11.01.)
In addition to every other right and remedy provided in the New Mortgage,
the New Mortgage Trustee may exercise any right or remedy available to the New
Mortgage Trustee in its capacity as owner and holder of Pledged Bonds which
arises as a result of a default or Matured Event of Default under any Class "A"
Mortgage, whether or not an Event of Default under the New Mortgage has then
occurred and is continuing. (See Section 10.20.)
DEFEASANCE
Any Mortgage Bond or Bonds, or any portion of the principal amount thereof,
will be deemed to have been paid for purposes of the New Mortgage, and the
entire indebtedness of the Company in respect thereof will be deemed to have
been satisfied and discharged, if there has been irrevocably deposited with the
New Mortgage Trustee, in trust: (a) money (including Funded Cash) in the amount
which will be sufficient, or (b) Eligible Obligations (as described below),
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
monies which will be sufficient, or (c) a combination of (a) and (b) which will
be sufficient, to pay when due the principal of and premium, if any, and
interest, if any, due and to become due on such Mortgage Bond or Bonds or
portions thereof. (See Section 9.01.) For this purpose, Eligible 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.
While there is no legal precedent directly on point, it is possible that,
for federal income tax purposes, any deposit contemplated in the preceding
paragraph could be treated as a taxable exchange of the related Mortgage Bonds
for an issue of obligations of the trust or a direct interest in the cash and
securities held in the trust. In that case, Holders of such Mortgage Bonds would
recognize gain or loss as if the trust obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their Mortgage Bonds. Such Holders thereafter would be required to include
in income a share of the income, gain or loss of the trust. The amount so
required to be included in income could be different from the amount that would
be includible in the absence of such deposit. Prospective investors are urged to
consult their own tax advisors as to the specific consequences to them of such
deposit.
RESIGNATION OF THE NEW MORTGAGE TRUSTEE
The New Mortgage 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 Mortgage Bonds then Outstanding delivered to the
New Mortgage Trustee and the Company. No resignation or removal of the New
Mortgage 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 New Mortgage. In addition, 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, under certain circumstances, if
the Company has delivered to the New Mortgage Trustee a resolution of its Board
of Directors appointing a successor trustee
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and such successor has accepted such appointment in accordance with the terms of
the New Mortgage, the New Mortgage Trustee will be deemed to have resigned and
the successor will be deemed to have been appointed as trustee in accordance
with the New Mortgage. (See Section 11.10.)
CONCERNING THE NEW MORTGAGE TRUSTEE
The Chase Manhattan Bank (N.A.), the Trustee under the New Mortgage, has
been a regular depositary of funds of the Company. As trustee under both the New
Mortgage and the First Mortgage, The Chase Manhattan Bank (N.A.) would have a
conflicting interest for purposes of the Trust Indenture Act if an Event of
Default were to occur under either mortgage. In that case, the New Mortgage
Trustee may be required to eliminate such conflicting interest by resigning
either as New Mortgage Trustee or as First Mortgage Trustee. There are other
instances under the Trust Indenture Act which would require the resignation of
the New Mortgage Trustee, such as an affiliate of the New Mortgage Trustee
acting as underwriter with respect to any of the Mortgage Bonds.
TRANSFER
The transfer of the Mortgage Bonds may be registered, and Mortgage Bonds may
be exchanged for other Mortgage Bonds of the same series and tranche, of
authorized denominations and of like tenor and aggregate principal amount, at
the office of The Chase Manhattan Bank (N.A.), as Bond Registrar for the
Mortgage Bonds, in Brooklyn, New York. The Company may change the place for
registration of transfer of the Mortgage Bonds, may appoint one or more
additional Bond Registrars (including the Company) and may remove any Bond
Registrar, all at its discretion. (See Section 6.02.) The applicable Prospectus
Supplement will identify any new place for registration of transfer and
additional Bond Registrar appointed, and will disclose the removal of any Bond
Registrar effected, prior to the date of such Prospectus Supplement. Except as
otherwise provided in the applicable Prospectus Supplement, no service charge
will be made for any transfer or exchange of the Mortgage Bonds, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of the Mortgage Bonds. The Company will not be required to issue, and
no Bond Registrar will be required to register, the transfer of or to exchange
(a) Mortgage Bonds of any series (including the Mortgage Bonds) during a period
of 15 days prior to giving any notice of redemption, or (b) any Mortgage Bond
selected for redemption in whole or in part, except the unredeemed portion of
any Mortgage Bond being redeemed in part. (See Section 3.05.)
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Subordinated Debt Securities to which any Prospectus Supplement may relate.
The particular terms of the Subordinated Debt Securities offered by any
Prospectus Supplement and the extent, if any, to which such general terms and
provisions may apply to the Subordinated Debt Securities so offered will be
described in the Prospectus Supplement relating to such Debt Securities.
The Subordinated Debt Securities may be issued, in one or more series, from
time to time under an Indenture dated as of , 1995 (the
"Indenture"), between the Company and The Chase Manhattan Bank N.A., as trustee
(the "Indenture Trustee"), which shall act as indenture trustee for the purposes
of the Trust Indenture Act of 1939, as amended. The form of the Indenture is
filed as an exhibit to the Registration Statement. Capitalized terms used in
this section which are not otherwise defined in this Prospectus shall have the
meanings set forth in the Indenture.
The following summaries of certain provisions of the Subordinated Debt
Securities and the Indenture do not purport to be complete and are subject to,
and are qualified in their entirety by express reference to all the provisions
of the Indenture, including the definitions therein of certain terms.
GENERAL
The Subordinated Debt Securities will be direct, unsecured, subordinated
obligations of the Company.
The Indenture does not limit the aggregate principal amount of Subordinated
Debt Securities that may be issued thereunder and provides that Subordinated
Debt Securities may be issued thereunder from time to
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time in one or more series. The Subordinated Debt Securities are issuable in one
or more series pursuant to an indenture supplement to the Indenture or a
resolution of the Company's Board of Directors or a special committee thereof
(each, a "Supplemental Indenture").
The Restated Certificate of Incorporation of the Company limits, subject to
certain exceptions, the amount of unsecured indebtedness that the Company may
issue or assume, without the consent of the holders of a majority of the total
number of shares of preferred stock then outstanding, to 25% of the aggregate of
(i) the total principal amount of all outstanding bonds or other securities
representing secured indebtedness of the Company, and (ii) the total of the
capital stocks and premiums thereon and the surplus of the Company as then
stated on the Company's books. At March 31, 1995, the Company could have issued
approximately $57 million of unsecured indebtedness (such as the Subordinated
Debt Securities) without violating this provision.
Reference is made to the Prospectus Supplement relating to any Subordinated
Debt Securities being offered for, among other things, the following terms
thereof: (1) the title of the Subordinated Debt Securities; (2) any limit on the
aggregate principal amount of such Subordinated Debt Securities; (3) the
percentage of the principal amount at which such Subordinated Debt Securities
will be issued and, if other than the principal amount thereof, the portion of
the principal amount thereof payable upon acceleration of the maturity thereof,
or the method by which such portion shall be determined; (4) the date or dates
on which the principal of such Subordinated Debt Securities will be payable; (5)
the rights, if any, to defer payments of interest on the Subordinated Debt
Securities by extending the interest payment period, and the duration of such
extensions; (6) the subordination terms of the Subordinated Debt Securities of
such series; (7) the rate or rates at which such Subordinated Debt Securities
will bear interest, or the method by which such rate or rates shall be
determined, and the date or dates from which such interest shall accrue, or the
method by which such date or dates shall be determined; (8) the dates on which
such interest will be payable and the Regular Record Dates for any Interest
Payment Dates and the basis on which interest shall be calculated; (9) the
dates, if any, on which, the price or prices at which the Subordinated Debt
Securities may, pursuant to any mandatory or optional sinking fund provisions,
be redeemed by the Company and other detailed terms and provisions of such
sinking funds; (10) the date, if any, after which, and the price or prices at
which, the Subordinated Debt Securities may, pursuant to any optional redemption
provisions, be redeemed at the option of the Company or of the Holder thereof,
and other detailed terms and provisions of such optional redemption; (11)
whether and under what circumstances the Company will pay Additional Amounts as
contemplated by Section 1005 of the Indenture on such Subordinated Debt
Securities to any Holder who is not a United States person (including any
modification to the definition of such term as provided for in the Indenture as
originally executed) in respect to any tax, assessment or governmental charge
and, if so, whether the Company will have the option to redeem such Subordinated
Debt Securities rather than pay such Additional Amounts (and the terms of any
such option); (12) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to such Subordinated
Debt Securities, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein; (13) any
security for such Subordinated Debt Securities; and (14) any other terms of such
Subordinated Debt Securities. For a description of the terms of any series of
the Subordinated Debt Securities, reference must be made to both the Prospectus
Supplement relating thereto and to the description of Subordinated Debt
Securities set forth herein.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Subordinated Debt Securities will be issued in United States dollars in
fully registered form, without coupons, in denominations of $25 or any integral
multiple thereof. No service charge will be made for any transfer or exchange of
the Subordinated Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the principal of, and any premium or interest on, the Subordinated Debt
Securities will be payable, and the Subordinated Debt Securities will be
exchangeable and transfers thereof will be registrable, at the Place of Payment;
provided that, at the option of the Company, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears in the
Security Register.
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The Indenture does not contain any provisions that may afford the Holders of
Subordinated Debt Securities protection in the event of a highly leveraged
transaction or other transaction involving the Company that may occur in
connection with a takeover attempt resulting in a decline in the credit rating
of the Subordinated Debt Securities. The Indenture also does not contain any
provisions that would limit the ability of the Company to incur indebtedness.
REGISTRATION AND TRANSFER
Subordinated Debt Securities will be issued as Registered Securities and
either will be in certificated form or will be represented by Global Securities.
Registered Securities will be issuable in denominations of $25 and integral
multiples of $25 or in such other denominations as may be in the terms of the
Subordinated Debt Securities.
Registered Securities will be exchangeable for other Registered Securities
of the same series and of a like aggregate principal amount and tenor of
different authorized denominations. Registered Securities may be presented for
registration of transfer (duly endorsed or accompanied by a written instrument
of transfer), at the corporate trust office of the Indenture Trustee in New
York, New York, or at the office of any transfer agent designated by the Company
for such purpose with respect to any series of Subordinated Debt Securities and
referred to in any Prospectus Supplement. No service charge will be made for any
transfer or exchange of Subordinated Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. If any Prospectus Supplement refers to
any transfer agent (in addition to the Indenture Trustee) initially designated
by the Company with respect to any series of Subordinated Debt Securities, the
Company may at any time rescind the designation of any such transfer agent or
approve a change in the location at which any such transfer agent acts, except
that, if Subordinated Debt Securities of a series are issuable solely as
Registered Securities, the Company will be required to maintain a transfer agent
in each Place of Payment for such series. The Company may at any time designate
additional transfer agents with respect to any series of Subordinated Debt
Securities.
In the event of any redemption of any Subordinated Debt Securities, the
Company shall not be required to: (i) issue, register the transfer of or
exchange any Subordinated Debt Securities during a period beginning at the
opening of business 15 days before any selection of Subordinated Debt Securities
of that series to be redeemed and ending at the close of business on the day of
mailing of the relevant notice of redemption; (ii) register the transfer of or
exchange any Subordinated Debt Securities, or portion thereof, called for
redemption, except the unredeemed portion of any Subordinated Debt Security
being redeemed in part; or (iii) issue, register the transfer of or exchange any
Subordinated Debt Securities that has been surrendered for repayment at the
option of the Holder, except the portion if any, thereof not to be so repaid.
GLOBAL SECURITIES
The Subordinated Debt Securities of a series may be issued in whole or in
part in the form of one or more Global Securities (as such term is defined
below), which will be deposited with, or on behalf of, a depositary (the
"Depositary") or its nominee identified in the applicable Prospectus Supplement.
In such case, one or more Global Securities will be issued in a denomination or
aggregate denomination equal to the portion of the aggregate principal amount of
outstanding Subordinated Debt Securities of the series to be represented by such
Global Security or Global Securities. Unless and until it is exchanged in whole
or in part for Subordinated Debt Securities in registered form, a Global
Security may not be registered for transfer or exchange except as (i) a whole by
the Depositary for such Global Security to a nominee of such Depositary, by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary, or by any nominee to a successor Depositary or
a nominee of such successor Depositary, and (ii) in the circumstances described
in the applicable Prospectus Supplement. The term "Global Security," when used
with respect to any series of Subordinated Debt Securities, means a Debt
Security that is executed by the Company and authenticated and delivered by the
Indenture Trustee to the Depositary or pursuant to the Depositary's instruction,
which shall be registered in the name of the Depositary or its nominee and which
shall represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all
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of the Outstanding Subordinated Debt Securities of such series or any portion
thereof, in either case having the same terms, including, without limitation,
the same original issue date, date or dates on which principal is due, and
interest rate or method of determining the interest rate.
The specific terms of the depositary arrangement with respect to any portion
of a series of Subordinated Debt Securities to be represented by a Global
Security will be described in the applicable Prospectus Supplement. The Company
expects that the following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement,
Subordinated Debt Securities that are to be represented by a Global Security to
be deposited with or on behalf of a Depositary will be represented by a Global
Security registered in the name of such Depositary or its nominee. Upon the
issuance of such Global Security, and the deposit of such Global Security with
or on behalf of the Depositary for such Global Security, the Depositary will
credit on its book-entry registration and transfer system the respective
principal amounts of the Subordinated Debt Securities represented by such Global
Security to the accounts of institutions that have accounts with such Depositary
or its nominee ("participants"). The accounts to be credited will be designated
by the underwriters or agents of such Subordinated Debt Securities or, if such
Subordinated Debt Securities are offered and sold directly by the Company, by
the Company. Ownership of beneficial interests in such Global Security will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial interests by participants in such Global Security will
be shown on, and the transfer of that ownership interest will be effected only
through, records maintained by the Depositary or its nominee for such Global
Security. Ownership of beneficial interests in such Global Security by persons
that hold through participants will be shown on, and the transfer of that
ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Subordinated
Debt Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in the applicable Prospectus Supplement,
owners of beneficial interests in such Global Security will not be entitled to
have Subordinated Debt Securities of the series represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Subordinated Debt Securities of such series in certificated
form and will not be considered the Holders thereof for any purposes under the
Indenture. Accordingly, each person owning a beneficial interest in such Global
Security must rely on the procedures of the Depositary and, if such person is
not a participant, on the procedures of the participant through which such
person owns its interest to exercise any rights of a Holder under the Indenture.
The Company understands that under existing industry practices, if the Company
requests any action of Holders or an owner of a beneficial interest in such
Global Security desires to give any notice or take any action a Holder is
entitled to give or take under the Indenture, then the Depositary would
authorize the participants to give such notice or take such action, and
participants would authorize beneficial owners owning through such participants
to give such notice or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
CONSOLIDATION, MERGER AND SALE
The Indenture does not contain any covenant which restricts the Company's
ability to merge or consolidate with or into any other corporation, sell or
convey all or substantially all of its assets to any person, firm or corporation
or otherwise engage in restructuring transactions.
EVENTS OF DEFAULT
The Indenture provides, with respect to any series of Subordinated Debt
Securities outstanding thereunder, that any one or more of the following events
that has occurred and is continuing shall constitute an
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Event of Default: (i) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Subordinated Debt Security of that
series, or of any coupon appertaining thereto, when the same becomes due and
payable and continues for 30 days; provided, however, that, a valid extension of
the interest payment period by the Company for the Subordinated Debt Securities
shall not constitute a default in the payment of interest for this purpose, and
provided further that, if Subordinated Debt Securities are issued to a NWPS
Trust, or a trustee of such trust, in connection with the issuance of Trust
Securities by such NWPS Trust, said 30-day period will be replaced by a ten-day
period; (ii) default in the payment of the principal of or any premium on any
Subordinated Debt Security of that series when due, whether at maturity, upon
redemption, by declaration or otherwise; provided, however, that, a valid
extension of the maturity of the Subordinated Debt Securities shall not
constitute a default for this purpose; (iii) default in the deposit of any
sinking fund payment, when and as due by the terms of any Subordinated Debt
Securities of that series; (iv) default in the performance or breach of any
covenant or agreement of the Company in the Indenture with respect to any
Subordinated Debt Security of that series, continued for 60 days after written
notice to the Company from the Indenture Trustee or from the holders of at least
25% of the outstanding Subordinated Debt Securities of that series; (v) certain
events in bankruptcy, insolvency or reorganization of the Company; (vi) the
voluntary or involuntary dissolution, winding-up or termination of a NWPS Trust
to which (or to a trustee of such trust to which) Subordinated Debt Securities
were issued in connection with the issuance of Trust Securities by such NWPS
Trust, except in connection with the distribution of Subordinated Debt
Securities to the holders of Trust Securities in liquidation of such NWPS Trust,
the redemption of all of the Trust Securities of such NWPS Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration
of such NWPS Trust; and (vii) any other Event of Default provided with respect
to Subordinated Debt Securities of that series. The Company is required to file
annually with the Indenture Trustee an officer's certificate as to the Company's
compliance with all conditions and covenants under the Indenture. The Indenture
provides that the Indenture Trustee may withhold notice to the Holders of
Subordinated Debt Securities of any default, except in the case of a default on
the payment of the principal of (or premium), if any, or interest on any
Subordinated Debt Securities or the payment of any sinking fund installment with
respect to such Subordinated Debt Securities if it considers it in the interest
of the Holders of Subordinated Debt Securities to do so.
If an Event of Default, other than certain events with respect to
bankruptcy, insolvency and reorganization of the Company or any Significant
Subsidiary, occurs and is continuing with respect to Subordinated Debt
Securities of a particular series, the Indenture Trustee or the Holders of not
less than 25% in principal amount of Outstanding Subordinated Debt Securities of
that series may declare the Outstanding Subordinated Debt Securities of that
series due and payable immediately. If an Event of Default with respect to
certain events of bankruptcy, insolvency or reorganization of the Company or any
Significant Subsidiary with respect to Subordinated Debt Securities of a
particular series shall occur and be continuing, then the principal of all the
Outstanding Subordinated Debt Securities of that series, and accrued and unpaid
interest thereon, shall automatically be due and payable without any act on the
part of the Indenture Trustee or any Holder.
Subject to the provisions relating to the duties of the Indenture Trustee,
if an Event of Default with respect to Subordinated Debt Securities of a
particular series occurs and is continuing, the Indenture Trustee shall 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 of Subordinated Debt Securities of
such series, unless such Holders shall have offered to the Indenture Trustee
reasonable indemnity and security against the costs, expenses and liabilities
that might be incurred by it in compliance with such request. Subject to such
provisions for the indemnification of the Indenture Trustee, the Holders of a
majority in principal amount of the Outstanding Subordinated Debt 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 Indenture Trustee
under the Indenture, or exercising any trust or power conferred on the Indenture
Trustee with respect to the Subordinated Debt Securities of that series. The
Indenture Trustee may refuse to follow directions in conflict with law or the
Indenture that may involve the Indenture Trustee in personal liability or may be
unduly prejudicial to Holders not joining therein.
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The Holders of not less than a majority in principal amount of the
Outstanding Subordinated Debt Securities of any series may, on behalf of the
Holders of all the Subordinated Debt Securities of such series and any related
coupons, waive any past default under the Indenture with respect to such series
and its consequences, except a default (i) in the payment of the principal of
(or premium, if any) or interest on or Additional Amounts payable in respect of
any Subordinated Debt Security of such series unless such default has been cured
and a sum sufficient to pay all matured installments of interest and principal
due otherwise than by acceleration and any applicable premium has been deposited
with the Indenture Trustee or (ii) in respect of a covenant or provision that
cannot be modified or amended without the consent of the Holder of each
Outstanding Subordinated Debt Security of such series affected thereby.
MODIFICATION OR WAIVER
Modification and amendment of the Indenture may be made by the Company and
the Indenture Trustee with the consent of the Holders of not less than a
majority in principal amount of all Outstanding Subordinated Debt Securities or
any series that are affected by such modification or amendment; provided that,
no such modification or amendment may, without the consent of the Holder of each
Outstanding Subordinated Debt Security of such series, among other things, (i)
change the Stated Maturity of the principal of (or premium, if any, on) or any
installment of principal of or interest on any Subordinated Debt Security of
such series, (ii) reduce the principal amount or the rate of interest on or any
Additional Amounts payable in respect of, or any premium payable upon the
redemption of, any Subordinated Debt Security of such series, or change the
redemption provisions of any Subordinated Debt Securities (iii) change any
obligation of the Company to pay Additional Amounts in respect of any
Subordinated Debt Security of such series, (iv) reduce the amount of principal
of a Subordinated Debt Security of such series that is an Original Issue
Discount Security and would be due and payable upon a declaration of
acceleration of the Maturity thereof, (v) adversely affect any right of
repayment at the option of the Holder of any Subordinated Debt Security of such
series, (vi) change the place or currency of payment of principal of, or any
premium or interest on, any Subordinated Debt Security of such series, (vii)
impair the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof or any Redemption Date or Repayment Date
therefor, (viii) reduce the above-stated percentage of Holders of Outstanding
Subordinated Debt Securities of such series necessary to modify or amend the
Indenture or to consent to any waiver thereunder or reduce the requirements for
voting or quorum described below, (ix) modify the change of control provisions,
if any, or (x) modify the foregoing requirements or reduce the percentage of
Outstanding Subordinated Debt Securities of such series necessary to waive any
past default.
Modification and amendment of the Indenture may be made by the Company and
the Indenture Trustee without the consent of any Holder, for any of the
following purposes: (i) to evidence the succession of another person to the
Company as obligor under the Indenture; (ii) to add to the covenants of the
Company for the benefit of the Holders of all or any series of Subordinated Debt
Securities; (iii) to add Events of Default for the benefit of the Holders of all
or any series of Subordinated Debt Securities; (iv) to change or eliminate any
provisions of the Indenture, provided that any such change or elimination shall
become effective only when there are no Outstanding Subordinated Debt Securities
of any series created prior thereto that are entitled to the benefit of such
provision; (v) to establish the form or terms of Subordinated Debt Securities of
any series; (vi) to secure the Subordinated Debt Securities; (vii) to provide
for the acceptance of appointment by a successor Indenture Trustee or facilitate
the administration of the trusts under the Indenture by more than one Indenture
Trustee; and (viii) to close the Indenture with respect to the authentication
and delivery of additional series of Subordinated Debt Securities, or to cure
any ambiguity, defect or inconsistency in the Indenture, provided such action
does not adversely affect the interest of Holders of Subordinated Debt
Securities of any series.
CERTAIN COVENANTS
If Subordinated Debt Securities are issued to a NWPS Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such NWPS
Trust and (i) there shall have occurred any event that would constitute an Event
of Default or (ii) the Company shall be in default with respect to its payment
of any obligations under the related Guarantee or Common Securities Guarantee,
then (a) the Company shall not declare or pay dividends on, or make a
distribution with respect to or redeem, purchase or acquire, or make a
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liquidation payment with respect to, any of its capital stock, and (b) the
Company shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by the Company that
rank pari passu with or junior to such Subordinated Debt Securities; provided,
however, that, restriction (a) above does not apply to any stock dividends paid
by the Company where the dividend stock is the same stock as that on which the
dividend is being paid.
If Subordinated Debt Securities are issued to a NWPS Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such NWPS
Trust, and the Company shall have given notice of its election to defer payments
of interest on such Subordinated Debt Securities by extending the interest
payment period as provided in the Indenture and such period, or any extension
thereof, shall be continuing then (a) the Company shall not declare or pay
dividends on, or make a distribution with respect to or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital
stock, and (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company that rank pari passu with or junior to such Subordinated Debt
Securities; provided, however, that, the restriction (a) above does not apply to
any stock dividends paid by the Company, where the dividend stock is the same as
that on which the dividend is being paid.
If Subordinated Debt Securities are issued to a NWPS Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such NWPS
Trust, for so long as such Trust Securities remain outstanding, the Company will
covenant (i) to directly or indirectly maintain 100% ownership of the Common
Securities of such NWPS Trust; provided, however, that any permitted successor
of the Company under the Indenture may succeed to the Company's ownership of
such Common Securities and (ii) to use its reasonable efforts to cause such NWPS
Trust (a) to remain a statutory business trust, except in connection with the
distribution of Subordinated Debt Securities to the holders of Trust Securities
in liquidation of such NWPS Trust, the redemption of all of the Trust Securities
of such NWPS Trust, or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration of such NWPS Trust, and (b) to otherwise continue
to be classified as a grantor trust for United States federal income tax
purposes.
SECURITY AND SUBORDINATION
Any security for the Subordinated Debt Securities will be described in the
Prospectus Supplement that will accompany this Prospectus. The Subordinated Debt
Securities will be subordinated and junior in right of payment to certain other
indebtedness of the Company to the extent set forth in the Prospectus Supplement
that will accompany this Prospectus.
GOVERNING LAW
The Indenture and the Subordinated Debt Securities will be governed by, and
construed in accordance with, the internal laws of the State of New York.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Indenture
Trustee is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Subordinated Debt Securities, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities that might be incurred thereby. The Indenture Trustee is not
required to expand or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Indenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
DEFEASANCE
The Indenture provides that, except as may be provided in respect of any
series of Subordinated Debt Securities, the provisions of Article Fourteen shall
apply to the Subordinated Debt Securities of any series and the Company may
elect either to (a) except in respect of any Subordinated Debt Securities to
which a NWPS Trust or a trustee of such trust is the holder, defease and be
discharged from any and all obligations with respect to such Subordinated Debt
Securities (except for the obligation to pay Additional Amounts, if any, to a
holder who is not a United States person upon the occurrence of certain events
of tax, assessment or
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governmental charge with respect to payments on such Subordinated Debt
Securities and the obligations to register the transfer or exchange of such
Subordinated Debt Securities, to replace temporary or mutilated, destroyed, lost
or stolen Subordinated Debt Securities, to maintain an office or agency in
respect of such Subordinated Debt Securities, and to hold moneys for payment in
trust) ("Defeasance") or (b) be released from its obligations with respect to
such Subordinated Debt Securities under Section 1402 or, if provided pursuant to
Section 1403 of the Indenture, its obligations with respect to any other
covenant, and any omission to comply with such obligations shall not constitute
a default or an Event of Default with respect to such Subordinated Debt
Securities ("covenant defeasance"), in either case, upon the irrevocable deposit
by the Company with the Indenture Trustee (or other qualifying trustee), in
trust, of an amount, in such Currency in which such Subordinated Debt Securities
are then specified as payable at Stated Maturity, or Government Obligations (as
defined below), or both, applicable to such Subordinated Debt Securities (with
such applicability being determined on the basis of the currency, currency unit
or composite currency in which such Subordinated Debt Securities are then
specified as payable at Stated Maturity) which through the scheduled payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of (and premium, if any) and interest, if
any, on such Subordinated Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor.
Such a trust may only be established if, among other things, the Company has
delivered to the Indenture Trustee an Opinion of Counsel (as specified in the
Indenture) to the effect that the Holders of such Subordinated Debt Securities
will not recognize income, gain or loss for United States federal income tax
purposes as a result of such defeasance or covenant defeasance and will be
subject to United States federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such defeasance or
covenant defeasance had not occurred; provided that, such Opinion of Counsel, in
the case of defeasance under clause (a) above, must refer to and be based upon a
revenue ruling of the Internal Revenue Service or a change in applicable United
States federal income tax law occurring after the date of the Indenture.
"Government Obligations" means securities that are (i) direct obligations of
the government that issued the Currency in which the Subordinated Debt
Securities of a particular series are payable, for the payment of which its full
faith and credit is pledged, or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the government that
issued the Currency in which the Subordinated Debt Securities of such series are
payable, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America or such other government,
which, in either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or
trust company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of a depository receipt;
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest in or principal of the Government
Obligation evidenced by such depository receipt.
Unless otherwise provided in the Prospectus Supplement, if, after the
Company has deposited funds and/or Government Obligations to effect defeasance
or covenant defeasance relating thereto with respect to Subordinated Debt
Securities of any series, (a) the Holder of a Subordinated Debt Security of such
series is entitled to and does elect, pursuant to the terms of such Subordinated
Debt Security, to receive payment in a currency other than that in which such
deposit has been made in respect of such Subordinated Debt Security or (b) the
currency in which such deposit has been made in respect of any Subordinated Debt
Security of such series ceases to be used by its government of issuance, then
the indebtedness represented by such Subordinated Debt Security shall be deemed
to have been, and will be, fully discharged and satisfied through the payment of
the principal of (and premium, if any) and interest, if any, on such
Subordinated Debt Security as they become due out of the proceeds yielded by
converting the amount so deposited in respect of such Subordinated Debt Security
into the Currency in which such Subordinated Debt Security becomes
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payable as a result of such election or such cessation of usage based on the
applicable Market Exchange Rate. Unless otherwise provided in the Prospectus
Supplement, all payments of principal of (and premium, if any) and interest, if
any, and Additional Amounts, if any, on any Subordinated Debt Security that is
payable in a Foreign Currency that ceases to be used by its government of
issuance shall be made in U. S. Dollars.
In the event the Company effects covenant defeasance with respect to (i) any
Subordinated Debt Securities and any related coupons and (ii) such Subordinated
Debt Securities are declared due and payable because of the occurrence of any
Event of Default, other than the Event of Default described in clause (iii) or
(v) under "Events of Default," with respect to any covenant for which there has
been defeasance, the Currency and/or Government Obligations on deposit with the
Indenture Trustee will be sufficient to pay amounts due on such Subordinated
Debt Securities at the time of their Stated Maturity but may not be sufficient
to pay amounts due on such Subordinated Debt Securities at the time of the
acceleration resulting from such Event of Default. However, the Company would
remain liable to make payment of such amounts due at the time of acceleration.
The Prospectus Supplement may further describe the provisions, if any,
permitting such defeasance or covenant defeasance, including any modifications
to the provisions described above, with respect to the Subordinated Debt
Securities of or within a particular series and any related coupons.
MISCELLANEOUS
The Company will have the right at all times to assign any of its respective
rights or obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of the Company; provided, that, in the event of any such assignment,
the Company will remain liable for all of their respective obligations. Subject
to the foregoing, the Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto.
DESCRIPTION OF THE PREFERRED SECURITIES
Each NWPS Trust may issue, from time to time, only one series of Preferred
Securities having terms described in the Prospectus Supplement relating thereto.
The Declaration of each NWPS Trust authorizes the Regular Trustees of such NWPS
Trust to issue on behalf of such NWPS Trust one series of Preferred Securities.
The Declaration will be qualified as an indenture under the Trust Indenture Act.
The Preferred Securities will have such terms, including distributions,
redemption, voting, liquidation rights and such other preferred, deferred or
other special rights or such restrictions as shall be set forth in the
Declaration or made part of the Declaration by the Trust Indenture Act.
Reference is made to the Prospectus Supplement relating to the Preferred
Securities of a NWPS Trust for specific terms, including (i) the distinctive
designation of such Preferred Securities, (ii) the number of Preferred
Securities issued by such NWPS Trust, (iii) the annual distribution rate (or
method of determining such rate) for Preferred Securities issued by such NWPS
Trust and the date or dates upon which such distributions shall be payable
(provided, however, that, distributions on such Preferred Securities shall be
payable on a quarterly basis to holders of such Preferred Securities as of a
record date in each quarter during which such Preferred Securities are
outstanding), (iv) whether distributions on Preferred Securities issued by such
NWPS Trust shall be cumulative, and, in the case of Preferred Securities having
such cumulative distribution rights, the date or dates or method of determining
the date or dates from which distributions on Preferred Securities issued by
such NWPS Trust shall be cumulative, (v) the amount or amounts which shall be
paid out of the assets of such NWPS Trust to the holders of Preferred Securities
of such NWPS Trust upon voluntary or involuntary dissolution, winding-up or
termination of such NWPS Trust, (vi) the obligation, if any, of such NWPS Trust
to purchase or redeem Preferred Securities issued by such NWPS Trust and the
price or prices at which, the period or periods within which and the terms and
conditions upon which Preferred Securities issued by such NWPS Trust shall be
purchased or redeemed, in whole or in part, pursuant to such obligation, (vii)
the voting rights, if any, of Preferred Securities issued by such NWPS Trust in
addition to those required by law, including the number of votes per Preferred
Security and any
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requirement for the approval by the holders of Preferred Securities, or of
Preferred Securities issued by one or more NWPS Trusts or of both, as a
condition to specified action or amendments to the Declaration of such NWPS
Trust, and (viii) any other relevant rights, preferences, privileges,
limitations or restrictions of Preferred Securities issued by such NWPS Trust
consistent with the Declaration of such NWPS Trust, or with applicable law. All
Preferred Securities offered hereby will be guaranteed by the Company to the
extent set forth below under "Description of the Guarantees." Certain United
States federal income tax considerations applicable to any offering of Preferred
Securities will be described in the Prospectus Supplement relating thereto.
In connection with the issuance of Preferred Securities, each NWPS Trust
will issue one series of Common Securities. The Declaration of each NWPS Trust
authorizes the Regular Trustees of each trust to issue on behalf of such NWPS
Trust one series of Common Securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as shall be set
forth therein. The terms of the Common Securities issued by a NWPS Trust will be
substantially identical to the terms of the Preferred Securities issued by such
NWPS Trust and the Common Securities will rank pari passu, and payments will be
made thereon pro rata with the Preferred Securities except that, upon an event
of default under the Declaration, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. Except in certain limited circumstances, the Common
Securities will also carry the right to vote and to appoint, remove or replace
any of the NWPS Trustees of a NWPS Trust. All of the Common Securities of a NWPS
Trust will be directly or indirectly owned by the Company.
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees that
will be executed and delivered by the Company for the benefit of the holders,
from time to time, of Preferred Securities. Each Guarantee will be qualified as
an indenture under the Trust Indenture Act. Wilmington Trust Company will act as
indenture trustee under each Guarantee (the "Guarantee Trustee"). The terms of
each Guarantee will be those set forth in each Guarantee and those made part of
each Guarantee by the Trust Indenture Act. The 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 form of Guarantee, which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
the Trust Indenture Act. Each Guarantee will be held by the Guarantee Trustee
for the benefit of the holders of the Preferred Securities of the applicable
NWPS Trust.
GENERAL
Pursuant to each Guarantee, the Company will irrevocably and unconditionally
agree, to the extent set forth herein, to pay in full to the holders of the
Preferred Securities issued by a NWPS Trust, the Guarantee Payments (as defined
herein) (except to the extent paid by such NWPS Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which such NWPS
Trust may have or assert. The following payments with respect to Preferred
Securities issued by a NWPS Trust (the "Guarantee Payments"), to the extent not
paid by such NWPS Trust will be subject to the Guarantee (without duplication):
(i) any accrued and unpaid distributions that are required to be paid on such
Preferred Securities, to the extent the Company has made a payment of interest
or principal on the Subordinated Debt Securities, (ii) the redemption price,
including all accrued and unpaid distributions to the date of redemption (the
"Redemption Price"), to the extent the Company has made a payment of interest or
principal on the Subordinated Debt Securities, with respect to any Preferred
Securities called for redemption by such NWPS Trust, and (iii) upon a voluntary
or involuntary dissolution, winding-up or termination of such NWPS Trust (other
than in connection with the distribution of Subordinated Debt Securities to the
holders of Preferred Securities or the redemption of all of the Preferred
Securities upon the maturity or redemption of the Subordinated Debt Securities)
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid distributions on such Preferred Securities to the date of payment to the
extent such NWPS Trust has funds legally available therefor and (b) the amount
of assets of such NWPS Trust remaining available for distribution to
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holders of such Preferred Securities in liquidation of such NWPS Trust. 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 such NWPS Trust to pay such amounts to such holders.
Each Guarantee will be a full and unconditional guarantee with respect to
the Preferred Securities issued by the applicable NWPS Trust from the time of
issuance of such Preferred Securities but will not apply to any payment of
distributions due to the extent such NWPS Trust shall lack funds legally
available therefor as a result of a failure by the Company to make payments of
interest or principal on the Subordinated Debt Securities. If the Company does
not make interest payments on the Subordinated Debt Securities purchased by such
NWPS Trust, such NWPS Trust will not pay distributions on the Preferred
Securities issued by a NWPS Trust and will not have funds legally available
therefor. See "Description of the Subordinated Debt Securities."
The Company and NWPS Capital believe that the above mechanisms and
obligations, taken together, are substantially equivalent to a full and
unconditional guarantee by the Company of payments due on the Preferred
Securities.
The Company has also agreed to irrevocably and unconditionally guarantee the
obligations of the NWPS Trusts with respect to the Common Securities (the
"Common Securities Guarantee") to the same extent as the Guarantees, except
that, upon an event of default under the Indenture, holders of Preferred
Securities under the Guarantees shall have priority over holders of Common
Securities under the Common Securities Guarantees with respect to distributions
and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In each Guarantee, the Company will covenant that, so long as any Preferred
Securities issued by the applicable NWPS Trust remain outstanding, if there
shall have occurred any event that would constitute an event of default under
such Guarantee or the Declaration of such NWPS Trust, then (a) the Company shall
not declare or pay any dividend on, or make any distribution with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company which rank pari passu with or junior to such
Subordinated Debt Securities. However, each Guarantee will except from the
foregoing any stock dividends paid by the Company where the dividend stock is of
the same as that on which the dividend is being paid.
MODIFICATION OF THE GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of Preferred Securities (in which case no vote will be
required), each Guarantee may be amended only with the prior approval of the
holders of not less than 66 2/3% in liquidation amount of the outstanding
Preferred Securities issued by the applicable NWPS Trust. The manner of
obtaining any such approval of holders of such Preferred Securities will be set
forth in an accompanying Prospectus Supplement. All guarantees and agreements
contained in a Guarantee shall bind the successors, assignees, receivers,
trustees and representatives of the Company and shall inure to the benefit of
the holders of the Preferred Securities of the applicable NWPS Trust then
outstanding.
EVENTS OF DEFAULT
An Event of Default under the Guarantee will occur upon the failure of the
Company to perform any of its payments or other obligations thereunder. The
holders of a majority in liquidation amount of the Preferred Securities to which
a Guarantee relates 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.
If the Guarantee Trustee fails to enforce such Guarantee, any holder of
Preferred Securities relating to such Guarantee may, after such holder's written
request to the Guarantee Trustee to enforce the Guarantee, institute a legal
proceeding directly against the Company to enforce the Guarantee Trustee's
rights under such Guarantee without first instituting a legal proceeding against
the relevant NWPS Trust, the Guarantee Trustee or any other person or entity.
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The Company 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 each of the Guarantees and as to any default in such performance.
The Company is required to file annually with the Guarantee Trustee an
officer's certificate as to the Company's compliance with all conditions under
each of the Guarantees.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to a Guarantee, shall exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by a Guarantee 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.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate as to the Preferred Securities issued by the
applicable NWPS Trust upon full payment of the Redemption Price of all Preferred
Securities of the NWPS Trust, upon distribution of the Subordinated Debt
Securities held by the NWPS Trust to the holders of the Preferred Securities of
such NWPS Trust, or upon full payment of the amounts payable in accordance with
the Declaration of such NWPS Trust upon liquidation of such NWPS Trust. Each
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Preferred Securities issued by the applicable
NWPS Trust must restore payment of any sums paid under such Preferred Securities
or such Guarantee.
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Company and
will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Company and with any guarantee
now or hereafter entered into by the Company in respect of any preferred or
preference stock of any affiliate of the Company, and (iii) senior to the
Company's common stock. The terms of the Preferred Securities provide that each
holder of Preferred Securities issued by a NWPS Trust by acceptance thereof
agrees to the subordination provisions and other terms of the applicable
Guarantee.
Each Guarantee will constitute a guarantee of payment and not of collection
(allowing the guaranteed party to institute a legal proceeding directly against
the guarantor to enforce its rights under a Guarantee without instituting a
legal proceeding against any other person or entity).
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the
internal laws of the State of New York.
DESCRIPTION OF THE COMMON STOCK
GENERAL
Under the Company's Restated Certificate of Incorporation, as amended (the
"Charter"), the Company is authorized to issue three classes of capital stock:
300,000 shares of Cumulative Preferred Stock, par value $100 per share, of which
26,000 shares of 4 1/2% Cumulative Preferred Stock and 40,000 shares of 5 1/4%
Cumulative Preferred Stock are outstanding; 200,000 shares of Preference Stock,
par value $50 per share, none of which are outstanding; and 20,000,000 shares of
Common Stock, par value $3.50 per share, 7,677,232 of which were outstanding as
of June 8, 1995. The Cumulative Preferred Stock and the Preference Stock may be
issued at any time by the Board of Directors in such series with such terms as
it may fix in resolutions providing for the issuance thereof.
The following statements are summaries of certain provisions relating to the
Common Stock contained in the Charter, the Company's First Mortgage Bond
Indenture, as supplemented to date (the "1940 Indenture"), and the Company's New
Mortgage (the 1940 Indenture and the New Mortgage Indenture are
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referred to together as the "Bond Indentures"). Such summaries are not complete
descriptions of the provisions of the Charter and the Bond Indentures and are
qualified in their entirety by reference thereto. The Charter and the Bond
Indentures are contained in exhibits to reports and registration statements
which have been filed with the Commission (see "Available Information").
DIVIDEND RIGHTS
Subject to the limitations described in the following three paragraphs,
dividends may be paid on the Common Stock out of funds legally available for
that purpose, when and as declared by the Company's Board of Directors.
The Company may not declare or pay cash dividends on the Common Stock unless
full dividends on all Cumulative Preferred Stock and on any Preference Stock
then outstanding for the current and all past quarterly dividend periods have
been paid or provided for. Also, dividends on the Common Stock may not be paid
unless the Company has complied with all sinking fund requirements for those
series of the Cumulative Preferred Stock and any Preference Stock which have
such requirements.
Under the terms of the Charter, for so long as shares of Cumulative
Preferred Stock are outstanding, the following dividend limitations may not be
exceeded unless authorized by the holders of two-thirds of the outstanding
shares of such stock: dividends (other than dividends payable in Common Stock)
and other distributions on, or acquisitions by the Company for value of, Common
Stock (a) may not exceed 50% of the Company's Net Income Available for Common
Stock for the preceding 12-months' period if the "common stock equity" of the
Company is less than 20% of "total capitalization" (each calculated as required
by the Charter) and (b) may not exceed 75% of such Net Income if such
capitalization ratio is 20% or more but less than 25%. If such capitalization
ratio is 25% or more, no such dividend, distribution or acquisition shall be
declared, paid or effected which would reduce such ratio to less than 25%,
except to the extent permitted by clauses (a) and (b). Pursuant to these
provisions, at March 31, 1995, retained earnings were not restricted as to
availability for cash dividends on the Common Stock and the Company's "common
stock equity" was 47% of its "total capitalization".
The Bond Indentures and certain purchase agreements relating to presently
outstanding Cumulative Preferred Stock contain covenants limiting the funds
available for payment of cash dividends and other distributions on the Common
Stock (for payment as well as purchases of Common Stock by the Company). Under
the most restrictive of existing covenants in the Bond Indentures or in such
purchase agreements, at March 31, 1995, a total of approximately $46,271,000 was
available for cash dividends on the Common Stock. In addition, under the 1940
Indenture cash dividends on the Common Stock and purchases of Common Stock may
be made only if the aggregate amount expended for maintenance and provided for
depreciation by the Company subsequent to January 1, 1946, plus Net Income
Available for Common Stock earned after December 31, 1945, which remains after
such dividend (or purchase) is equal to not less than the total of 3 1/2% of the
fixed tangible property, plant and equipment of the Company for each full year,
and a proportionate percentage for any fractional year, which shall have elapsed
between January 1, 1946, and the date of such proposed action.
VOTING RIGHTS
Of the three classes of the Company's authorized capital stock, the Common
Stock is the general voting stock. Holders of Common Stock are entitled to one
vote for each share held. Except in the case of certain dividend arrearages on
the Cumulative Preferred Stock or Preference Stock, the Common Stock is the only
class of stock entitled to be voted for the election of directors.
LIQUIDATION RIGHTS
In the event of a liquidation (whether voluntary or involuntary) or
reduction in the Company's capital resulting in any distribution of assets to
its stockholders, the holders of the Common Stock are entitled to receive, pro
rata according to the number of shares held by each, all of the assets of the
Company remaining for distribution after payment to the holders of the
Cumulative Preferred Stock and Preference Stock of the full preferential amounts
to which they are entitled.
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CERTAIN OTHER FEATURES
Holders of Common Stock do not have any preemptive right to subscribe to or
acquire any additional stock or other securities issued by the Company.
TRANSFER AGENTS AND REGISTRARS
The Transfer Agent and Registrars for the Common Stock are Norwest Bank,
Minnesota, and the Company.
PROVISIONS WITH POSSIBLE ANTI-TAKEOVER EFFECTS
The Company's Charter currently provides for the classification of the Board
of Directors into three classes. The Charter limits the number of directors that
may be elected to not less than nine nor more than twelve (exclusive of such
number of Directors as may be elected by any class of shares of the Company
other than the Common Stock on account of specified dividend arrearages in
accordance with the Charter) and provides that vacancies on the Board of
Directors are to be filled by a majority vote of directors and that directors so
chosen shall hold office until the end of the full term of the class in which
the vacancy occurred. A vote of the holders of 75% of the Company's outstanding
voting stock is required to amend these provisions. In addition, under the
Charter and the Delaware General Corporation Law, directors of the Company may
only be removed for cause. Removal for cause must be approved by either a
majority vote of directors (excluding the director or directors subject to
removal) or by a vote of the holders of at least a majority of the Company's
outstanding voting stock.
In addition, the "fair price provisions" of Charter require that certain
proposed business combinations between the Company and any person who is the
beneficial owner of more than 10% of the outstanding voting shares of the
Company (an "interested party") must be approved by the holders of 75% of the
voting shares, unless certain fair price and procedural requirements are met or
the business combination is approved by a majority of "Continuing Directors,"
those directors who were elected prior to the time a person became an interested
person and any other director so designated by such directors. A vote of the
holders of 75% of the Company's outstanding voting stock is required to amend
the fair price provisions.
LEGAL OPINIONS
The validity of the Offered Securities offered hereby will be passed upon
for the Company and the NWPS Trusts by Schiff Hardin & Waite, 7200 Sears Tower,
233 South Wacker Drive, Chicago, Illinois 60606. Certain legal matters will be
passed upon for any underwriters, dealers or agents by Winthrop, Stimson, Putnam
& Roberts, One Battery Park Plaza, New York, New York 10004. Certain matters of
Delaware law relating to the validity of the Preferred Securities will be passed
upon by Richards, Layton & Finger, Wilmington, Delaware, special Delaware
counsel to the Company and the NWPS Trusts. Schiff Hardin & Waite may rely on
the opinion of Richards, Layton & Finger as to certain matters of Delaware law.
Legal opinions relating to the Company's franchises, titles to its properties,
the lien of the New Mortgage and the lien of the First Mortgage (and certain
other matters) will be given as to South Dakota law by Churchill, Manolis,
Freeman, Kludt & Kaufman, Huron, South Dakota, local counsel for the Company, as
to Nebraska law by Shamberg, Wolf, McDermott & Depue, Grand Island, Nebraska,
local counsel for the Company, as to North Dakota law by Pearce and Durick,
Bismarck, North Dakota, local counsel for the Company, and as to Iowa law by
Nymann & Kohl, Sioux City, Iowa, local counsel for the Company.
The statements made in this Prospectus as to matters of law and legal
conclusions under the captions "The NWPS Trusts", "Description of the Mortgage
Bonds", "Description of the Subordinated Debt Securities", "Description of the
Preferred Securities", "Description of the Guarantees" and "Description of the
Common Stock" have been prepared under the supervision of, and reviewed by,
Schiff Hardin & Waite, counsel for the Company, and such statements are made on
the authority of that firm.
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EXPERTS
The audited financial statements of the Company incorporated by reference in
this Prospectus have been audited by Arthur Andersen LLP, independent public
accountants as indicated in their report with respect thereto and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in auditing and accounting in giving such report.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities in any of the following ways:
(i) through underwriters, dealers or agents, including Morgan Stanley & Co.
Incorporated; (ii) directly to a limited number of purchasers or to a single
purchaser; (iii) through agents or (iv) through any combination of the above.
The Prospectus Supplement, with respect to the respective Offered Securities
will set forth the terms of the offering of the Offered Securities, including
the name or names of any underwriters, dealers or agents, the price to the
public of the Offered Securities and the proceeds to the Company from such sale,
any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of Offered Securities will be named in the
Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover page of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement relating hereto, the obligations of the underwriters to
purchase the Offered Securities will be subject to certain conditions precedent
and the underwriters will be obligated to purchase all the Offered Securities if
any are purchased.
If dealers are utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, the Company will sell such Offered
Securities to the dealers as principals. The dealers may then resell such
Offered Securities to the public at varying prices to be determined by such
dealers at the time of resale. The names of the dealers and the terms of the
transaction will be set forth in the Prospectus Supplement relating thereto.
The Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Offered Securities in respect to which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth in the Prospectus Supplement relating thereto. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a
reasonable efforts basis for the period of its appointment.
The Offered Securities may be sold directly by the Company to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof. The terms of any such
sales will be described in the Prospectus Supplement relating thereto.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
Each series of Offered Securities will be a new issue of securities and,
unless listed on a national securities exchange, will have no established
trading market. Any underwriter to whom Offered Securities of
46
<PAGE>
any series are sold for public offering and sale may make a market in such
series of Offered Securities, but such underwriters will not be obligated to do
so and may discontinue any market making at any time without notice. If so
indicated in the Prospectus Supplement for any series of Offered Securities, the
Offered Securities of such series may be listed on a national securities
exchange. No assurance can be given as to the liquidity of, or the trading
market for, any Offered Securities.
47
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An itemized statement of the estimated amount of the expenses, other than
underwriting discounts and commissions, incurred and to be incurred by the
Company in connection with the issuance and distribution of the Securities
registered pursuant to this Registration Statement is as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....................... $ 68,966
Printing registration statement, prospectus, exhibits and other
printing................................................................. 250,000
Printing and engraving securities......................................... 10,000
Trustees' fees and expenses............................................... 55,000
Fees and expenses of counsel for the Company.............................. 160,000
Transfer Agent's fees and expenses........................................ 10,000
New York Stock Exchange Listing Fees...................................... 20,000
Independent accountant's fees and expenses................................ 20,000
Blue Sky and legal investment fees and expenses........................... 15,000
Fees for rating agencies.................................................. 75,000
Miscellaneous............................................................. 16,034
---------
Total................................................................... $ 700,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The By-Laws of the Company provide for indemnification by the Company of
each of its directors and officers to the fullest extent permitted by Delaware
law for liability (including liability arising under the Securities Act of 1933)
of such director or officer arising by reason of his or her status as a director
or officer of the Company, provided that he or she met the standards established
in the By-Laws, which include requirements that he or she acted in good faith
and in a manner he or she reasonably believed to be in the Company's best
interest. The Company will also advance expenses prior to final disposition of
an action, suit or proceeding upon receipt of an undertaking by the director or
officer to repay such amount if the director or officer is not entitled to
indemnification. All rights to indemnification and advancement of expenses are
deemed to be a contract between the Company and its directors and officers. The
determination that a director or officer has met the standards established in
the By-Laws may be made by a majority vote of a quorum consisting of
disinterested directors, an opinion of counsel (if no such quorum is available
or even if attainable, a quorum of disinterested directors so directs), a
majority vote of stockholders, or a court (which may also overturn any of the
preceding determinations).
The Declaration of each NWPS Trust provides that no NWPS Trustee, affiliate
of any NWPS Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives or agents of any NWPS Trustee, or any
employee or agent of such NWPS Trust or its affiliates (each an "Indemnified
Person") shall be liable, responsible or accountable in damages or otherwise to
such NWPS Trust or any employee or agent of the trust or its affiliates for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified person in good faith on behalf of such NWPS Trust
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by such Declaration
or by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross negligence
(or, in the case of the Property Trustee, negligence) or willful misconduct with
respect to such acts or omissions. The Declaration of each NWPS Trust also
provides that to the fullest extent permitted by applicable law, the Company
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of such NWPS Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of authority conferred on such Indemnified
Person by such Declaration, except that no Indemnified Person shall be entitled
to be indemnified in respect of any loss, damage or claim
II-1
<PAGE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (CONTINUED)
incurred by such Indemnified Person by reason of gross negligence (or, in the
case of the Property Trustee, negligence) or willful misconduct with respect to
such acts or omissions. The Declaration of each NWPS Trust further provides
that, to the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the Company
prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by or an undertaking by or on behalf of the Indemnified Person to
repay such amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified for the underlying cause of action as authorized by
the Declaration of such NWPS Trust.
The directors and officers of the Company and the Regular Trustees of each
NWPS Trust are covered by insurance policies indemnifying against certain
liabilities, including certain liabilities arising under the Securities Act of
1933, as amended (the "Securities Act"), which might be incurred by them in such
capacities and against which they cannot be indemnified by the Company or such
NWPS Trust.
Any agents, dealers or underwriters who execute any of the agreements filed
as Exhibit 1 to this registration statement will agree to indemnify the
Company's directors and their officers and the NWPS Trustees of each NWPS Trust
who signed the registration statement against certain liabilities that may arise
under the Securities Act with respect to information furnished to the Company or
such NWPS Trust by or on behalf of any such indemnifying party.
ITEM 16. LIST OF EXHIBITS.
The exhibits filed herewith are set forth on the Exhibit Index included as
part of this Registration Statement.
ITEM 17. UNDERTAKINGS.
Each of the undersigned registrants hereby undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement;
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(b) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to rule 424(b) if, in the aggregate, the changes
involve and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(c) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a) and (b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS. (CONTINUED)
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) that, for purposes of determining any liability under the Securities
Act of 1933 each filing of the Company's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934, as amended,
that is incorporated by reference in the registration statement 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.
(5) 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.
(6) 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.
NWPS Capital Financing I, NWPS Capital Financing II and NWPS Capital
Financing III, who are some of the registrants, hereby undertake to provide to
the underwriter specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the registrants pursuant to the statutory and bylaw provisions
referred to in Item 15, or otherwise, the registrants have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrants 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
registrants 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 such Act and will be governed by the final adjudication of such
issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Northwestern Public Service Company 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 Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Huron,
and State of South Dakota on the 27th day of July, 1995.
NORTHWESTERN PUBLIC SERVICE COMPANY
(Registrant)
By __________/S/ MERLE D. LEWIS_________
Merle D. Lewis
PRESIDENT 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 dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ --------------------------------------- ----------------
<C> <S> <C>
President, Chief Executive July 27, 1995
/S/ MERLE D. LEWIS Officer and Director
Merle D. Lewis (Principal Executive Officer)
Vice President -- Finance & Corporate
/S/ R. R. HYLLAND* Development
R. R. Hylland (Principal Financial Officer)
/S/ ROGENE A. THADEN* Treasurer
Rogene A. Thaden (Principal Accounting Officer)
/S/ ROBERT A. WILKENS*
Robert A. Wilkens Chairman of the Board of Directors
/S/ JERRY W. JOHNSON*
Jerry W. Johnson Director
/S/ AELRED J. KURTENBACH*
Aelred J. Kurtenbach Director
/S/ HERMAN LERDAL*
Herman Lerdal Director
/S/ LARRY F. NESS*
Larry F. Ness Director
</TABLE>
II-4
<PAGE>
<TABLE>
<C> <S> <C>
Raymond M. Schutz Director
/S/ BRUCE I. SMITH*
Bruce I. Smith Director
W. W. Wood Director
July 27, 1995
By:/S/ MERLE D. LEWIS
Merle D. Lewis
ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of NWPS
Capital Financing I, NWPS Capital Financing II and NWPS Capital Financing III
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Huron, State of South Dakota, on the
27th day of July, 1995.
NWPS CAPITAL FINANCING I
(Registrant)
By: Northwestern Public Service Company,
as Sponsor
By __________/S/ MERLE D. LEWIS_________
Merle D. Lewis
PRESIDENT AND CHIEF EXECUTIVE OFFICER
NWPS CAPITAL FINANCING II
(Registrant)
By: Northwestern Public Service Company,
as Sponsor
By __________/S/ MERLE D. LEWIS_________
Merle D. Lewis
PRESIDENT AND CHIEF EXECUTIVE OFFICER
NWPS CAPITAL FINANCING III
(Registrant)
By: Northwestern Public Service Company,
as Sponsor
By __________/S/ MERLE D. LEWIS_________
Merle D. Lewis
PRESIDENT AND CHIEF EXECUTIVE OFFICER
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -----------
<S> <C>
1(a) Form of Underwriting Agreement relating to Common Stock.
1(b) Form of Underwriting Agreement relating to Trust Preferred Capital Securities.
1(c) Form of Underwriting Agreement relating to Mortgage Bonds.
2(a) Purchase and Sale Agreement dated as of May 17, 1995 by and among Sherman C. Vogel, Stephen A. Vogel,
Jeffrey K. Vogel, Jon M. Vogel, Jeanette Vogel, Synergy Group Incorporated, S&J Investments, SYN Inc.
and Northwestern Growth Corporation, including Exhibit B, the form of Agreement among SYN Inc. and
its Stockholders is incorporated by reference to Exhibit 2 to Form 8-K dated June 21, 1995,
Commission File No. 0-692.
2(b) Purchase and Sale Agreement dated as of July 25, 1995 by and between SYN Inc. and Empire Energy
Corporation is incorporated by reference to Exhibit 2 to the Form 8-K dated July 27, 1995, Commission
File No. 0-692.
4(a)(1) Indenture, dated August 1, 1940, executed by the Company to The Chase Manhattan Bank (N.A.) and J.J.
O'Connell, as Trustees, and supplemental and amendatory indentures thereto are incorporated by
reference to Exhibit 2 to Form 12-K for the year ended December 31, 1970, Commission File No. 2-4472.
4(a)(2) Supplemental Indenture, dated August 1, 1972, executed by the Company to The Chase Manhattan Bank
(N.A.) and J.J. O'Connell, as Trustees, is incorporated by reference to Exhibit 2 to Form 8-K for the
month of August, 1972, Commission File No. 2-4472.
4(a)(3) Supplemental Indenture, dated July 1, 1973, executed by the Company to The Chase Manhattan Bank
(N.A.) and J.J. O'Connell, as Trustees, is incorporated by reference to Exhibit 1 to Form 8-K for the
mouth of July, 1973, Commission File No. 2-4472.
4(a)(4) Supplemental Indenture, dated November 14, 1974, executed by the Company to The Chase Manhattan Bank
(N.A.) and J.J. O'Connell, as Trustees, is incorporated by reference to Exhibit 1 to Form 8-K for the
month of November, 1974, Commission File No. 2-4472.
4(a)(5) Supplemental Indenture, dated May 1, 1975, executed by the Company to The Chase Manhattan Bank (N.A.)
and J.J. O'Connell, as Trustees, is incorporated by reference to Exhibit 2 to Form 8-K for the month
of May, 1975, Commission File No. 2-4472.
4(a)(6) Supplemental Indenture, dated June 1, 1977, executed by the Company to The Chase Manhattan Bank
(N.A.) and J.J. O'Connell, as Trustees, is incorporated by reference to Exhibit 2(a)(34) to
Registration Statement on Form S-7 (Reg. No. 2-58825).
4(a)(7) Supplemental Indenture, dated July 1, 1978, executed by the Company to The Chase Manhattan Bank
(N.A.) and J.J. O'Connell, as Trustees, is incorporated by reference to Exhibit 2(a)(43) to
Registration Statement on Form S-7 (Reg. No. 2-63083).
4(a)(8) Supplemental Indenture, dated December 1, 1978, executed by the Company to The Chase Manhattan Bank
(N.A.) and J.J. O'Connell, as Trustees, is incorporated by reference to Exhibit 11 to Form 10-K for
the year ended December 31, 1978, Commission File No. 0-692.
4(a)(9) Supplemental Indenture, dated May 6, 1987, executed by the Company to The Chase Manhattan Bank (N.A.
and Vincent J. Marino, as trustees, is incorporated by reference to Exhibit 3(a) to Form 10-Q for the
quarter ended September 30, 1987, Commission File No. 0-692.
4(a)(10) Supplemental Indenture, dated November 1, 1989, executed by the Company to The Chase Manhattan Bank
(N.A.) and Vincent J. Marino, as Trustees, is incorporated by reference to Exhibit 4(a)(10) to Form
10-K for the year ended December 31, 1989, Commission File No. 0-692.
4(a)(11) Supplemental Indenture, dated July 15, 1991, executed by the Company to The Chase Manhattan Bank
(N.A.) and C J. Heinzelmann, as Trustees, is incorporated by reference to Exhibit 4(a)(11)(i) to Form
8-K dated August 1, 1991, Commission File No. 0-692.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -----------
<S> <C>
4(a)(12) Supplemental Indenture, dated November 15, 1991, executed by the Company to The Chase Manhattan Bank
(N.A.) and C.J. Heinzelmann, as Trustees, is incorporated by reference to Exhibit 4(a)(12) to Form
10-K for the year ended December 31, 1991, Commission File No. 0-692.
4(a)(13) Supplemental Indenture, dated September 1, 1992, executed by the Company to The Chase Manhattan Bank
(N.A.) and C.J. Heinzelmann, as Trustees, is incorporated by reference to Exhibit 4(a)(11)(i) to Form
8-K, dated September 18, 1992, Commission File No. 0-692.
4(a)(14) General Mortgage Indenture and Deed of Trust dated as of August 1, 1993 from the Company to The Chase
Manhattan Bank (National Association), as Trustee, is incorporated by reference to Exhibit 4(a) to
Form 8-K, dated August 16, 1993, Commission File No. 0-692.
4(a)(15) Supplemental Indenture dated as of August 15, 1993 to the General Mortgage Indenture and Deed of
Trust dated as of August 1, 1993 executed by the Company to The Chase Manhattan Bank (National
Association), as Trustee, is incorporated by reference to Exhibit 4(b) to Form 8-K, dated August 16,
1993, Commission File No. 0-692.
4(a)(16) Supplemental Indenture dated August 15, 1993 to the Indenture dated August 1, 1940 from the Company
to The Chase Manhattan Bank (National Association) and C. J. Heinzelmann, as successor Trustees, is
incorporated by reference to Exhibit 4(c) to Form 8-K, dated August 16, 1993, Commission File No.
0-692.
4(a)(17) Form of General Mortgage Indenture and Deed of Trust (1993) Supplemental Indenture for Mortgage
Bonds.*
4(a)(18) Specimen Mortgage Bonds included in Exhibit 4(a)(17).*
4(a)(19) Form of Indenture (1940) Supplemental Indenture for Pledged Bonds.*
4(a)(20) Form of Declaration of Trust of NWPS Capital Financing I.*
4(a)(21) Form of Declaration of Trust of NWPS Capital Financing II.*
4(a)(22) Form of Declaration of Trust of NWPS Capital Financing III.*
4(a)(23) Certificate of Trust of NWPS Capital Financing I.*
4(a)(24) Certificate of Trust of NWPS Capital Financing II.*
4(a)(25) Certificate of Trust of NWPS Capital Financing III.*
4(a)(26) Form of Amended and Restated Declaration of Trust of NWPS Capital Financing I.
4(a)(27) Form of Amended and Restated Declaration of Trust of NWPS Capital Financing II.
4(a)(28) Form of Amended and Restated Declaration of Trust of NWPS Capital Financing III.
4(a)(29) Form of Subordinated Debt Securities Indenture between the Company and The Chase Manhattan Bank
(N.A.), as Trustee.
4(a)(30) Form of Supplemental Indenture to Subordinated Debt Securities Indenture to be used in connection
with the issuance of Subordinated Debt Securities and Preferred Securities.
4(a)(31) Form of Preferred Security of NWPS Capital Financing I -- included in Exhibit 4(a)(26).
4(a)(32) Form of Preferred Security of NWPS Capital Financing II -- included in Exhibit 4(a)(27).
4(a)(33) Form of Preferred Security of NWPS Capital Financing II -- included in Exhibit 4(a)(28).
4(a)(34) Form of Subordinated Debt Security -- included in Exhibit 4(a)(30).
4(a)(35) Form of Guarantee with respect to Preferred Securities.
4(b)(1) Sale Agreement between Company and Mercer County, North Dakota, dated June 1, 1993, related to
issuance of Pollution Control Refunding Revenue Bonds (Northwestern Public Service Company Project)
Series 1993, is incorporated by reference to Exhibit 4(b)(1) to Form 10-Q for the quarter ending June
30, 1993, Commission File No. 0-692.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -----------
<S> <C>
4(b)(2) Loan Agreement between Company and Grant County, South Dakota, dated June 1, 1993, related to
issuance of Pollution Control Refunding Revenue Bonds (Northwestern Public Service Company Project)
Series 1993A, is incorporated by reference to Exhibit 4(b)(2) to Form 10-Q for the quarter ending
June 30, 1993, Commission File No. 0-692.
4(b)(3) Loan Agreement between Company and Grant County, South Dakota, dated June 1, 1993, related to
issuance of Pollution Control Refunding Revenue Bonds (Northwestern Public Service Company Project)
Series 1993B, is incorporated by reference to Exhibit 4(b)(3) to Form 10-Q for the quarter ending
June 30, 1993, Commission File No. 0-692.
4(b)(4) Loan Agreement between Company and City of Salix, Iowa, dated June 1, 1993, related to issuance of
Pollution Control Refunding Revenue Bonds (Northwestern Public Service Company Project) Series 1993,
is incorporated by reference to Exhibit 4(b)(4) to Form 10-Q for the quarter ending June 30, 1993,
Commission File No. 0-692.
5(a) Opinion of Schiff Hardin & Waite.
5(b)(i) Opinion of Richards, Layton & Finger, Special Delaware Counsel pertaining to NWPS Capital Financing
I.
5(b)(ii) Opinion of Richards, Layton & Finger, Special Delaware Counsel pertaining to NWPS Capital Financing
II.
5(b)(iii) Opinion of Richards, Layton & Finger, Special Delaware Counsel pertaining to NWPS Capital Financing
III.
8 Tax Opinion of Schiff Hardin and Waite (contained in its opinion filed as Exhibit 5(a) to this
Registration Statement).
12 Statement of Computation of Ratio of Earnings to Fixed Charges of the Company.
23(a) Consent of Arthur Andersen LLP.*
23(b) The consent of Schiff Hardin & Waite is contained in its opinion filed as Exhibit 5(a) to this
Registration Statement.
23(c) The consents of Richards, Layton & Finger, Special Delaware Counsel, are contained in its opinions
filed as Exhibits 5(b)(i), (ii) and (iii) to this Registration Statement.
24(a) Powers of Attorney for the directors and officers of the Company (set forth on the signature pages of
the Registration Statement).*
24(b) Powers of Attorney for the Trustees of NWPS Capital Financing I, NWPS Capital Financing II and NWPS
Capital Financing III (the powers of attorney are included in Exhibits 4(a)(20), 4(a)(21) and
4(a)(22), respectively).*
25(a) Statement of Eligibility under the Trust Indenture Act of 1939 of The Chase Manhattan Bank (N.A.), as
Trustee under the General Mortgage Indenture and Deed of Trust.*
25(b) Statement of Eligibility under the Trust Indenture Act of 1939 of The Chase Manhattan Bank (N.A.), as
Trustee under the Subordinated Debt Securities Indenture.*
25(c) Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Amended and Restated Declaration of Trust of NWPS Capital Financing I.*
25(d) Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Amended and Restated Declaration of Trust of NWPS Capital Financing II.*
25(e) Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as
Trustee under the Amended and Restated Declaration of Trust of NWPS Capital Financing III.*
25(f) Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as
Trustee of Preferred Securities Guarantee of NWPS Capital Financing I.*
25(g) Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as
Trustee of Preferred Securities Guarantee of NWPS Capital Financing II.*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -----------
25(h) Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust Company, as
Trustee of Preferred Securities Guarantee of NWPS Capital Financing III.*
<S> <C>
99(a) Management Agreement dated May 17, 1995 among the Company, SYN Inc. and Empire Gas Company, is
incorporated by reference to Exhibit 99.1 to Form 8-K dated June 21, 1995, Commission File No. 0-692.
99(b) Agreement Among Initial Stockholders and SYN Inc., dated May 17, 1995 among Empire Gas Corporation,
Northwestern Growth Corporation and SYN Inc., is incorporated by reference to Exhibit 99.2 to Form
8-K dated June 21, 1995, Commission File No. 0-692.
</TABLE>
- ------------------------
*Previously filed.
<PAGE>
Exhibit 1(a)
WSP&R
Draft
7/25/95
COMMON STOCK
UNDERWRITING AGREEMENT
NORTHWESTERN PUBLIC SERVICE COMPANY
33 Third Street SE
Huron, South Dakota 57350-1318
______ __, 1995
Ladies and Gentlemen:
On the basis of the representations and warranties, and subject to the
terms and conditions, set forth in this agreement ("this Agreement" or the
"Underwriting Agreement"), we, the Underwriters (as defined below), understand
that Northwestern Public Service Company, a Delaware corporation (the
"Company"), proposes to issue and sell to the Underwriters __________ shares of
its Common Stock, par value $3.50 per share (the "Firm Shares"). The Company
also proposes to issue and sell to the several Underwriters not more than an
additional __________ shares of its Common Stock, par value $3.50 per share (the
"Additional Shares"), if and to the extent that we, as Representative, shall
have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of common stock granted to the Underwriters in Section 3
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the Shares. The shares of Common Stock, par value $3.50 per
share, of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the Common Stock.
The term "Underwriters," as used herein, shall be deemed to mean the
several persons, firms or corporations named in Schedule I hereto, and the term
"Representative," as used herein, shall be deemed to mean the representative or
representatives of such Underwriters by whom or on whose behalf this
Underwriting Agreement is signed. If there shall be one person, firm or
corporation named in Schedule I, the term "Underwriters" and the term
"Representative," as used herein, shall mean that person, firm or corporation.
All obligations of the Underwriters are several and not joint. The use of the
term "Underwriter" herein shall not be deemed to establish or admit that a
purchaser of the Shares is an "underwriter" of the Shares as such term is
defined in and used under the Securities Act of 1933, as amended (the
"Securities Act").
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1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (Registration Statement
No. 33-60423), including a prospectus, relating to the Shares, and has filed
with, or transmitted for filing to, or shall promptly hereafter file with or
transmit for filing to, the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to the Shares pursuant to Rule 424 under the
Securities Act. The term "Registration Statement" means the registration
statement, including the exhibits thereto, as amended to the date of this
Agreement. The term "Basic Prospectus" means the prospectus included in the
Registration Statement, as amended and supplemented to the date of this
Agreement (exclusive of any supplement to the prospectus relating solely to
securities other than the Shares). The term "Prospectus" means the Basic
Prospectus together with the Prospectus Supplement. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating to
the Shares, together with the Basic Prospectus. As used herein, the terms
"Basic Prospectus," "Prospectus" and "preliminary prospectus" shall include in
each case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and, to
the Company's knowledge, after due inquiry, no proceedings for such purpose are
pending before or threatened by the Commission.
(c) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder or pursuant to
said rules and regulations will be deemed to comply therewith; (ii) each part of
the Registration Statement, when such part became effective, did not contain,
and each such part, as amended or supplemented, if applicable, will not contain
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 not
misleading; (iii) the Registration Statement and the Prospectus comply, and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder or pursuant to said rules and regulations
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will be deemed to comply therewith; and (iv) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this Section 1(c) do not apply (A) to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter expressly
for use therein.
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and to enter into and perform its obligations under
this Agreement. The Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of 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 Company and its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of 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
Company and its subsidiaries, taken as a whole.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of the Common Stock outstanding prior to the issuance
of the Shares have been duly authorized and are validly issued, fully paid and
non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights.
(i) This Agreement has been duly authorized, executed and delivered
by the Company.
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(j) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not conflict with,
result in a breach of or constitute a default under any provision of (A)
applicable law (except for the indemnification provisions hereof which may be
unenforceable as against public policy under certain circumstances), (B) the
certificate of incorporation or by-laws of the Company, (C) any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company or
any of its subsidiaries is a party that is material to the Company and its
subsidiaries, taken as a whole, or (D) any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
subsidiary.
(k) The Federal Energy Regulatory Commission (the "FERC") has issued
an appropriate order or orders with respect to the issuance and sale of the
Shares in accordance with this Agreement; such order or orders are in full force
and effect; the issuance and sale of the Shares are in conformity with the terms
of such order or orders; and no other authorization, approval or consent of any
other governmental body or agency is legally required for the issuance and sale
of the Shares as contemplated hereby, except such as have been obtained under
the Securities Act and such as may be required under the state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described, or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.
(n) Each of the Company and its subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all federal, state,
local and other governmental authorities, all self-regulatory organizations and
all courts and other tribunals, to own, lease, license and use its properties
and assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the
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failure to obtain or file would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(o) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder.
(p) The Company is not 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").
(q) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(r) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a material adverse effect on the Company and
its subsidiaries taken as a whole.
(s) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(t) On the basis of the present knowledge of the senior management of
the Company as to the business and affairs of Synergy Group Incorporated, a
Delaware corporation ("Synergy"), and its subsidiaries, the Company has no
reason to believe that the representations contained in subsections (l) and
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(m) above would be incorrect in any material respect on the date hereof as a
result of the consummation of the acquisition of such business on the terms
described in the Prospectus (the "Acquisition").
(u) The unaudited pro forma consolidated financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus have been prepared in good faith by the Company, and the assumptions
on which such pro forma financial statements have been prepared provide a
reasonable basis for presenting the significant effects directly attributable to
the Acquisition described in the notes thereto.
(v) The Company is not aware of any facts or circumstances that would
prevent any of the conditions to the consummation of the Acquisition contained
in the Purchase and Sale Agreement dated as of May 17, 1995, by and among
Synergy and the other parties thereto (the "Acquisition Agreement") from being
satisfied in the ordinary course on or prior to September 30, 1995.
2. PUBLIC OFFERING. The Company is advised by the Underwriters that
they propose to make a public offering of their respective portions of the
Shares as soon after the Registration Statement and this Agreement have become
effective as in the Representative's judgment is advisable. The Company is
further advised by the Representative that the Shares are to be offered to the
public initially at $_____________ a share (the public offering price) and to
certain dealers selected by the Underwriters at a price that represents a
concession not in excess of $______ a share under the public offering price, and
that any Underwriter may allow, and such dealers may reallow, a concession, not
in excess of $_____ a share, to any Underwriter or to certain other dealers.
3. PURCHASE AND DELIVERY. Subject to the terms and conditions herein
set forth, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective numbers of Firm Shares set
forth in Schedule I hereto opposite their names at $ _______ a share (the
"Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to ______________
Additional Shares at the purchase price. Additional Shares may be purchased as
provided herein solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. If any Additional Shares are
to be purchased, each Underwriter agrees, severally and not jointly, to purchase
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as the Representative
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may determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of Firm
Shares.
Payment for the Firm Shares shall be made by certified or official
bank check or checks payable to the order of the Company in New York Clearing
House funds at the office of Winthrop, Stimson, Putnam & Roberts, New York, New
York, at 10:00 A.M., local time, on ___________, 1995, or at such other time on
the same or such other date, not later than ________, 1995, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the Closing Date.
Payment for any Additional Shares shall be made by certified or
official bank check or checks payable to the order of the Company in New York
Clearing House funds at the office of Winthrop, Stimson, Putnam & Roberts, New
York, New York, at 10:00 A.M., local time, on such date (which may be the same
as the Closing Date but shall in no event be earlier than the Closing Date nor
later than ten business days after the giving of the notice hereinafter referred
to) as shall be designated in a written notice from the Representative to the
Company of the Representative's determination, on behalf of the Underwriters, to
purchase a number, specified in said notice, of Additional Shares, or on such
other date, in any event not later than ____________, 1995, as shall be
designated in writing by the Representative. The time and date of such payment
are hereinafter referred to as the Option Closing Date. The notice of the
determination to exercise the option to purchase Additional Shares and of the
Option Closing Date may be given at any time within 30 days after the date of
this Agreement.
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as the
Representative shall request in writing not later than two full business days
prior to the Closing Date or the Option Closing Date, as the case may be. The
certificates evidencing the Firm Shares and Additional Shares shall be delivered
to the Representative on the Closing Date or the Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the purchase price therefor.
4. CONDITIONS TO CLOSING. The several obligations of the
Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading in the rating
accorded any of the Company's securities by
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any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company and
its subsidiaries, taken as a whole, from that set forth in the Prospectus,
that, in the judgment of the Representative, is material and adverse and
that makes it, in the judgment of the Representative, impracticable to
market the Shares on the terms and in the manner contemplated in the
Prospectus; and
(iii) the Company shall have obtained an appropriate order or
orders of the FERC authorizing the issuance, sale and delivery of the
Shares as contemplated by this Agreement, which order or orders at the
Closing Date shall be in full force and effect and shall not be contested
or the subject of review or appeal.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company to the effect (x) set forth in clauses (a)(i) and (a)(iii) above; (y)
that the representations and warranties of the Company contained in the
Underwriting Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied on or before the Closing
Date; and (z) that no executive officer of the Company has received any
notification from the Sellers (as defined in the Acquisition Agreement) or their
counsel that any information (including, without limitation, financial
information) relating to Synergy contained or incorporated by reference in the
Registration Statement or the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Schiff Hardin & Waite, special counsel to the
Company, to the effect that
(i) the Company has been duly incorporated and, based upon
certificates or letters from state or other appropriate authorities, is
validly existing as a corporation in good standing under the laws of the
State of Delaware and is duly qualified and in good standing as a foreign
corporation in the States of Iowa, Nebraska, North Dakota and South Dakota,
with corporate powers and statutory authority to carry on the business
which it now carries on
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as stated in the Prospectus and to own and operate the properties used by
it in such business;
(ii) each subsidiary of the Company has been duly incorporated
and based upon certificates or letters from state or other appropriate
authorities, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation with corporate powers and
statutory authority to carry on the business which it now carries on as
stated in the Prospectus and to own and operate the properties used by it
in such business and is duly qualified and in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of 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 Company and its subsidiaries, taken as a
whole;
(iii) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(iv) the shares of the Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly issued,
fully paid and non-assessable;
(v) the Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will
not be subject to any preemptive or similar rights;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement will not conflict with, result in a breach of or constitute a
default under any provision of (A) applicable law (except for the
indemnification provisions hereof which may be unenforceable as against
public policy under certain circumstances), (B) the certificate of
incorporation or by-laws of the Company, (C) any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company or any of
its subsidiaries is a party that is material to the Company and its
subsidiaries, taken as a whole, or (D) any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary;
(viii) the FERC has issued an appropriate order or orders with
respect to the issuance and sale of the Shares in accordance with the
Underwriting Agreement; such order or
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orders are in full force and effect; the issuance and sale of the Shares
are in conformity with the terms of such order or orders; and no other
authorization, approval or consent of any other governmental body or agency
(including, without limitation, in the jurisdictions of South Dakota,
Nebraska, North Dakota and Iowa) is legally required for the issuance and
sale of the Shares as contemplated by the Underwriting Agreement, except
such as have been obtained under the Securities Act and such as may be
required under the state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(ix) there are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described, or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required;
(x) the statements (A) in the Prospectus under the captions
"Description of the Common Stock," "Underwriting," "Pending Acquisition of
Synergy Group Incorporated" and "Plan of Distribution," (B) in the
Registration Statement under Item 15, (C) in "Item 3 - Legal Proceedings"
of the Company's most recent annual report on Form 10-K incorporated by
reference in the Prospectus and (D) in "Item 1 - Legal Proceedings" of Part
II of the Company's quarterly reports on Form 10-Q filed since such annual
report and reviewed by such counsel, in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(xi) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required;
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(xii) the Company is (A) not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act or (B) a "holding company" as such term is defined
in the Public Utility Holding Company Act of 1935, as amended;
(xiii) the Registration Statement has become and is effective
under the Securities Act, and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for a stop order with respect thereto are
pending or threatened under Section 8(d) of the Securities Act; and
(xiv) such counsel (A) is of the opinion that (except for
financial statements and schedules included therein as to which such
counsel need not express any opinion) each document, if any, filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied when so filed as to form in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (B) believes that (except for financial statements and
schedules as to which such counsel need not express any belief and except
for that part of the Registration Statement that constitutes the Form T-l)
each part of the Registration Statement, when such part became effective
did not, and, as of the date such opinion is delivered, does not contain
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
not misleading, (C) is of the opinion that the Registration Statement and
Prospectus (except for financial statements and schedules included therein
as to which such counsel need not express any opinion), comply as to form
in all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder and (D) believes that (except
for financial statements and schedules as to which such counsel need not
express any belief) the Prospectus as of the date such opinion is delivered
does not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(d) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Alan D. Dietrich, Esq., Vice President,
Corporate Services of the Company to the effect that the Company is (i) in
compliance with any and all applicable Environmental Laws, (ii) has received all
permits, license or other approvals required of it under applicable
Environmental Laws to conduct its business and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except where such
noncompliance with
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Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company.
(e) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Winthrop, Stimson, Putnam & Roberts, counsel
for the Underwriters, covering such matters as the Representative may reasonably
request.
With respect to subparagraph (xi) of paragraph (c) above, Schiff
Hardin & Waite, special counsel to the Company, may state that its opinion and
belief are based upon its participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto (excluding
(for purposes of clauses (B) and (D) of such paragraph) certain of the documents
incorporated by reference therein (to be specified in such opinion)) and review
and discussion of the contents thereof (including the documents incorporated by
reference therein), but are without independent check or verification, except
as specified.
The opinions of Schiff Hardin & Waite and Alan D. Dietrich, Esq. shall
be rendered to the Underwriters at the request of the Company and shall so state
therein.
(f) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from Arthur Andersen LLP, the Company's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Prospectus. Such letter shall include,
without limitation, statements to the effect that (i) the unaudited pro forma
condensed consolidated financial statements included or incorporated by
reference in the Prospectus comply as to form with the applicable accounting
requirements of Rule 11-02 of Regulation S-X, (ii) management's assumptions
provide a reasonable basis for presenting the significant effects directly
attributable to the Acquisition described in the notes to the unaudited pro
forma condensed consolidated financial statements, (iii) the related pro forma
adjustments give appropriate effect to those assumptions, and (iv) the pro forma
column reflects the proper application of those adjustments to the historical
financial statement amounts contained in such unaudited pro forma consolidated
statements.
(g) The Representative shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Representative, from Arthur Andersen LLP, the Company's independent public
accountants, to
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the effect that such accountants reaffirm, as of the Closing Date, and as though
made on the Closing Date, the statements made in the letter furnished by such
accountants pursuant to Section 4(f), except that the specified date referred to
therein shall be a date not more than five business days prior to the Closing
Date.
(h) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from KPMG Peat Marwick LLP, Synergy's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
or incorporated by reference into the Prospectus.
(i) At the Closing Date, the Firm Shares shall have been approved for
listing on the New York Stock Exchange upon notice of issuance.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to the Representative on the Option
Closing Date of such documents as the Representative may reasonably request.
5. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To furnish the Representative, without charge, a signed copy of
the Registration Statement (including exhibits thereto) and to deliver to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and, during the period mentioned in paragraph (c) below, as
many copies of the Prospectus, any documents incorporated by reference therein
and any supplements and amendments thereto or to the Registration Statement as
the Underwriters may reasonably request (delivery of the Prospectus to be made
in New York, New York no later than 10:00 A.M. on the business day immediately
succeeding the date of this Agreement).
(b) To cause the Prospectus to be filed with the Commission pursuant
to and in compliance with Rule 424 under the Act.
(c) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to the Underwriters a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which the Underwriters reasonably object.
(d) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for
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<PAGE>
the Underwriters the Prospectus is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event shall occur or condition exist
as a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the Underwriters, and to the dealers (whose
names and addresses the Representative will furnish to the Company) to which
Shares may have been sold by the Underwriters on behalf of the Underwriters and
to any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(e) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Underwriters shall
reasonably request and to maintain such qualification for as long as the
Underwriters shall reasonably request.
(f) To make generally available to the Company's security holders and
to the Representative as soon as practicable an earning statement covering a
twelve month period beginning on the first day of the first full fiscal quarter
after the date of the Underwriting Agreement, which earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder. If such fiscal quarter is the last
fiscal quarter of the Company's fiscal year, such earning statement shall be
made available not later than 90 days after the close of the period covered
thereby and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(g) Whether or not any sale of Shares is consummated, to pay all
expenses incident to the performance of its obligations under the Underwriting
Agreement, including: (i) the preparation and filing of the Registration
Statement and the Prospectus and all amendments and supplements thereto, (ii)
the preparation, issuance and delivery of the Shares, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the qualification
of the Shares under securities or Blue Sky laws in accordance with the
provisions of Section 5(d), including filing fees and the fees and disbursements
of counsel for the Underwriters in connection therewith and in connection with
the preparation of any Blue Sky Memoranda in an aggregate amount not to exceed
$10,000, (v) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and all amendments
thereto and of the Prospectus and any amendments or supplements thereto,
(vi) the
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<PAGE>
fees and expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc., and (vii) the fees and expenses
incurred in connection with the listing of the Shares on any securities
exchange.
(h) During the period ending [90] days after the date of this
Agreement, without the prior written consent of Morgan Stanley & Co.
Incorporated, not to (1) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock of the Company or any
securities convertible into or exercisable or exchangeable for such common
stock, other than (i) the Shares to be sold hereunder and (ii) any shares of
such common stock sold by the Company upon the exercise of an option or warrant
or the conversion of a security outstanding on the date hereof or (2) enter into
any swap or similar arrangement that transfers, in whole or in part, the
economic risk of ownership of the common stock of the Company, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
common stock or such other securities, in cash or otherwise.
(i) To use its reasonable efforts to cause each of its current
executive officers and directors to refrain, during the period ending [90] days
after the date of this Agreement, without the prior written consent of Morgan
Stanley & Co. Incorporated, from (1) offering, pledging, selling, contracting to
sell, selling any option or contract to purchase, purchasing any option or
contract to sell, granting any option, right or warrant to purchase or otherwise
transferring or disposing of, directly or indirectly, any shares of common stock
of the Company or any securities convertible into or exercisable or exchangeable
for such common stock, other than any shares of such common stock sold by such
executive officers and directors upon the exercise of an option or warrant or
the conversion of a security outstanding on the date hereof or (2) entering into
any swap or similar arrangement that transfers, in whole or in part, the
economic risk of ownership of the common stock of such executive officers and
directors, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of common stock or such other securities in cash or
otherwise.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with investigating or defending any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
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<PAGE>
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representative, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The
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<PAGE>
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 6 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand in connection
with the offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of such Shares (before
deducting expenses) received by the Company and the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus Supplement, bear to the aggregate public
offering price of the Shares. The relative fault of the Company on the one hand
and of the Underwriters on the other hand shall be determined by reference to,
among other things, whether the
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<PAGE>
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
6 are several in proportion to the respective number of Shares they have
purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total amount of Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that 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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 6 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.
7. TERMINATION. This Agreement shall be subject to termination, by
notice given by the Representative to the Company, if (a) after the execution
and delivery of the Underwriting Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representative,
is material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such
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<PAGE>
event, singly or together with any other such event, makes it, in the judgment
of the Representative, impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus. This Agreement may also be
terminated at any time prior to the Closing Date if in the judgment of the
Representative the subject matter of any amendment or supplement to the
Registration Statement or Prospectus prepared and furnished by the Company
reflects a material adverse change in the business, properties or financial
condition of the Company and its subsidiaries, taken as a whole, which renders
it either inadvisable to proceed with such offering, if any, or inadvisable to
proceed with the delivery of the Shares to be purchased hereunder.
8. DEFAULTING UNDERWRITERS. If, on the Closing Date or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase the Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of Shares to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions that the
number of Shares set forth opposite their respective names in the Underwriting
Agreement bears to the aggregate number of Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as the
Representative may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date, PROVIDED that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to this
Section 8 by an amount in excess of one-ninth of such number of Shares without
the written consent of such Underwriter. If, on the Closing Date or the Option
Closing Date, as the case may be, any Underwriter or Underwriters shall fail or
refuse to purchase the Shares that it has or they have agreed to purchase and
the aggregate amount of Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Shares to be purchased on such date,
and arrangements satisfactory to the Representative and the Company for the
purchase of such Shares are not made within 36 hours after such default, the
Underwriting Agreement shall terminate without liability on the part of any non-
defaulting Underwriter or the Company. In any such case either the
Representative or the Company shall have the right to postpone the Closing Date
or the Option Closing Date, as the case may be, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under the Underwriting Agreement.
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<PAGE>
If the Underwriting Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of the Underwriting
Agreement, or if for any reason the Company shall be unable to perform its
obligations under the Underwriting Agreement, the Company will reimburse the
Underwriters or such Underwriters as have so terminated the Underwriting
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with the Underwriting Agreement or the offering
of the Shares.
If the Underwriting Agreement shall be terminated by the Company
because of any failure or refusal on the part of the Underwriters to comply with
the terms or to fulfill any of the conditions of the Underwriting Agreement, or
if for any reason the Underwriters shall be unable to perform their obligations
under the Underwriting Agreement, the Underwriters will reimburse the Company
for all out-of-pocket expenses (including the fees and disbursements of its
counsel) reasonably incurred by the Company in connection with the Underwriting
Agreement or the offering of the Shares.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
indemnity and contribution agreements and the representations, warranties and
other statements of the Company, its officers and the Underwriters set forth in
the Underwriting Agreement will remain in full force and effect, regardless of
any termination of the Underwriting Agreement, any investigation made by or on
behalf of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 6 and delivery of and payment for the
Shares.
10. SUCCESSORS. This Agreement will enure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
11. COUNTERPARTS. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. The Underwriting Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
13. HEADINGS. The headings of the sections of the Underwriting
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of the Underwriting Agreement.
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<PAGE>
14. NOTICES. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telecopied and confirmed
to Morgan Stanley & Co. Incorporated at 1251 Avenue of the Americas, New York,
New York 10020, Attn: Mr. Jay D. Hatfield or, if sent to the Company, will be
mailed, delivered or telecopied and confirmed to it at 33 Third Street SE,
Huron, South Dakota, 57350, Attn: Mr. Richard R. Hylland, Vice President --
Finance & Corporate Development, Telecopy No: (605) 353-8286.
15. DEFINITION OF "SUBSIDIARY". The term "subsidiary," as used in
this Agreement, shall be deemed to refer only to (i) those direct or indirect
subsidiaries of the Company which would qualify as "significant subsidiaries"
pursuant to Rule 405 under the Securities Act, and (ii) SYN Inc.
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<PAGE>
Please confirm your agreement by having an authorized officer sign a
copy of the Underwriting Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
Acting severally on behalf of themselves
and the several Underwriters named
herein
By: MORGAN STANLEY & CO. INCORPORATED
By: _______________________________
Name:
Title:
Accepted, ______ __, 1995
NORTHWESTERN PUBLIC SERVICE COMPANY
By: _______________________________
Name:
Title:
<PAGE>
SCHEDULE I
Number
Name of Underwriter of Shares
- ------------------- ---------
Morgan Stanley & Co. Incorporated. . . . . . . . __________
PaineWebber Incorporated . . . . . . . . . . . . __________
___________________. . . . . . . . . . . . . . . __________
___________________. . . . . . . . . . . . . . . __________
___________________. . . . . . . . . . . . . . . __________
___________________. . . . . . . . . . . . . . . __________
___________________. . . . . . . . . . . . . . . __________
_______________
Total
_______________
_______________
<PAGE>
Exhibit 1(b)
WSP&R
DRAFT
7/25/95
TRUST PREFERRED CAPITAL SECURITIES
UNDERWRITING AGREEMENT
NWPS CAPITAL FINANCING I
c/o Northwestern Public Service Company
33 Third Street SE
Huron, South Dakota 57350-1318
NORTHWESTERN PUBLIC SERVICE COMPANY
33 Third Street SE
Huron, South Dakota 57350-1318
______ __, 1995
Ladies and Gentlemen:
On the basis of the representations and warranties, and subject to the
terms and conditions, set forth in this agreement ("this Agreement" or the
"Underwriting Agreement"), we, the Representative of the Underwriters (as
defined below), understand that NWPS Capital Financing I (the "Trust"), a
statutory business trust organized under the Delaware Business Trust Act of the
State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C.
Section 3801 ET SEQ.) (the "Delaware Act") and Northwestern Public Service
Company, a Delaware corporation, as holder of the Common Securities (as defined
herein) of the Trust and as guarantor (the "Company"), propose that the Trust
issue and sell [ ] aggregate number of its [ ]% Trust Preferred Capital
Securities (liquidation amount $25 per security), representing preferred
undivided beneficial interests in the assets of the Trust (the "Preferred
Securities"). The Preferred Securities will be guaranteed by the Company with
respect to distributions and payments upon liquidation, redemption and otherwise
(the "Preferred Securities Guarantee") pursuant to, and to the extent set forth
in, the Preferred Securities Guarantee Agreement (the "Preferred Securities
Guarantee Agreement"), dated as of _________ __, 1995, between the Company and
Wilmington Trust Company, as Trustee (the "Guarantee Trustee"). The Preferred
Securities and the related Preferred Securities Guarantee are referred to herein
as the Securities.
The entire proceeds from the sale of the Securities will be combined
with the entire proceeds from the sale by the Trust to the Company of its common
securities representing common undivided beneficial interests in the assets of
the Trust (the "Common Securities") guaranteed by the Company, to the extent
set
<PAGE>
forth in the Prospectus, with respect to distributions and payments upon
liquidation, redemption and otherwise (the "Common Securities Guarantee" and
together with the Preferred Securities Guarantee, the "Guarantees") pursuant to
the Common Securities Guarantee Agreement (the "Common Securities Guarantee
Agreement" and, together with the Preferred Securities Guarantee Agreement, the
"Guarantee Agreements"), dated as of _______ __, 1995, between the Company and
the Guarantee Trustee, as Trustee, and will be used by the Trust to purchase
subordinated debt securities issued by the Company ("Subordinated Debt
Securities" and, together with the Guarantee Agreements and the Guarantees, the
"Company Securities"). The Preferred Securities and the Common Securities will
be issued pursuant to the amended and restated declaration of trust of the
Trust, dated as of _______ __, 1995 (the "Declaration"), among the Company, as
Sponsor, the trustees named therein (the "Trustees") and the holders from time
to time of undivided beneficial interests in the assets of the Trust. The
Subordinated Debt Securities will be issued pursuant to an indenture, dated as
of _____ __, 1995 (the "Base Indenture"), between the Company and The Chase
Manhattan Bank (N.A.), as trustee (the "Debt Trustee"), and a supplement to the
Base Indenture, dated as of _______ __, 1995 (the "Supplemental Indenture," and
together with the Base Indenture and any other amendments or supplements
thereto, the "Indenture"), between the Company and the Debt Trustee.
The term "Underwriters" as used herein, shall be deemed to mean the
several persons, firms or corporations named in Schedule I hereto, and the term
"Representative," as used herein, shall be deemed to mean the representative or
representatives of such Underwriters by whom or on whose behalf this
Underwriting Agreement is signed. If there shall be one person, firm or
corporation named in Schedule I, the term "Underwriters" and the term
"Representative," as used herein, shall mean that person, firm or corporation.
All obligations of the Underwriters are several and not joint. The use of the
term "Underwriter" herein shall not be deemed to establish or admit that a
purchaser of the Securities is an "underwriter" of the Securities as such term
is defined in and used under the Securities Act of 1933, as amended (the
"Securities Act").
1. REPRESENTATIONS AND WARRANTIES. Each of the Trust and the
Company jointly and severally represents and warrants to and agrees with each of
the Underwriters that:
(a) The Trust and the Company have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(Registration Statement No. 33-60423), including a prospectus, relating to the
Securities, and has filed with, or transmitted for filing to, or shall promptly
hereafter file with or transmit for filing to, the Commission a prospectus
supplement (the "Prospectus Supplement") specifically relating to the Securities
pursuant to Rule 424 under the Securities Act. The term "Registration
Statement"
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<PAGE>
means the registration statement, including the exhibits thereto, as amended to
the date of this Agreement (exclusive of any supplement to the prospectus
relating solely to securities other than the Securities). The term "Basic
Prospectus" means the prospectus included in the Registration Statement, as
amended and supplemented to the date of this Agreement. The term "Prospectus"
means the Basic Prospectus together with the Prospectus Supplement. The term
"preliminary prospectus" means a preliminary prospectus supplement specifically
relating to the Securities, together with the Basic Prospectus. As used herein,
the terms "Basic Prospectus," "Prospectus" and "preliminary prospectus" shall
include in each case the documents, if any, incorporated by reference therein.
The terms "supplement," "amendment" and "amend" as used herein shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and, to
the Trust's and the Company's knowledge, after due inquiry, no proceedings for
such purpose are pending before or threatened by the Commission.
(c) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder or pursuant to
said rules and regulations will be deemed to comply therewith; (ii) each part of
the Registration Statement, when such part became effective, did not contain,
and each such part, as amended or supplemented, if applicable, will not contain
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 not
misleading; (iii) the Registration Statement and the Prospectus comply, and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder or pursuant to said rules and regulations will be deemed
to comply therewith; and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section 1(c) do
not apply (A) to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Trust or the Company in writing by such Underwriter expressly for use therein or
(B) to that part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-l) under
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<PAGE>
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus, to issue the Company Securities, to enter into and
perform its obligations under the Underwriting Agreement, the Declaration, the
Indenture and the Company Securities and to purchase, own, and hold the Common
Securities issued by the Trust and to consummate the transactions herein and
therein contemplated. The Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property, 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 Company and its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of 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
Company and its subsidiaries, taken as a whole.
(f) The Trust has been duly created and is validly existing as a
business trust in good standing under the Delaware Act, has the power and
authority to own its property and to conduct its business as described in the
Prospectus, to issue and sell the Preferred Securities and the Common
Securities, and to enter into and perform its obligations under this Agreement,
the Preferred Securities, the Common Securities and the Declaration and to
consummate the transactions herein and therein contemplated; the Trust has no
subsidiaries and is duly qualified to transact business and in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to do 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 otherwise bound by
any agreement other than those described in the Prospectus, and is not a party
to any action, suit or proceeding of any nature; the Trust is not and will not
be classified as an association taxable as a corporation for United States
federal income tax purposes; and the Trust is and will be treated as a
consolidated subsidiary of the Company.
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(g) The Common Securities have been duly authorized and, when issued
and delivered by the Trust to the Company against payment therefor as described
in the Registration Statement and Prospectus, will be validly issued common
undivided beneficial interests in the assets of the Trust; the issuance of the
Common Securities is not subject to preemptive or other similar rights; at the
Closing Date (as defined below), all of the issued and outstanding Common
Securities of the Trust will be, directly owned by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity; and
the Common Securities will conform to the descriptions thereof contained in the
Prospectus.
(h) This Agreement has been duly authorized, executed and delivered
by each of the Trust and the Company.
(i) The Declaration has been duly qualified under the Trust Indenture
Act, has been duly authorized by the Company and, at the Closing Time, will have
been duly executed and delivered by the Company and each of the Trustees, and
assuming due authorization, execution and delivery of the Declaration by the
Property Trustee (as defined in the Declaration), the Declaration will, on the
Closing Date, be a valid and binding obligation of the Company and the Trustees,
enforceable against the Company and the Trustees in accordance with its terms,
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights generally and
general principles of equity (whether as considered in a proceeding at law or in
equity) and will conform to the descriptions thereof in the Prospectus.
(j) The Preferred Securities Guarantee Agreement has been duly
qualified under the Trust Indenture Act, and each of the Guarantee Agreements
has been duly authorized by the Company and, when validly executed and delivered
by the Company, will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms; and the Guarantees
and the Guarantee Agreement will conform to the descriptions thereof contained
in the Prospectus.
(k) The Preferred Securities have been duly authorized and, when
issued and delivered against payment therefor in accordance with the provisions
of this Agreement and the Declaration, will be validly issued and (subject to
the terms of the Declaration) fully paid and non-assessable preferred undivided
beneficial interests in the assets of the Trust, and be entitled to the benefits
of the Declaration; the issuance of the Preferred Securities is not subject to
preemptive or other similar rights; holders of 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 "GCL"); the Preferred Securities will conform to
the description thereof contained in the Prospectus.
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(l) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized by the Company and, when validly executed and
delivered by the Company, will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally or by general
principles of equity (whether considered in a proceeding at law or in equity);
the Indenture will conform to the description thereof contained in the
Prospectus.
(m) The Subordinated Debt Securities have been duly authorized and,
on the Closing Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered against
payment therefor as described in the Prospectus, will be entitled to the
benefits, of the Indenture, will rank PARI PASSU without any preference among
themselves and subordinated to all Senior Indebtedness (as defined in the
Indenture) and will constitute validly and binding obligations of the Company,
enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency or other similar
laws affecting creditors' rights generally or by general or by general
principles of equity (whether considered in a proceeding at law or in equity).
(n) The Company's obligations under the Guarantees are subordinate
and junior in right of payment to all liabilities of the Company and are pari
passu with the most senior preferred stock issued by the Company.
(o) Merle D. Lewis and Richard R. Hylland, as Trustees (the "Regular
Trustees") of the Trust, are employees of the Company and have been duly
authorized by the Company to execute and deliver the Declaration.
(p) Neither the Trust nor the Company is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(q) Neither the Company nor any of its subsidiaries is in violation
of its charter or by-laws; the Trust is not in violation of the Declaration or
its Certificate of Trust filed with the State of Delaware on June 19, 1995 (the
"Certificate of Trust"); none of the Company, any of its subsidiaries or the
Trust is in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company, any of its
subsidiaries or the Trust is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company, any of its
subsidiaries or the Trust is subject, except for such
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defaults that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business prospects of
the Trust or of the Company and its subsidiaries, taken as a whole; and the
execution, delivery and performance of this Agreement, the Declaration, the
Preferred Securities, the Common Securities, the Indenture, the Subordinated
Debt Securities, the Guarantee Agreements and the Guarantees and the
consummation of the transactions contemplated herein and therein and compliance
by the Trust and the Company with their respective obligations hereunder and
thereunder have been duly authorized by all necessary action (corporate or
otherwise) on the part of the Trust and the Company and do not and will not
result in any violation of the charter or by-laws of the Company or any
subsidiary, or the Declaration or Certificate of Trust and do not and will not
conflict with, or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Trust, the Company or
any subsidiary under (A) any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which the Trust, the Company or
any subsidiary is a party or by which it may be bound or to which any of its
properties may be subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or business
prospects of the Trust or the Company and its subsidiaries, taken as a whole as
one enterprise) or (B) any existing applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, or any regulatory body or administrative agency or other
governmental body having jurisdiction over the Trust, the Company, or any
subsidiary or any of their respective properties.
(r) There are no legal or governmental proceedings pending or
threatened to which the Company, any of its subsidiaries or the Trust is a party
or to which any of the properties of the Company, any of its subsidiaries or the
Trust is subject that are required to be described in the Registration Statement
or the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(s) The Federal Energy Regulatory Commission (the "FERC") has issued
an appropriate order or orders with respect to the issuance and sale of the
Company Securities in accordance with, and as contemplated by, this Agreement;
such order or orders are in full force and effect; the issuance and sale of the
Company Securities are in conformity with the terms of such order or orders; and
no other authorization, approval or consent of any other governmental body or
agency is legally required for the issuance and sale of the Common Securities,
the Preferred
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Securities and the Company Securities as contemplated by this Agreement, except
such as have been obtained under the Securities Act and the Trust Indenture Act
and such as may be required under the state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters.
(t) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries (taken as a whole) or the Trust from that set forth
in the Prospectus.
(u) On the basis of the present knowledge of the senior management of
the Company as to the business and affairs of Synergy Group Incorporated, a
Delaware corporation ("Synergy"), and its subsidiaries, the Company has no
reason to believe that the representations contained in subsections (r) and (t)
above would be incorrect in any material respect on the date hereof as a result
of the consummation of the acquisition of such business on the terms described
in the Prospectus (the "Acquisition").
(v) The unaudited pro forma consolidated financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus have been prepared in good faith by the Company, and the assumptions
on which such pro forma financial statements have been prepared provide a
reasonable basis for presenting the significant effects directly attributable to
the Acquisition described in the notes thereto.
(w) The Company is not aware of any facts or circumstances that would
prevent any of the conditions to the consummation of the Acquisition contained
in the Purchase and Sale Agreement dated as of May 17, 1995, by and among
Synergy and the other parties thereto (the "Acquisition Agreement") from being
satisfied in the ordinary course on or prior to September 30, 1995.
2. PUBLIC OFFERING. The Trust and the Company are advised by the
Representative that the Underwriters propose to make a public offering of their
respective portions of the Preferred Securities as soon after this Agreement has
been entered into as in the judgment of the Representative is advisable. The
terms of the public offering of the Preferred Securities are set forth in the
Prospectus.
3. PURCHASE AND DELIVERY. Subject to the terms and conditions set
forth or incorporated by reference herein, the Trust hereby agrees to sell, and
the Underwriters agree to purchase, severally and not jointly, the respective
number of Preferred Securities set forth below opposite their names in Schedule
I hereto at a purchase price of $[ ] per Preferred Security.
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<PAGE>
The Company agrees to issue the Company Securities concurrently with
the issue and sale of the Preferred Securities as contemplated herein. The
Company hereby guarantees the timely performance by the Trust of its obligations
under this Section 3. The Trust agrees to purchase the Subordinated Debt
Securities with the proceeds of, and concurrently with, the issue and sale of
the Securities.
As compensation to the Underwriters for their commitments hereunder,
and because the proceeds of the sale of the Preferred Securities will be loaned
by the Trust to the Company, the Company hereby agrees to pay on the Closing
Date to the Representative, for the accounts of the several Underwriters, an
amount equal to (i) in the case of such number of Preferred Securities as are
reserved by the Underwriters for sale to institutional investors, $ ____ per
Preferred Security and (ii) in the case of such number of Preferred Securities
as are not so reserved, $ _____ per Preferred Security. The Underwriters shall
inform the Company in writing, not later than the business day prior to the
Closing Date, of the number of Preferred Securities reserved for sale to such
institutional investors.
Payment for the Preferred Securities shall be made by certified or
official bank check or checks payable, or by wire transfer, to the order of the
Trust in immediately available funds at the office of Winthrop, Stimson, Putnam
& Roberts, New York, New York, at 10:00 A.M. local time, on _____, 1995, or at
such other time on the same or such other date, not later than _______, 199_, as
shall be designated in writing by the Representative. The time and date of such
payment are hereinafter referred to as the "Closing Date".
Certificates for the Preferred Securities shall be in definitive form
and registered in such names and in such denominations as the Underwriters shall
request not later than two full business days prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the
Preferred Securities shall be delivered to the Representative, through the
facilities of the Depository Trust Company ("DTC") for the account of the
Representative with any transfer taxes payable in connection with the transfer
of the Securities duly paid, against payment of the purchase price therefor.
4. CONDITIONS TO CLOSING. The several obligations of the
Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading in the rating
accorded any of the Company's securities by
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any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Company and its
subsidiaries, taken as a whole, or the Trust, from that set forth in the
Prospectus, that, in the judgment of the Representative, is material and
adverse and that makes it, in the judgment of the Representative,
impracticable to market the Preferred Securities on the terms and in the
manner contemplated in the Prospectus; and
(iii) the Company shall have obtained an appropriate order or
orders of the FERC authorizing the issuance, sale and delivery of the
Company Securities as contemplated by this Agreement, which order or orders
at the Closing Date shall be in full force and effect and shall not be
contested or the subject of review or appeal.
(b)(i) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company to the effect (x) set forth in clauses (a)(i) and (a)(iii) above; (y)
that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied on or before the Closing Date; and (z) that no
executive officer of the Company has received any notification from the Sellers
(as defined in the Acquisition Agreement) or their counsel that any information
(including without limitation financial information) relating to Synergy
contained or incorporated by reference in the Registration Statement or the
Prospectus contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The officer signing
and delivering such certificate may rely upon the best of his knowledge as to
proceedings threatened.
(ii) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an authorized representative
of the Trust to the effect set forth in clause (a)(i) above and to the effect
that the representations and warranties of the Trust contained in the
Underwriting Agreement are true and correct as of the Closing Date and that the
Trust has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied on or before the Closing
Date. The representative signing and delivering such certificate may rely upon
the best of his knowledge as to proceedings threatened.
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<PAGE>
(c) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Schiff Hardin & Waite, counsel to the Company
and the Trust, to the effect that
(i) the Company has been duly incorporated and, based upon
certificates or letters from state or other appropriate authorities, is
validly existing as a corporation in good standing under the laws of the
State of Delaware and is duly qualified and in good standing as a foreign
corporation in the States of Iowa, Nebraska, North Dakota and South Dakota,
with corporate powers and statutory authority to carry on the business
which it now carries on as stated in the Prospectus and to own and operate
the properties used by it in such business;
(ii) each subsidiary of the Company has been duly incorporated
and based upon certificates or letters from state or other appropriate
authorities, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation with corporate powers and
statutory authority to carry on the business which it now carries on as
stated in the Prospectus and to own and operate the properties used by it
in such business and is duly qualified and in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of 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 Company and its subsidiaries, taken as a
whole;
(iii) the Underwriting Agreement has been duly authorized,
executed and delivered by the Trust and the Company;
(iv) the FERC has issued an appropriate order or orders with
respect to the issuance and sale of the Company Securities, in accordance
with, or as contemplated by, the Underwriting Agreement; such order or
orders are in full force and effect; the issuance and sale of the Company
Securities are in conformity with the terms of such order or orders; and no
other authorization, approval or consent of any other governmental body or
agency (including, without limitation, in the jurisdictions of South
Dakota, Nebraska, North Dakota and Iowa) is legally required for the
issuance and sale of the Common Securities, the Preferred Securities and
the Company Securities as contemplated by the Underwriting Agreement,
except such as have been obtained under the Securities Act and the Trust
Indenture Act and such as may be required under the state securities or
Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters;
(v) the statements (A) in the Prospectus under the captions "Risk
Factors," "NWPS Capital Financing I,"
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"Description of the Preferred Securities," "Description of the Subordinated
Debt Securities," "Effect of Obligations Under the Subordinated Debt
Securities and the Guarantee," "United States Federal Income Taxation,"
"Underwriting, "Pending Acquisition of Synergy Group Incorporated," "The
NWPS Trusts," "Description of the Subordinated Debt Securities,"
"Description of the Guarantees," and "Plan of Distribution," (B) in the
Registration Statement under Item 15, (C) in "Item 3 - Legal Proceedings"
of the Company's most recent annual report on Form 10-K incorporated by
reference in the Prospectus and (D) in "Item 1 - Legal Proceedings" of Part
II of the Company's quarterly reports on Form 10-Q filed since such annual
report and reviewed by such counsel, in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(vi) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any
of its subsidiaries, or the Trust, is a party or to which any of the
properties of the Company or any of its subsidiaries, or the Trust, is
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required;
(vii) neither the Trust nor the Company is (x) an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act, or (y) a "holding company"
as such term is defined in the Public Utility Holding Company Act of 1935,
as amended.
(viii) the Registration Statement has become and is effective
under the Securities Act, and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for a stop order with respect thereto are
pending or threatened under Section 8(d) of the Securities Act; and
(ix) such counsel (A) is of the opinion that (except for
financial statements and schedules included therein as to which such
counsel need not express any opinion) each document, if any, filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
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complied when so filed as to form in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (B) believes that (except for financial statements and
schedules as to which such counsel need not express any belief and except
for that part of the Registration Statement that constitutes the Form T-l
heretofore referred to) each part of the Registration Statement, when such
part became effective did not, and, as of the date such opinion is
delivered, does not contain 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 not misleading, (C) is of the opinion that the
Registration Statement and Prospectus (except for financial statements and
schedules included therein as to which such counsel need not express any
opinion), comply as to form in all material respects with the Securities
Act and the applicable rules and regulations of the Commission thereunder
and (D) believes that (except for financial statements and schedules as to
which such counsel need not express any belief) the Prospectus as of the
date such opinion is delivered does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(x) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to the
formation and valid existence of the Trust as a business trust have been
made; the Trust has all necessary power and authority to own property and
to conduct its business as described in the Prospectus, to issue and sell
the Preferred Securities and the Common Securities, and to enter into and
perform its obligations under this Agreement, the Preferred Securities, the
Common Securities and the Declaration and to consummate the transactions
herein and therein contemplated; the Trust has no subsidiaries and is duly
authorized to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, and is not required to be
authorized to do business in any other jurisdiction; the Trust is not a
party to or otherwise bound by any agreement other than those described in
the Prospectus, and is not a party to any action, suit or proceeding of any
nature; the Trust is not and will not be classified as an association
taxable as a corporation for United States federal income tax purposes.
(xi) The Declaration has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and the Trustees and is a valid and binding obligation of the
Company and each of the Regular Trustees enforceable against the Company
and each of
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the Regular Trustees in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws affecting
creditors' rights generally and by general principles of equity (whether
considered in a proceeding, in equity or at law).
(xii) The Common Securities have been duly authorized and are
validly issued common undivided beneficial interests in the assets of the
Trust; and the issuance of the Common Securities is not subject to
preemptive or other similar rights.
(xiii) The Preferred Securities have been duly authorized and
are validly issued and (subject to the terms of the Declaration) when
delivered to and paid for by Underwriters pursuant to this Agreement will
be validly issued, fully paid and non-assessable preferred undivided
beneficial interests in the assets of the Trust; the 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 GCL; and the issuance of the Preferred Securities is
not subject to preemptive or other similar rights.
(xiv) The issuance and sale by the Trust of the Preferred
Securities and Common Securities, the execution, delivery and performance
by the Trust of this Agreement, the Guarantee Agreements, and the
consummation of the transactions contemplated hereby and thereby and
compliance by the Trust with its obligations hereunder and thereunder have
been duly authorized by all necessary actions of the Trust and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Trust pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Trust is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Trust is subject, nor will such action result in any
violation of the provisions of the Certificate of Trust or the Declaration,
or any applicable law, administrative regulation or administrative or court
decree to which it is subject.
(xv) The Trust is not in violation of its Certificate of Trust
or the Declaration or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or any other
instrument of which the Trust is a party or by which it may be bound, or to
which any of the property or assets of the Trust is subject.
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(xvi) The Common Securities, the Preferred Securities, the
Subordinated Debt Securities, the Guarantees, the Declaration, the
Indenture and the Guarantee Agreements conform to all statements relating
thereto contained in the Prospectus.
(xvii) All of the issued and outstanding Common Securities of
the Trust are directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(xviii) This Agreement has been duly authorized, executed and
delivered by the Trust and the Company.
(xix) Each of the Guarantee Agreements has been duly authorized,
executed and delivered by the Company and, (in the case of the Preferred
Security Guarantee Agreement only) assuming it is duly authorized,
executed, and delivered by the Property Trustee, constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws involving
creditors' rights generally and general principles of equity (whether
considered in a proceeding at law or in equity); and the Preferred
Securities Guarantee Agreement has been duly qualified under the Trust
Indenture Act.
(xx) The Indenture has been duly executed and delivered by the
Company and, assuming due authorization, execution, and delivery thereof by
the Debt Trustee, is a valid and binding obligation of the Company,
enforceable in accordance with its terms, except to the extent that
enforcement thereof may be limited by the bankruptcy, insolvency or other
similar laws involving creditors' rights generally and general principles
of equity (whether considered in a proceeding at law or in equity); and the
Indenture has been duly qualified under the Trust Indenture Act.
(xxi) The Subordinated Debt Securities are in the form
contemplated by the Indenture; the Subordinated Debt Securities have been
duly authorized, executed and delivered by the Company and when
authenticated by the Debt Trustee in the manner provided in the Indenture
and delivered against payment therefor, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws involving
creditors' rights generally and general principles of equity (whether
considered in a proceeding at law or in equity).
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(xxii) The execution, delivery and performance of this
Agreement, the Subordinated Debt Securities, the Guarantee Agreements, the
Indenture and the Guarantees and the consummation of the transactions
contemplated herein and therein and compliance by the Company with its
obligations hereunder and thereunder have been duly authorized by all
necessary action (corporate or otherwise) and do not and will not result in
any violation of the charter or by-laws of the Company or any subsidiary,
and do not and will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary under (A) any contract,
indenture, mortgage, loan agreement, note, lease or any other agreement or
instrument known to such counsel, to which the Company or any subsidiary is
a party or by which it may be bound or to which any of its properties may
be subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise), (B) any existing applicable law, rule or regulation (other
than the securities or blue sky laws of the various states, as to which
such counsel need express no opinion), or (C) any judgment, order or decree
of any government, governmental instrumentality or court, domestic or
foreign, or any regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or any subsidiary or
any of their respective properties.
(d) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Richards, Layton & Finger, Delaware counsel to
the Company and the Trust, with respect to the matters referred to in
subparagraphs (x), (xi), (xii), (xiii), (xiv), (xv) and (xviii).
(e) The Representative shall have received on the Closing Date,
opinions dated the Closing date of _________________________________, counsel to
Wilmington Trust Company, as Property Trustee under the Declaration, and
Guarantee Trustee under the Guarantee Agreements, in form and substance
satisfactory to counsel for the Underwriters, to the effect that,
(i) Wilmington Trust Company ("WTC") is duly organized, validly
existing and in good standing as a banking corporation with trust powers
under the laws of the State of Delaware.
(ii) WTC, the Property Trustee and the Guarantee Trustee each has all
necessary power and authority to execute and deliver, and to carry out and
perform its
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obligations under the terms of the Declaration and the Guarantee
Agreements.
(iii) The execution, delivery and performance by the Property Trustee
of the Declaration and the Guarantee Agreements have been duly authorized
by all necessary corporate action on the part of the Property Trustee. The
Declaration and the Guarantee Agreements have been duly executed and
delivered by the Property Trustee, and constitutes the legal, valid and
binding obligation of the Property Trustee, enforceable against the
Property Trustee in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws affecting
creditors' rights generally and by general principles of equity (whether
considered in a proceeding in equity or at law).
(iv) The execution, delivery and performance of the Declaration and
the Guarantee Agreements by WTC, the Property Trustee or the Guarantee
Trustee, as the case may be, do not conflict with or constitute a breach of
the Articles of Organization or Bylaws of the WTC.
(v) No consent, approval or authorization of, or registration with or
notice to, any governmental authority or agency of the State of Delaware or
United States governing the banking trust powers of WTC is required for the
execution, delivery or performance by the Property Trustee or the Guarantee
Trustee, as the case may be, of the Declaration and the Guarantee
Agreements.
(vi) The Property Trustee is the record holder of the Subordinated
Debt Securities and the Guarantees and no security interest, mortgage,
pledge, lien, encumbrance, claim or equity is noted thereon or on the
register.
(f) The Representative shall have received on the Closing Date an
opinion dated the Closing Date, of Winthrop, Stimson, Putnam & Roberts, counsel
for the Underwriters, covering such matters as the Underwriters may reasonably
request.
With respect to subparagraph (ix) of paragraph (c) above, Schiff
Hardin & Waite, counsel to the Company, may state that its opinion and belief
are based upon its participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto (excluding
(for purposes of clauses (B) and (D) of such paragraph ) certain of the
documents incorporated by reference therein (to be specified in such opinion))
and review and discussion of the contents thereof (including the documents
incorporated by reference therein), but are without independent check or
verification, except as specified.
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The opinions of Schiff Hardin & Waite, special counsel to the Company
and Richards, Layton & Finger, Delaware counsel to the Company and the Trust
described in paragraphs (c) and (d) above shall be rendered to the Underwriters
at the request of the Company and shall so state therein.
(g) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from Arthur Andersen LLP, the Company's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Prospectus. Such letter shall include,
without limitation, statements to the effect that (i) the unaudited pro forma
condensed consolidated financial statements included or incorporated by
reference in the Prospectus comply as to form with the applicable accounting
requirements of Rule 11-02 of Regulation S-X of the Commission, (ii)
management's assumptions provide a reasonable basis for presenting the
significant effects directly attributable to the Acquisition described in the
notes to the unaudited pro forma condensed consolidated financial statements,
(iii) the related pro forma adjustments give appropriate effect to those
assumptions, and (iv) the pro forma column reflects the proper application of
those adjustments to the historical financial statement amounts contained in
such unaudited pro forma consolidated statements.
(h) The Representative shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Representative, from Arthur Andersen LLP, the Company's independent public
accountants, to the effect that such accountants reaffirm, as of the Closing
Date, and as though made on the Closing Date, the statements made in the letter
furnished by such accountants pursuant to Section 4(g), except that the
specified date referred to therein shall be a date not more than five business
days prior to the Closing Date.
(i) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from KPMG Peat Marwick LLP, Synergy's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information of Synergy
contained or incorporated by reference into the Prospectus.
(j) At the Closing Date, a registration statement on Form 8-A under
the Exchange Act with respect to the Preferred Securities shall be effective and
the Preferred Securities shall
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have been approved for listing on the New York Stock Exchange upon notice of
issuance.
(k) On the Closing Date, Standard & Poor's and Moody's Investors
Service, Inc. shall have publicly assigned to the Preferred Securities ratings
of ___ and ___, respectively, which ratings shall be in full force and effect on
the Closing Date.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
at any time at or prior to the Closing Date, and such termination shall be
without liability of any party to any other party except as provided in Section
5(i) hereof.
5. COVENANTS OF THE TRUST AND THE COMPANY. In further consideration
of the agreements of the Underwriters herein contained, the Trust and the
Company covenant as follows:
(a) To furnish the Representative, without charge, a signed copy of
the Registration Statement (including exhibits thereto) and to deliver to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and, during the period mentioned in paragraph (c) below, as
many copies of the Prospectus, any documents incorporated by reference therein
and any supplements and amendments thereto or to the Registration Statement as
the Underwriters may reasonably request (delivery of the Prospectus to be made
in New York, New York no later than 10:00 A.M. on the business day immediately
succeeding the date of this Agreement).
(b) To cause the Prospectus to be filed with the Commission pursuant
to and in compliance with Rule 424 under the Act.
(c) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to the Underwriters a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which the Underwriters reasonably object.
(d) If, during such period after the first date of the public
offering of the Preferred Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event shall occur or condition exist
as a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the Underwriters, and to the dealers (whose
names and addresses the
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Representative will furnish to the Company) to which Preferred Securities may
have been sold by the Underwriters on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the Prospectus
so that the statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with law.
(e) To endeavor to qualify the Preferred Securities and Subordinated
Debt Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriters shall reasonably request and to maintain such
qualification for as long as the Underwriters shall reasonably request.
(f) To make generally available to the Trust's security holders and
to the Representative as soon as practicable an earning statement covering a
twelve month period beginning on the first day of the first full fiscal quarter
after the date of the Underwriting Agreement, which earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder. If such fiscal quarter is the last
fiscal quarter of the Company's fiscal year, such earning statement shall be
made available not later than 90 days after the close of the period covered
thereby and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(g) During the period ending [90] days after the date of this
Agreement, without the prior written consent of Morgan Stanley & Co.
Incorporated, not to (1) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any debt securities or preferred securities of the
Company or the Trust or warrants to purchase debt securities or preferred
securities of the Company or the Trust substantially similar to the Preferred
Securities or any securities convertible into or exercisable or exchangeable
therefor (other than (i) the Preferred Securities, (ii) commercial paper issued
in the ordinary course of business and (iii) other debt securities evidencing
commercial bank loans), or (2) enter into any swap or similar arrangement that
transfers, in whole or in part, the economic risk or ownership of the foregoing,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Preferred Securities or such other securities, in cash or
otherwise.
(h) To use its reasonable efforts to cause each of its current
executive officers and directors to refrain, during the period ending [90] days
after the date of this Agreement, without the prior written consent of Morgan
Stanley & Co. Incorporated, from (1) offering, pledging, selling, contracting to
sell,
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granting any option, right or warrant to purchase, or otherwise transferring or
disposing of, directly or indirectly, any debt securities or preferred
securities of the Company or the Trust substantially similar to the Preferred
Securities or any securities convertible into or exercisable or exchangeable
therefor or (2) entering into any swap or similar arrangement that transfers, in
whole or in part, the economic risk or ownership of the foregoing, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Preferred Securities or such other securities, in cash or otherwise.
(i) Whether or not any sale of Preferred Securities is consummated,
to pay all expenses incident to the performance of its obligations under the
Underwriting Agreement, including: (i) the preparation and filing of the
Registration Statement and the Prospectus and all amendments and supplements
thereto, (ii) the preparation, issuance and delivery of the Preferred
Securities, (iii) the fees and disbursements of the Company's counsel and
accountants and of the Trustee and its counsel, (iv) the qualification of the
Preferred Securities under securities or Blue Sky laws in accordance with the
provisions of Section 5(d), including filing fees and the fees and disbursements
of counsel for the Underwriters in connection therewith and in connection with
the preparation of any Blue Sky Memoranda in an aggregate amount not to exceed
$10,000, (v) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and all amendments
thereto and of the Prospectus and any amendments or supplements thereto, (vi)
any fees charged by rating agencies for the rating of the Preferred Securities,
(vii) the fees and expenses, if any, incurred with respect to any filing with
the National Association of Securities Dealers, Inc., and (viii) the fees and
expenses, if any, incurred in connection with the listing of the Preferred
Securities on any securities exchange.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and the Trust
agree to jointly and severally indemnify and hold harmless each Underwriter and
each person, if any, who controls such Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred by any Underwriter
or any such controlling person in connection with investigating or defending any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company or the Trust shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused
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<PAGE>
by any such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any Underwriter furnished to the Company or
the Trust in writing by such Underwriter expressly for use therein.
(b) The Company agrees jointly and severally to indemnify the Trust
against all loss, liability, claim, damage and expense whatsoever, as due from
the Trust under Section 6(a) hereof.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the directors, officers or Trustees of the Company or the
Trust who sign the Registration Statement and each person, if any, who controls
the Company or the Trust within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company and the Trust to such Underwriter, but only
with reference to information relating to such Underwriter furnished to the
Company and Trust in writing by such Underwriter expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representative, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The
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<PAGE>
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(e) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 6 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Trust on the one hand and the
Underwriters on the other hand from the offering of the Preferred Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company or the Trust on the one hand and of the Underwriters on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Trust on
the one hand and the Underwriters on the other hand in connection with the
offering of the Preferred Securities shall be deemed to be in the same
respective proportions as the net proceeds from the offering of such Securities
(before deducting expenses) received by the Company and the Trust and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus Supplement, bear
to the aggregate public offering price of the Preferred Securities. The
relative fault of the Company and the Trust on
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the one hand and of the Underwriters on the other hand 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 relates to information supplied by the Company or the Trust or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this
Section 6 are several in proportion to the respective principal amounts of
Preferred Securities they have purchased hereunder, and not joint.
(f) The Company, the Trust and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, 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 that
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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
7. TERMINATION. This Agreement shall be subject to termination, by
notice given by the Representative to the Company and the Trust, if (a) after
the execution and delivery of the Underwriting Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Trust or the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets
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or any calamity or crisis that, in the judgment of the Representative, is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event, singly or together with any other such
event, makes it, in the judgment of the Representative, impracticable to market
the Preferred Securities on the terms and in the manner contemplated in the
Prospectus. This Agreement may also be terminated at any time prior to the
Closing Date if in the judgment of the Representative the subject matter of any
amendment or supplement to the Registration Statement or Prospectus prepared and
furnished by the Company and its subsidiaries, taken as a whole, or the Trustee
reflects a material adverse change in the business, properties or financial
condition of the Company or the Trust which renders it either inadvisable to
proceed with such offering, if any, or inadvisable to proceed with the delivery
of the Preferred Securities to be purchased hereunder.
8. DEFAULTING UNDERWRITERS. If, on the Closing Date or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase the Preferred Securities that it has or they have agreed
to purchase hereunder on such date, and the aggregate amount of Preferred
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate amount of the
Preferred Securities to be purchased on such date, the other Underwriters shall
be obligated severally in the proportions that the amount of Preferred
Securities set forth opposite their respective names in the Underwriting
Agreement bears to the aggregate amount of Preferred Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as the Representative may specify, to purchase the Preferred
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; PROVIDED that in no event shall the amount
of Preferred Securities that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 8 by an amount in excess of
one-ninth of such amount of Preferred Securities without the written consent of
such Underwriter. If, on the Closing Date or the Option Closing Date, as the
case may be, any Underwriter or Underwriters shall fail or refuse to purchase
Securities that it has or they have agreed to purchase and the aggregate amount
of Preferred Securities with respect to which such default occurs is more than
one-tenth of the aggregate amount of Preferred Securities to be purchased on
such date, and arrangements satisfactory to the Representative and the Company
for the purchase of such Preferred Securities are not made within 36 hours after
such default, the Underwriting Agreement shall terminate without liability on
the part of any non-defaulting Underwriter, the Company or the Trust. In any
such case either the Representative or the Company shall have the right to
postpone the Closing Date or the Option Closing Date, as the case may be, but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and
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<PAGE>
in the Prospectus or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
the Underwriting Agreement.
If the Underwriting Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company or
the Trust to comply with the terms or to fulfill any of the conditions of the
Underwriting Agreement, or if for any reason the Company or the Trust shall be
unable to perform its obligations under the Underwriting Agreement, the Company
and the Trust will reimburse the Underwriters or such Underwriters as have so
terminated the Underwriting Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with the
Underwriting Agreement or the offering of the Preferred Securities.
If the Underwriting Agreement shall be terminated by the Company
because of any failure or refusal on the part of the Underwriters to comply with
the terms or to fulfill any of the conditions of the Underwriting Agreement, or
if for any reason the Underwriters shall be unable to perform their obligations
under the Underwriting Agreement, the Underwriters will reimburse the Company
for all out-of-pocket expenses (including the fees and disbursements of its
counsel) reasonably incurred by the Company in connection with the Underwriting
Agreement or the offering of the Preferred Securities.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
indemnity and contribution agreements and the representations, warranties and
other statements of the officers or Trustees of the Company and the Trust (as
the case may be) and the Underwriters set forth in the Underwriting Agreement
will remain in full force and effect, regardless of any termination of the
Underwriting Agreement, any investigation made by or on behalf of any
Underwriter, the Company or the Trust or any of the officers, directors or
controlling persons referred to in Section 6 and delivery of and payment for the
Preferred Securities.
10. SUCCESSORS. This Agreement will enure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
11. COUNTERPARTS. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
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12. APPLICABLE LAW. The Underwriting Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
13. HEADINGS. The headings of the sections of the Underwriting
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of the Underwriting Agreement.
14. NOTICES. All communications hereunder will be in writing and, if
sent to (i) the Underwriters, will be mailed, delivered or telecopied and
confirmed to Morgan Stanley & Co. Incorporated at 1251 Avenue of the Americas,
New York, New York 10020, Attn: Mr. Jay D. Hatfield, (ii) the Company, will be
mailed, delivered or telecopied and confirmed to it at 33 Third Street SE,
Huron, South Dakota 57350, Attn: Mr. Richard R. Hylland, Vice President --
Finance & Corporate Development, Telecopy No: (605) 353-8286 and (iii) the
Trust, will be mailed, delivered or telecopied and confirmed to it at 33 Third
Street SE, Huron, South Dakota 57350.
15. DEFINITION OF "SUBSIDIARY". The term "subsidiary," as used in
this Agreement, shall be deemed to refer only to (i) those direct or indirect
subsidiaries of the Company which would qualify as "significant subsidiaries"
pursuant to Rule 405 under the Securities Act, and (ii) SYN Inc.
16. CERTAIN AGREEMENTS AND REPRESENTATIONS OF NATWEST CAPITAL MARKETS
LIMITED. NatWest Capital Markets Limited agrees and represents that (i) it has
not offered or sold and will not offer or sell any Preferred Securities to
persons in the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstance which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, (ii) it has complied with and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Preferred Securities in, from or
otherwise involving the United Kingdom and (iii) it has only issued or passed on
and will only issue or pass on in the United Kingdom any document received by it
in connection with the issue of the Preferred Securities to a person who is of a
kind described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements)(Exemptions) Order 1995 or is a person to whom such document may
otherwise lawfully be issued or passed on.
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Please confirm your agreement by having an authorized officer sign a
copy of the Underwriting Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
PIPER JAFFRAY INC.
NATWEST CAPITAL MARKETS LIMITED
Acting severally on behalf of itself and
the several Underwriters named herein
By: MORGAN STANLEY & CO. INCORPORATED
By: _______________________________
Name:
Title:
Accepted, ______ __, 1995
NWPS CAPITAL FINANCING I
By: _______________________________
Name:
Title: Trustee
By: _______________________________
Name:
Title: Trustee
NORTHWESTERN PUBLIC SERVICE COMPANY
By: _______________________________
Name:
Title:
<PAGE>
SCHEDULE I
Number of
Name of Underwriter Preferred Securities
- ------------------- --------------------
Morgan Stanley & Co. Incorporated. . . . . . . . __________
Dean Witter Reynolds Inc.. . . . . . . . . . . . __________
PaineWebber Incorporated . . . . . . . . . . . . __________
Piper Jaffray Inc. . . . . . . . . . . . . . . . __________
NatWest Capital Markets Limited. . . . . . . . . __________
________________
Total
________________
________________
<PAGE>
Exhibit 1(c)
WSP&R
DRAFT
7/25/95
MORTGAGE BONDS
UNDERWRITING AGREEMENT
NORTHWESTERN PUBLIC SERVICE COMPANY
33 Third Street SE
Huron, South Dakota 57350-1318
______ __, 1995
Ladies and Gentlemen:
On the basis of the representations and warranties, and subject to the
terms and conditions, set forth in this agreement ("this Agreement" or the
"Underwriting Agreement"), we, the Underwriters (as defined below), understand
that Northwestern Public Service Company, a Delaware corporation (the
"Company"), proposes to issue and sell to the Underwriters $__________ aggregate
principal amount of its New Mortgage Bonds, _% Series due ____________ (the
"Bonds"). The Bonds will be issued pursuant to the provisions of the General
Mortgage Indenture and Deed of Trust dated as of August 1, 1993 between the
Company and The Chase Manhattan Bank (National Association), as Trustee (the
"Trustee"), as it will be supplemented by a supplemental indenture (the
"Supplemental Indenture") relating to the Bonds (said Mortgage Indenture and
Deed of Trust as so supplemented is hereinafter referred to as the "Indenture").
The Bonds will be a portion of the Company's New Mortgage Bonds issued under the
Indenture (the "New Mortgage Bonds").
The term "Underwriters," as used herein, shall be deemed to mean the
several persons, firms or corporations named in Schedule I hereto, and the term
"Representative," as used herein, shall be deemed to mean the representative or
representatives of such Underwriters by whom or on whose behalf this
Underwriting Agreement is signed. If there shall be one person, firm or
corporation named in Schedule I, the term "Underwriters" and the term
"Representative," as used herein, shall mean that person, firm or corporation.
All obligations of the Underwriters are several and not joint. The use of the
term "Underwriter" herein shall not be deemed to establish or admit that a
purchaser of the Bonds is an "underwriter" of the Bonds as such term is defined
in and used under the Securities Act of 1933, as amended (the "Securities Act").
<PAGE>
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (Registration Statement
No. 33-60423), including a prospectus, relating to the Bonds, and has filed
with, or transmitted for filing to, or shall promptly hereafter file with or
transmit for filing to, the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to the Bonds pursuant to Rule 424 under the
Securities Act. The term "Registration Statement" means the registration
statement, including the exhibits thereto, as amended to the date of this
Agreement. The term "Basic Prospectus" means the prospectus included in the
Registration Statement, as amended and supplemented to the date of this
Agreement (exclusive of any supplement to the prospectus relating solely to
securities other than the New Mortgage Bonds). The term "Prospectus" means the
Basic Prospectus together with the Prospectus Supplement. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating to
the Bonds, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement", "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and, to
the Company's knowledge, after due inquiry, no proceedings for such purpose are
pending before or threatened by the Commission.
(c) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder or pursuant to
said rules and regulations will be deemed to comply therewith; (ii) each part of
the Registration Statement, when such part became effective, did not contain,
and each such part, as amended or supplemented, if applicable, will not contain
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 not
misleading; (iii) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder or pursuant to said rules and regulations will be deemed
to
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comply therewith; and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section 1(c) do
not apply (A) to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter expressly for use therein or (B) to that
part of the Registration Statement that constitutes the Statement of Eligibility
(Form T-l) under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), of the Trustee.
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and to enter into and perform its obligations under
the Underwriting Agreement, the Indenture and the Bonds. The Company is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of 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
Company and its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of 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
Company and its subsidiaries, taken as a whole.
(f) This Agreement has been duly authorized, executed and delivered
by the Company.
(g) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Underwriting Agreement, the
Indenture and the Bonds will not conflict with, result in a breach of or
constitute a default under any provision of (A) applicable law (except for the
indemnification provisions hereof which may be unenforceable as against public
policy under certain circumstances), (B) the certificate of incorporation or by-
laws of the Company, (C) any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any of its subsidiaries is a
party that is material to the Company and its subsidiaries, taken
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<PAGE>
as a whole, or (D) any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary.
(h) The Federal Energy Regulatory Commission (the "FERC") has issued
an appropriate order or orders with respect to the issuance and sale of the
Bonds in accordance with the Underwriting Agreement; such order or orders are in
full force and effect; the issuance and sale of the Bonds are in conformity with
the terms of such order or orders; and no other authorization, approval or
consent of any other governmental body or agency is legally required for the
issuance and sale of the Bonds as contemplated by the Underwriting Agreement,
except such as have been obtained under the Securities Act and the Trust
Indenture Act and such as may be required under the state securities or Blue Sky
laws in connection with the purchase and distribution of the Bonds by the
Underwriters.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
(j) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described, or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.
(k) On the basis of the present knowledge of the senior management of
the Company as to the business and affairs of Synergy Group Incorporated, a
Delaware corporation ("Synergy"), and its subsidiaries, the Company has no
reason to believe that the representations contained in subsections (i) and (j)
above would be incorrect in any material respect on the date hereof as a result
of the consummation of the acquisition of such business on the terms described
in the Prospectus (the "Acquisition").
(l) The unaudited pro forma consolidated financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus have been prepared in good faith by the Company, and the assumptions
on which such pro forma financial statements have been prepared provide a
reasonable basis for presenting the significant effects directly attributable to
the Acquisition described in the notes thereto.
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(m) The Company is not aware of any facts or circumstances that would
prevent any of the conditions to the consummation of the Acquisition contained
in the Purchase and Sale Agreement dated as of May 17, 1995, by and among
Synergy and the other parties thereto (the "Acquisition Agreement") from being
satisfied in the ordinary course on or prior to September 30, 1995.
2. PUBLIC OFFERING. The Company is advised by the Underwriters that
they propose to make a public offering of their respective portions of the Bonds
as soon after the Underwriting Agreement has been entered into as in the
Underwriters' judgment is advisable. The terms of the public offering of the
Bonds are set forth in the Prospectus.
3. PURCHASE AND DELIVERY. Subject to the terms and conditions herein
set forth, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective principal amounts of Bonds
set forth opposite the name of such Underwriter in Schedule I hereto at the
purchase price set forth in Schedule II in the type of funds and method of
payment specified in Schedule II.
Delivery of the Bonds and payment of the purchase price shall be made
at the time, date and place indicated in Schedule II. The time and date of such
payment and delivery are hereinafter referred to as the Closing Date.
The Bonds shall be delivered to the Underwriters in such authorized
denominations and registered in such names as the Representative shall request
in writing not less than two full business days prior to the date of delivery.
The Company agrees to make the Bonds available to the Underwriters for checking
not later than 2:30 P.M., New York time, on the last business day preceding the
Closing Date at such place as may be agreed upon between the Representative and
the Company.
4. CONDITIONS TO CLOSING. The several obligations of the
Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading in the rating
accorded any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act;
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Company and its
subsidiaries,
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taken as a whole, from that set forth in the Prospectus, that, in the
judgment of the Representative, is material and adverse and that makes it,
in the judgment of the Representative, impracticable to market the Bonds on
the terms and in the manner contemplated in the Prospectus; and
(iii) the Company shall have obtained an appropriate order or
orders of the FERC authorizing the issuance, sale and delivery of the Bonds
as contemplated by this Agreement, which order or orders at the Closing
Date shall be in full force and effect and shall not be contested or the
subject of review or appeal.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company to the effect (x) set forth in clause (a)(i) and (iii) above; (y) that
the representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has complied
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date; and (z) that no executive
officer of the Company has received any notification from the Sellers (as
defined in the Acquisition Agreement) or their counsel that any information
(including, without limitation, financial information) relating to Synergy
contained or incorporated by reference in the Registration Statement or the
Prospectus contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The officer
signing and delivering such certificate may rely upon the best of his knowledge
as to proceedings threatened.
(c) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Schiff Hardin & Waite, special counsel to the
Company, to the effect that
(i) the Company has been duly incorporated and, based upon
certificates or letters from state or other appropriate authorities, is
validly existing as a corporation in good standing under the laws of the
State of Delaware and is duly qualified and in good standing as a foreign
corporation in the States of Iowa, Nebraska, North Dakota and South Dakota,
with corporate powers and statutory authority to carry on the business
which it now carries on as stated in the Prospectus and to own and operate
the properties used by it in such business;
(ii) each subsidiary of the Company has been duly incorporated
and based upon certificates or letters from state or other appropriate
authorities, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation with corporate powers and
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<PAGE>
statutory authority to carry on the business which it now carries on as
stated in the Prospectus and to own and operate the properties used by it
in such business and is duly qualified and in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of 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 Company and its subsidiaries, taken as a
whole;
(iii) the Class "A" Bonds (as that term is defined in the
Indenture) which, at the date hereof, have been deposited with the Trustee
under the Indenture have been duly pledged, assigned and transferred to the
Trustee, and the Indenture constitutes a direct and valid first lien
thereupon; no registration, recording or filing of the Indenture (or
notices or financing statements in respect thereof) is required by law to
make effective and to maintain the lien intended to be created by the
Indenture on such Class "A" Bonds;
(iv) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency or
other laws affecting the enforcement of mortgagees' and other creditors'
rights and general equitable principles (whether considered in a proceeding
at law or in equity) and except that no opinion is expressed with respect
to the enforceability of the lien of the Indenture on chattels as against
third parties (other than chattels delivered in pledge to the Trustee), or
with respect to the enforceability of the lien of the Indenture on after
acquired property (in respect of which a supplemental indenture shall not
have been executed, delivered and recorded) as against purchasers for value
without notice;
(v) the Bonds have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of the Underwriting Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company, in each
case enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency or other laws affecting the enforcement
of mortgagees' and other creditors' rights and by general equitable
principles (whether considered in a proceeding at law or in equity);
(vi) each Class "A" Mortgage (as that term is defined in the
Indenture, including all supplemental indentures thereto executed and
delivered on or prior to the
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<PAGE>
Closing Date) has been duly and validly authorized by all necessary
corporate action, has been duly and validly executed and delivered, and is
a valid and binding instrument, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency or other laws affecting the
enforcement of mortgagees' and other creditors' rights and by general
equitable principles (whether considered in a proceeding at law or in
equity) and except that no opinion is expressed with respect to the
enforceability of the lien of each Class "A" Mortgage on chattels as
against third parties (other than chattels delivered in pledge to the Class
A Mortgage Trustee), or with respect to the enforceability of the lien of
the Class A Mortgage on after acquired property (in respect of which a
supplemental indenture shall not have been executed, delivered and
recorded) as against purchasers for value without notice;
(vii) each Class "A" Mortgage constitutes a valid and direct
first mortgage lien on the properties which are described therein subject
only to excepted encumbrances as defined therein and to minor defects and
encumbrances customarily found on properties of like size and character,
which do not materially impair the use of such properties by the Company;
(viii) the Class "A" Bonds which, at the date hereof, have been
deposited with the Trustee under the Indenture, have been duly authorized,
executed and delivered by the Company, have been issued in accordance with
the requirements of the applicable Class "A" Mortgage and are legal, valid
and binding obligations of the Company, enforceable in accordance with
their respective terms, except as limited by bankruptcy, insolvency or
other laws affecting the enforcement of mortgagees' and other creditors'
rights and by general equitable principles (whether considered in a
proceeding at law or in equity), and are entitled to the benefit of the
security afforded by the respective Class "A" Mortgage under which they
were issued;
(ix) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(x) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Indenture and the Bonds will not conflict with, result in a
breach of or constitute a default under any provision of (A) applicable law
(except for the indemnification provisions hereof which may be
unenforceable as against public policy under certain circumstances), (B)
the certificate of incorporation or by-laws of the Company, (C) to the best
of such counsel's knowledge, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its
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subsidiaries is a party that is material to the Company and its
subsidiaries, taken as a whole, or (D) to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any subsidiary;
(xi) the FERC has issued an appropriate order or orders with
respect to the issuance and sale of the Bonds in accordance with the
Underwriting Agreement; such order or orders are in full force and effect;
the issuance and sale of the Bonds are in conformity with the terms of such
order or orders; and no other authorization, approval or consent of any
other governmental body or agency (including, without limitation, in the
jurisdictions of South Dakota, Nebraska, North Dakota and Iowa) is legally
required for the issuance and sale of the Bonds as contemplated by the
Underwriting Agreement, except such as have been obtained under the
Securities Act and the Trust Indenture Act and such as may be required
under the state securities or Blue Sky laws in connection with the purchase
and distribution of the Bonds by the Underwriters;
(xii) the statements (A) in the Prospectus under the captions
"Certain Terms of the Offered Securities," "Description of the Mortgage
Bonds," "Underwriting" and "Plan of Distribution," (B) "Pending Acquisition
of Synergy Group Incorporated," (C) in the Registration Statement under
Item 15, (D) in "Item 3 - Legal Proceedings" of the Company's most recent
annual report on Form 10-K incorporated by reference in the Prospectus and
(E) in "Item 1 - Legal Proceedings" of Part II of the Company's quarterly
reports on Form 10-Q filed since such annual report and reviewed by such
counsel, in each case insofar as such statements constitute summaries of
the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to
therein;
(xiii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
and are not so described or of any statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed or incorporated by reference as
exhibits to the Registration Statement that are not described, filed or
incorporated as required;
(xiv) the Company is not (A) an "investment company" or an
entity "controlled" by an "investment
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company," as such terms are defined in the Investment Company Act of 1940,
as amended or (B) a "holding company" as such term is defined in the Public
Utility Holding Company Act of 1935, as amended;
(xv) the Registration Statement has become and is effective
under the Securities Act, and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for a stop order with respect thereto are
pending or threatened under Section 8(d) of the Securities Act; and
(xvi) such counsel (A) is of the opinion that (except for
financial statements and schedules included therein as to which such
counsel need not express any opinion) each document, if any, filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied when so filed as to form in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (B) believes that (except for financial statements and
schedules as to which such counsel need not express any belief and except
for that part of the Registration Statement that constitutes the Form T-l
heretofore referred to) each part of the Registration Statement, when such
part became effective did not, and, as of the date such opinion is
delivered, does not contain 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 not misleading, (C) is of the opinion that the
Registration Statement and Prospectus (except for financial statements and
schedules included therein as to which such counsel need not express any
opinion), comply as to form in all material respects with the Securities
Act and the applicable rules and regulations of the Commission thereunder
and (D) believes that (except for financial statements and schedules as to
which such counsel need not express any belief) the Prospectus as of the
date such opinion is delivered does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) The Representative shall have received on the Closing Date
opinions dated the Closing Date (i) of Churchill, Manolis, Freeman, Kludt &
Kaufman, South Dakota counsel to the Company, with respect to franchises and
titles to the properties of the Company, the validity and enforceability of the
lien of the Indenture and of each Class "A" Mortgage with respect thereto and
the non-necessity of authorization by any public body of the State of South
Dakota with respect to the issuance of the Bonds and the Class "A" Bonds, (ii)
of Shamberg, Wolf, McDermott & Depue, Nebraska counsel to the Company, with
respect to
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franchises and titles to the properties of the Company, the validity and
enforceability of the lien of the Indenture and of each Class "A" Mortgage with
respect thereto and the non-necessity of authorization by any public body of the
State of Nebraska with respect to the issuance of the Bonds and the Class "A"
Bonds, (iii) of Pearce & Durick, North Dakota counsel to the Company, with
respect to titles to the properties of the Company, the validity and
enforceability of the lien of the Indenture and of each Class "A" Mortgage with
respect thereto and the non-necessity of authorization by any public body of the
State of North Dakota with respect to the issuance of the Bonds and the Class
"A" Bonds, and (iv) of Nymann & Kohl, Iowa counsel to the Company, with respect
to franchises, if any, and titles to the properties of the Company, the validity
and enforceability of the lien of the Indenture and of each Class "A" Mortgage
with respect thereto and the non-necessity of authorization by any public body
of the State of Iowa with respect to the issuance of the Bonds and the Class "A"
Bonds.
(e) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Winthrop, Stimson, Putnam & Roberts, counsel
for the Underwriters, covering the matters referred to in subparagraphs (iv),
(v), (ix), (xii) (but only as to the statements referred to in clause (A)
thereof), (xv) and (xvi) (B), (C) and (D) of paragraph (c) above.
As to matters of South Dakota, Nebraska, North Dakota and Iowa law,
Winthrop, Stimson, Putnam & Roberts and Schiff Hardin & Waite may rely upon the
opinions of even date herewith of Churchill, Manolis, Freeman, Kludt & Kaufman;
Shamberg, Wolf, McDermott & Depue; Pearce & Durick and Nymann & Kohl,
respectively.
With respect to the subparagraph (xvi) of paragraph (c) above, Schiff
Hardin & Waite, special counsel to the Company, may state that its opinion and
belief are based upon its participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto (excluding
(for purposes of clauses (B) and (D) of such paragraph) certain of the documents
incorporated by reference therein (to be specified in such opinion)) and review
and discussion of the contents thereof (including the documents incorporated by
reference therein), but are without independent check or verification, except as
specified. With respect to clauses (B), (C) and (D) of subparagraph (xvi) of
paragraph (c) above, Winthrop, Stimson, Putnam & Roberts may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
(but not including documents incorporated therein by reference) and review and
discussion of the contents thereof (including documents incorporated therein by
reference) but are without independent check or verification, except as
specified.
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The opinions of Schiff Hardin & Waite, special counsel to the Company,
Churchill, Manolis, Freeman, Kludt & Kaufman, South Dakota counsel to the
Company, Shamberg, Wolf, McDermott & Depue, Nebraska counsel to the Company,
Pearce & Durick, North Dakota counsel to the Company and Nymann & Kohl, Iowa
counsel to the Company, described in paragraphs (c) and (d) above shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
(f) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from Arthur Andersen LLP, the Company's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Prospectus. Such letter shall include,
without limitation, statements to the effect that (i) the unaudited pro forma
condensed consolidated financial statements included or incorporated by
reference in the Prospectus comply as to form with the applicable accounting
requirements of Rule 11-02 of Regulation S-X of the Commission, (ii)
management's assumptions provide a reasonable basis for presenting the
significant effects directly attributable to the Acquisition described in the
notes to the unaudited pro forma condensed consolidated financial statements,
(iii) the related pro forma adjustments give appropriate effect to those
assumptions, and (iv) the pro forma column reflects the proper application of
those adjustments to the historical financial statement amounts contained in
such unaudited pro forma consolidated statements.
(g) The Representative shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Representative, from Arthur Andersen LLP, the Company's independent public
accountants, to the effect that such accountants reaffirm, as of the Closing
Date, and as though made on the Closing Date, the statements made in the letter
furnished by such accountants pursuant to Section 4(f), except that the
specified date referred to therein shall be a date not more than five business
days prior to the Closing Date.
(h) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from KPMG Peat Marwick LLP, Synergy's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information of Synergy
contained or incorporated by reference into the Prospectus.
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(i) On the Closing Date, Standard & Poor's and Moody's Investors
Service, Inc. shall have publicly assigned to the Bonds ratings of ____ and
____, respectively, which ratings shall be in full force and effect on the
Closing Date.
5. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To furnish the Representative, without charge, a signed copy of
the Registration Statement (including exhibits thereto) and to deliver to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and, during the period mentioned in paragraph (c) below, as
many copies of the Prospectus, any documents incorporated by reference therein
and any supplements and amendments thereto or to the Registration Statement as
the Underwriters may reasonably request (delivery of the Prospectus to be made
in New York, New York no later than 10:00 A.M. on the business day immediately
succeeding the date of this Agreement).
(b) To cause the Prospectus to be filed with the Commission pursuant
to and in compliance with Rule 424 under the Act.
(c) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to the Underwriters a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which the Underwriters reasonably object.
(d) If, during such period after the first date of the public
offering of the Bonds as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare, file with the Commission and furnish, at
its own expense, to the Underwriters, and to the dealers (whose names and
addresses the Representative will furnish to the Company) to which Bonds may
have been sold by the Underwriters on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the Prospectus
so that the statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with law.
(e) To endeavor to qualify the Bonds for offer and sale under the
securities or Blue Sky laws of such jurisdictions
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as the Underwriters shall reasonably request and to maintain such qualification
for as long as the Underwriters shall reasonably request.
(f) To make generally available to the Company's security holders and
to the Representative as soon as practicable an earning statement covering a
twelve month period beginning on the first day of the first full fiscal quarter
after the date of the Underwriting Agreement, which earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder. If such fiscal quarter is the last
fiscal quarter of the Company's fiscal year, such earning statement shall be
made available not later than 90 days after the close of the period covered
thereby and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(g) During the period beginning on the date of this Agreement and
continuing to and including the Closing Date, without the prior written consent
of Morgan Stanley & Co. Incorporated, not to (1) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any debt securities of the
Company or warrants to purchase debt securities of the Company substantially
similar to the Bonds or any securities convertible into or exercisable or
exchangeable therefor (other than (i) the Bonds, (ii) commercial paper issued in
the ordinary course of business and (iii) other debt securities evidencing
commercial bank loans) or (2) enter into any swap or similar arrangement that
transfers, in whole or part, the economic risk of ownership of any of the
foregoing, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of Bonds or such other securities, in cash or
otherwise.
(h) Whether or not any sale of Bonds is consummated, to pay all
expenses incident to the performance of its obligations under the Underwriting
Agreement, including: (i) the preparation and filing of the Registration
Statement and the Prospectus and all amendments and supplements thereto, (ii)
the preparation, issuance and delivery of the Bonds, (iii) the fees and
disbursements of the Company's counsel and accountants and of the Trustee and
its counsel, (iv) the qualification of the Bonds under securities or Blue Sky
laws in accordance with the provisions of Section 5(d), including filing fees
and the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of any Blue Sky Memoranda in an
aggregate amount not to exceed $10,000, (v) the printing and delivery to the
Underwriters in quantities as hereinabove stated of copies of the Registration
Statement and all amendments thereto and of the Prospectus and any amendments or
supplements thereto, (vi) any fees charged by rating agencies for the rating of
the Bonds and (vii) the fees and expenses, if
-14-
<PAGE>
any, incurred with respect to any filing with the National Association of
Securities Dealers, Inc.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with investigating or defending any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding
-15-
<PAGE>
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the
Representative, in the case of parties indemnified pursuant to paragraph (a)
above, and by the Company, in the case of parties indemnified pursuant to
paragraph (b) above. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 6 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Bonds or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
Underwriters on
-16-
<PAGE>
the other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand in connection with the offering
of the Bonds shall be deemed to be in the same respective proportions as the net
proceeds from the offering of such Bonds (before deducting expenses) received by
the Company and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus Supplement, bear to the aggregate public offering price of the Bonds.
The relative fault of the Company on the one hand and of the Underwriters on the
other hand 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 relates to information supplied by the Company
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
6 are several in proportion to the respective principal amounts of Bonds they
have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Bonds
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
7. TERMINATION. This Agreement shall be subject to termination, by
notice given by the Representative to the Company, if (a) after the execution
and delivery of the
-17-
<PAGE>
Underwriting Agreement and prior to the Closing Date (i) trading generally shall
have been suspended or materially limited on or by, as the case may be, any of
the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange or thee Chicago Board of Trade, (ii) trading of
any securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Representative, is material and adverse and (b) in
the case of any of the events specified in clauses (a)(i) through (iv), such
event, singly or together with any other such event, makes it, in the judgment
of the Representative, impracticable to market the Bonds on the terms and in the
manner contemplated in the Prospectus. This Agreement may also be terminated at
any time prior to the Closing Date if in the judgment of the Representative the
subject matter of any amendment or supplement to the Registration Statement or
Prospectus prepared and furnished by the Company reflects a material adverse
change in the business, properties or financial condition of the Company which
renders it either inadvisable to proceed with such offering, if any, or
inadvisable to proceed with the delivery of the Bonds to be purchased hereunder.
8. DEFAULTING UNDERWRITERS. If, on the Closing Date, any one or
more of the Underwriters shall fail or refuse to purchase the Bonds that it has
or they have agreed to purchase hereunder on such date, and the aggregate amount
of Bonds which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate amount of the
Bonds to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the amount of Bonds set forth opposite their
respective names in the Underwriting Agreement bears to the aggregate amount of
Bonds set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as the Representative may specify, to purchase the
Bonds which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; PROVIDED that in no event shall the amount of
Bonds that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 8 by an amount in excess of one-ninth of such
amount of Bonds without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Bonds that it has or they have agreed to purchase and the aggregate amount of
Bonds with respect to which such default occurs is more than one-tenth of the
aggregate amount of Bonds to be purchased on such date, and arrangements
satisfactory to the Representative and the Company for the purchase of such
Bonds are not made within 36 hours after such default, the Underwriting
-18-
<PAGE>
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case either the Representative or the
Company shall have the right to postpone the Closing Date but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under the Underwriting Agreement.
If the Underwriting Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of the Underwriting
Agreement, or if for any reason the Company shall be unable to perform its
obligations under the Underwriting Agreement, the Company will reimburse the
Underwriters or such Underwriters as have so terminated the Underwriting
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with the Underwriting Agreement or the offering
of the Bonds.
If the Underwriting Agreement shall be terminated by the Company
because of any failure or refusal on the part of the Underwriters to comply with
the terms or to fulfill any of the conditions of the Underwriting Agreement, or
if for any reason the Underwriters shall be unable to perform their obligations
under the Underwriting Agreement, the Underwriters will reimburse the Company
for all out-of-pocket expenses (including the fees and disbursements of its
counsel) reasonably incurred by the Company in connection with the Underwriting
Agreement or the offering of the Bonds.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
indemnity and contribution agreements and the representations, warranties and
other statements of the Company, its officers and the Underwriters set forth in
the Underwriting Agreement will remain in full force and effect, regardless of
any termination of the Underwriting Agreement, any investigation made by or on
behalf of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 6 and delivery of and payment for the
Bonds.
10. SUCCESSORS. This Agreement will enure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
11. COUNTERPARTS. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an
-19-
<PAGE>
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
12. APPLICABLE LAW. The Underwriting Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
13. HEADINGS. The headings of the sections of the Underwriting
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of the Underwriting Agreement.
14. NOTICES. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telecopied and confirmed
to Morgan Stanley & Co. Incorporated at 1221 Avenue of the Americas, 4th Floor,
New York, New York 10020, Attn: Manager - Debt Syndicate, Telecopy No: (212)
764-7490, or, if sent to the Company, will be mailed, delivered or telecopied
and confirmed to it at 33 Third Street SE, Huron, South Dakota, 57350, Attn: Mr.
Richard R. Hylland, Vice President -- Finance & Corporate Development, Telecopy
No: (605) 353-8286.
15. DEFINITION OF "SUBSIDIARY". The term "subsidiary," as used in
this Agreement, shall be deemed to refer only to (i) those direct or indirect
subsidiaries of the Company which would qualify as "significant subsidiaries"
pursuant to Rule 405 under the Securities Act and (ii) SYN Inc.
16. CERTAIN AGREEMENTS AND REPRESENTATIONS OF NATWEST CAPITAL MARKETS
LIMITED. NatWest Capital Markets Limited agrees and represents that (i) it has
not offered or sold and will not offer or sell prior to the date six months
after their date of issue any Bonds, having an original maturity of one year or
greater, to persons in the United Kingdom, except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (ii) it has complied with and will comply
with all applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Bonds in, from or otherwise involving
the United Kingdom and (iii) it has only issued or passed on and will only issue
or pass on in the United Kingdom any document received by it in connection with
the issue of the Bonds to a person who is of a kind described in Article 11(3)
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1995 or is a person to whom such document may otherwise lawfully be issued
or passed on.
-20-
<PAGE>
Please confirm your agreement by having an authorized officer sign a
copy of the Underwriting Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
NATWEST CAPITAL MARKETS LIMITED
Acting severally on behalf of themselves
and the several Underwriters named
herein
By: MORGAN STANLEY & CO. INCORPORATED
By: _______________________________
Name:
Title:
Accepted, _______________
NORTHWESTERN PUBLIC SERVICE COMPANY
By: _______________________________
Name:
Title:
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<PAGE>
SCHEDULE I
Principal Amount
Name of Underwriter of Bonds
- ------------------- ----------------
Morgan Stanley & Co. Incorporated. . . . . . . . $__________
NatWest Capital Markets Limited. . . . . . . . . $__________
________________
Total $
________________
________________
<PAGE>
SCHEDULE II
Underwriting Agreement dated ________ __, 1995
Registration Statement No. 33-60423
Representative and Address:
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, NY 10020
Securities:
Designation:
Principal Amount:
Supplemental Indenture
dated as of:
Date of Maturity:
Interest Rate:
Purchase Price:
Public Offering Price:
Type of Funds/Method
of Payment: Immediately available funds
Closing Date
and Location: ___________________________, 1995 at the office of
Winthrop, Stimson, Putnam & Roberts,
New York, New York
<PAGE>
FORM
OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NWPS CAPITAL FINANCING I
<PAGE>
NWPS CAPITAL FINANCING I
CROSS-REFERENCE TABLE FOR THE
AMENDED AND RESTATED DECLARATION OF TRUST
SECTION OF SECTION OF
TRUST INDENTURE AMENDED AND RESTATED
ACT OF 1939, AS AMENDED DECLARATION OF TRUST
Section 310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.3(c)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(a)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4, 3.6(j)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4, 2.5
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4, 2.5
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4, 2.5
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9, 3.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.7(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.9(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.9(b)
(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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.8(h)
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(c)
- -------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Amended and Restated Declaration of Trust.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Interpretation and Definitions
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Appointment Event . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Officer. . . . . . . . . . . . . . . . . . . . . . . 2
Book Entry Interest . . . . . . . . . . . . . . . . . . . . . . 2
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Trust Act. . . . . . . . . . . . . . . . . . . . . . . 2
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . 2
Clearing Agency Participant . . . . . . . . . . . . . . . . . . 3
Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Security . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities Guarantee . . . . . . . . . . . . . . . . . . 3
Common Security Certificate . . . . . . . . . . . . . . . . . . 3
Covered Person. . . . . . . . . . . . . . . . . . . . . . . . . 3
Debenture Issuer. . . . . . . . . . . . . . . . . . . . . . . . 3
Debenture Trustee . . . . . . . . . . . . . . . . . . . . . . . 3
Debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . . 3
Definitive Preferred Security Certificates. . . . . . . . . . . 3
Direction . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . 4
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . 4
Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Certificate. . . . . . . . . . . . . . . . . . . . . . . 4
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indemnified Person. . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Investment Company. . . . . . . . . . . . . . . . . . . . . . . 4
Investment Company Act. . . . . . . . . . . . . . . . . . . . . 4
Investment Company Event. . . . . . . . . . . . . . . . . . . . 4
Legal Action. . . . . . . . . . . . . . . . . . . . . . . . . . 5
List of Holders . . . . . . . . . . . . . . . . . . . . . . . . 5
Majority in Liquidation Amount of the Securities. . . . . . . . 5
Ministerial Action. . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Preferred Securities Guarantee. . . . . . . . . . . . . . . . . 5
Preferred Security. . . . . . . . . . . . . . . . . . . . . . . 6
Preferred Security Beneficial Owner . . . . . . . . . . . . . . 6
Preferred Security Certificate. . . . . . . . . . . . . . . . . 6
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
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<PAGE>
Property Trustee. . . . . . . . . . . . . . . . . . . . . . . . 6
Property Trustee Account. . . . . . . . . . . . . . . . . . . . 6
Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Regular Trustee . . . . . . . . . . . . . . . . . . . . . . . . 6
Related Party . . . . . . . . . . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 6
Rule 3a-7 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . 6
66- 2/3% in Liquidation Amount of the Securities. . . . . . . . 6
Special Event . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Regular Trustee . . . . . . . . . . . . . . . . . . . . 7
Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Successor Entity. . . . . . . . . . . . . . . . . . . . . . . . 7
Successor Securities. . . . . . . . . . . . . . . . . . . . . . 7
Tax Event . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
10% in Liquidation Amount of the Securities . . . . . . . . . . 8
Treasury Regulations. . . . . . . . . . . . . . . . . . . . . . 8
Trustee; Trustees . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . 8
Underwriting Agreement. . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application. . . . . . . . . . . . . . . . 8
SECTION 2.2. Lists of Holders of Securities. . . . . . . . . . . . . . . . . 9
SECTION 2.3 Reports by the Property Trustee . . . . . . . . . . . . . . . . 9
SECTION 2.4 Periodic Reports to Property Trustee. . . . . . . . . . . . . . 9
SECTION 2.5. Evidence of Compliance with Conditions Precedent. . . . . . . .10
SECTION 2.6. Events of Default; Waiver . . . . . . . . . . . . . . . . . . .10
SECTION 2.7. Event of Default; Notice. . . . . . . . . . . . . . . . . . . .11
ARTICLE III
Organization
SECTION 3.1. Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 3.2. Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 3.3. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
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<PAGE>
SECTION 3.4. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 3.5. Title to Property of the Trust. . . . . . . . . . . . . . . . .13
SECTION 3.6. Powers and Duties of the Regular Trustees . . . . . . . . . . .13
SECTION 3.7. Prohibition of Actions by the Trust and the
Trustees . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 3.8. Powers and Duties of the Property Trustee . . . . . . . . . . .17
SECTION 3.9. Certain Duties and Responsibilities of the
Property Trustee . . . . . . . . . . . . . . . . . . . . .19
SECTION 3.10. Certain Rights of Property Trustee. . . . . . . . . . . . . . .21
SECTION 3.11. Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.12. Execution of Documents. . . . . . . . . . . . . . . . . . . . .24
SECTION 3.13. Not Responsible for Recitals or Issuance
of Securities. . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.14. Duration of Trust . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
ARTICLE IV
Sponsor
SECTION 4.1. Sponsor's Purchase of Common Securities. . . . . . . . . . . ..26
SECTION 4.2. Responsibilities of the Sponsor . . . . . . . . . . . . . . . .27
SECTION 4.3. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . .27
ARTICLE V
Trustees
SECTION 5.1. Number of Trustees. . . . . . . . . . . . . . . . . . . . . . .28
SECTION 5.2. Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 5.3. Property Trustee; Eligibility . . . . . . . . . . . . . . . . .29
SECTION 5.4. Qualifications of Regular Trustees and
Delaware Trustee Generally . . . . . . . . . . . . . . . .30
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
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<PAGE>
SECTION 5.5. Initial Trustees. . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 5.6. Appointment, Removal and Resignation
of Trustees. . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 5.7. Vacancies Among Trustees. . . . . . . . . . . . . . . . . . . .33
SECTION 5.8. Effect of Vacancies . . . . . . . . . . . . . . . . . . . . . .33
SECTION 5.9 Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 5.10. Delegation of Power . . . . . . . . . . . . . . . . . . . . . .33
ARTICLE VI
Distributions
SECTION 6.1. Distributions . . . . . . . . . . . . . . . . . . . . . . . . .34
ARTICLE VII
Issuance of Securities
SECTION 7.1. General Provisions Regarding Securities . . . . . . . . . . . .34
ARTICLE VIII
Termination of Trust
SECTION 8.1. Termination of Trust. . . . . . . . . . . . . . . . . . . . . .36
ARTICLE IX
Transfer of Securities
SECTION 9.1. Transfer of Securities. . . . . . . . . . . . . . . . . . . . .37
SECTION 9.2. Transfer of Certificates. . . . . . . . . . . . . . . . . . . .37
SECTION 9.3. Deemed Security Holders . . . . . . . . . . . . . . . . . . . .38
SECTION 9.4. Book Entry Interests. . . . . . . . . . . . . . . . . . . . . .38
SECTION 9.5. Notices to Clearing Agency. . . . . . . . . . . . . . . . . . .39
SECTION 9.6. Appointment of Successor Clearing Agency. . . . . . . . . . . .39
SECTION 9.7. Definitive Preferred Security Certificates. . . . . . . . . . .39
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
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<PAGE>
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen
Certificates. . . . . . . . . . . . . . . . . . . . . . . . . .40
ARTICLE X
Limitation of Liability of Holders
of Securities, Trustees and Others
SECTION 10.1. Liability . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 10.2. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 10.3. Fiduciary Duty. . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 10.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 10.5. Outside Business. . . . . . . . . . . . . . . . . . . . . . . .43
ARTICLE XI
Accounting
SECTION 11.1. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 11.2. Certain Accounting Matters. . . . . . . . . . . . . . . . . . .44
SECTION 11.3. Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 11.4. Withholding . . . . . . . . . . . . . . . . . . . . . . . . . .45
ARTICLE XII
Amendments and Meetings
SECTION 12.1. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 12.2. Meetings of the Holders of Securities; Action
by Written Consent . . . . . . . . . . . . . . . . . . . .47
ARTICLE XIII
Representations
of Property Trustee
SECTION 13.1. Representations and Warranties of Property
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . .49
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Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
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<PAGE>
ARTICLE XIV
Miscellaneous
SECTION 14.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 14.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 14.3. Intention of the Parties. . . . . . . . . . . . . . . . . . . .51
SECTION 14.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 14.5 Successors and Assigns. . . . . . . . . . . . . . . . . . . . .51
SECTION 14.6 Partial Enforceability. . . . . . . . . . . . . . . . . . . . .51
SECTION 14.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .51
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
SIGNATURE AND SEALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
EXHIBIT A: Form of Terms of _______% Trust Preferred Capital Securities and
_______% Trust Common Capital Securities
EXHIBIT B: Specimen of Debenture
EXHIBIT C: Underwriting Agreement
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
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<PAGE>
FORM
OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NWPS CAPITAL FINANCING I
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of _______________, 1995, by the undersigned trustees (together
with all other Persons from time to time duly appointed and serving as trustees
in accordance with the provisions of this Declaration, the "Trustees"),
Northwestern Public Service Company, a Delaware corporation, as trust sponsor
(the "Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established a trust (the "Trust") under
the Business Trust Act (as defined herein) pursuant to a Declaration of Trust
dated as of June 19, 1995 (the "Original Declaration"), and a Certificate of
Trust filed with the Secretary of State of the State of Delaware on June 19,
1995, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain Debentures (as defined herein) of the
Debenture Issuer (as defined herein).
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend and
restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue the
Trust as a business trust under the Business Trust Act and that this Declaration
constitute the governing instrument of such business trust, the Trustees declare
that all assets contributed to the Trust will be held in trust for the benefit
of the holders, from time to time, of the securities representing undivided
beneficial interests in the assets of the Trust issued hereunder, subject to the
provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE>
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 promulgated
under the Securities Act or any successor rule thereunder.
"Appointment Event" means an event defined in the terms of the Securities, as
set forth in Exhibit A, which entitles the Holders of a Majority in liquidation
amount of the Preferred Securities to appoint a Special Regular Trustee.
"Authorized Officer" of a Person means any Person that is authorized to bind
such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any other day on
which banking institutions in New York, New York are authorized or required by
applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del.
Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
-2-
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, or
any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be dated as of
__________, 1995 of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully registered
form representing a Common Security substantially in the form of Annex II to
Exhibit A.
"Covered Person" means: (a) any officer, director, shareholder, partner, member,
representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Northwestern Public Service Company, in its capacity as
issuer of the Debentures.
"Debenture Trustee" means The Chase Manhattan Bank (N.A.), as trustee under the
Indenture, until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Debentures" means the series of Debentures entitled "___% Junior Subordinated
Deferrable Interest Debentures due ____" to be issued to the Property Trustee by
the Debenture Issuer under the Indenture, a specimen certificate of which is
attached as Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
-3-
<PAGE>
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, or any successor legislation.
"Event of Default" in respect of the Securities means an Event of Default (as
defined in the Indenture) has occurred and is continuing in respect of the
Debentures.
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, or any
officers, directors, shareholders, members, partners, employees, representatives
or agents of any Trustee, or any employee or agent of the Trust or its
Affiliates.
"Indenture" means the Indenture dated as of __________, 1995, between the
Debenture Issuer and The Chase Manhattan Bank (N.A.), as trustee, and the
indenture supplemental thereto pursuant to which the Debentures are to be
issued.
"Investment Company" means an investment company as defined in the Investment
Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as amended
from time to time, or any successor legislation.
"Investment Company Event" means that the Regular Trustees shall have received
an opinion of nationally recognized independent counsel experienced in practice
under the Investment Company Act, that as a result of the occurrence of a change
in law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), the Trust is or will be
considered an "investment company" which is required to be registered under the
1940 Act, which Change in 1940 Act Law becomes effective on or after the date of
the issuance of the Preferred Securities. In case of any uncertainty regarding
an Investment Company Event, the good faith determination of the Regular
Trustees, based on the advice of counsel, shall be conclusive.
-4-
<PAGE>
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning set forth in Section 2.2.
"Majority in liquidation amount of the Securities" means, except as provided in
the Terms of Securities and by the Trust Indenture Act, a vote by Holder(s) of
Securities voting together as a single class or, as the context may require, a
vote by Holder(s) of Preferred Securities or Holder(s) of Common Securities
voting separately as a class, representing a majority of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Securities of such class.
"Ministerial Action" has the meaning set forth in the terms of the Securities as
set forth in Exhibit A.
"Officers' Certificate" means, with respect to any Person, a certificate signed
by two Authorized Officers of such Person. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Person" means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement to be dated as of
__________, 1995, of the Sponsor in respect of the Preferred Securities.
-5-
<PAGE>
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a Preferred
Security substantially in the form of Annex I to Exhibit A.
"Property Trustee" means the Trustee meeting the eligibility requirements set
forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property 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 in the Corporate Trust Department
of the Property 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.
"Rule 3a-7" means Rule 3a-7 promulgated under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to time,
or any successor legislation.
-6-
<PAGE>
"66-2/3% in liquidation amount of the Securities" means, except as provided in
the Terms of Securities and by the Trust Indenture Act, a vote by Holder(s) of
Securities voting together as a single class or, as the context may require, a
vote by Holder(s) of Preferred Securities or Holder(s) of Common Securities
voting separately as a class, representing 66 2/3% of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Securities of such class.
"Special Event" means an Investment Company Event or a Tax Event.
"Special Regular Trustee" means a Regular Trustee appointed by the Holders of a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.6(a)(ii)(B).
"Sponsor" means Northwestern Public Service Company, a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Successor Entity" has the meaning set forth in Section 3.15.
"Successor Securities" has the meaning set forth in Section 3.15.
"Tax Event" means that the Regular Trustees shall have received an opinion of
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) 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, (b) any amendment to or change in an interpretation or application of
any such laws or regulations by any legislative body, court, governmental agency
or regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or after the
date of the issuance of the Preferred Securities), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position, or
(d) any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated or effective, or which
interpretation or pronouncement is issued or announced, or which action is
taken, in each case on or after the date of the issuance of the Preferred
Securities, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income accrued or received on the Debentures,
-7-
<PAGE>
(ii) interest payable to the Trust on the Debentures is not, or within 90 days
of the date thereof will not be, deductible, in whole or in part, by the
Debenture Issuer for United States federal income tax purposes or (iii) the
Trust is or will be subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"10% in liquidation amount of the Securities" means, except as provided in the
Terms of Preferred Securities and by the Trust Indenture Act, the vote by
Holder(s) of Securities voting together as a single class or, as the context may
require, the vote by Holder(s) of Preferred Securities or Holder(s) of Common
Securities, voting separately as a class, representing 10% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Securities of such class.
"Treasury Regulations" means the income tax regulations, including temporary and
proposed regulations, promulgated under the Code by the United States Treasury,
as such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration as a
trustee, so long as such Person shall continue in office in accordance with the
terms hereof, and all other Persons who may from time to time be duly appointed,
qualified and serving as Trustees in accordance with the provisions hereof, and
references herein to a Trustee or the Trustees shall refer to such Person or
Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from
time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the offering and
sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to
the extent applicable, be governed by such provisions;
(b) the Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act;
-8-
<PAGE>
(c) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall
control; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the
Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor, the Debenture Issuer and the Regular Trustees on
behalf of the Trust shall provide the Property Trustee (i) within 14
days after each record date for payment of Distributions, a list, in
such form as the Property Trustee may reasonably require, of the
names and addresses of the Holders of the Securities ("List of
Holders") as of such record date, provided that none of the Sponsor,
the Debenture Issuer or the Regular Trustees on behalf of the Trust
shall be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders
given to the Property Trustee by the Sponsor, the Debenture Issuer
and the Regular Trustees on behalf of the Trust, and (ii) at any
other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) provided that the Property Trustee may
destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Property Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property Trustee shall provide to
the Holders of the Preferred Securities such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor, the Debenture Issuer and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such documents, reports and
information as
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required by Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor, the Debenture Issuer and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Declaration that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of
the Preferred Securities and its consequences, provided that, if the
Event of Default arises out of an Event of Default under the
Indenture:
(i) which is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) which requires the consent or vote of all of the holders of
the Debentures to be waived under the Indenture, the Event
of Default under the Declaration may only be waived by the
vote of all of the Holders of the Preferred Securities .
Upon such waiver, any such default shall cease to exist, and
any Event of Default with respect to the Preferred
Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or an
Event of Default with respect to the Preferred Securities or
impair any right consequent thereon. Any waiver by the
Holders of the Preferred Securities of an Event of Default
with respect to the Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common
Securities of any such Event of Default with respect to the
Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of
the Common Securities.
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(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to
the Common Securities and its consequences, provided that, if the
Event of Default arises out of an Event of Default under the
Indenture:
(i) which is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration is not waivable; or
(ii) which requires the consent or vote of all of the Debentures
to be waived under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in
this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of all of the
Holders of the Common Securities ; provided that, each
Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with
respect to the Common Securities and its consequences until
all Events of Default with respect to the Preferred
Securities have been cured, waived or otherwise eliminated,
and until such Events of Default have been so cured, waived
or otherwise eliminated, the Property Trustee will be deemed
to be acting 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 in accordance with the terms of the Securities.
Subject to the foregoing provisions of this Section 2.6(b),
upon such waiver, any such default shall cease to exist and
any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of
Default with respect to the Common Securities or impair any
right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the
Preferred Securities constitutes a waiver of the
corresponding Event of Default under this Declaration.
SECTION 2.7 Event of Default; Notice.
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(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Securities,
notices of all defaults with respect to the Securities known
to the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults"
for the purposes of this Section 2.7(a) being hereby defined
to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein;
provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the
Debentures or in the payment of any sinking fund installment
established for the Debentures, the Property Trustee shall
be protected in withholding such notice if and so long as
the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the
Property Trustee in good faith determines that the
withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 6.01(a)(1) and 6.01(a)(2) of
the Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or a Responsible Officer
charged with the administration of the Declaration
shall have obtained written notice of.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "NWPS Capital Financing I", as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Northwestern Public
Service Company, 33 Third Street, S.E., Huron, South Dakota 57350. On ten
Business Days
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written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the proceeds from such sale to acquire the Debentures, and
(b) except as otherwise limited herein, to engage in only those other activities
necessary or incidental thereto. The Trust shall not borrow money, issue debt
or reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would (i)
cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust or (ii) cause each Holder of Securities not to be
treated as owning an undivided beneficial interest in the Debentures at any time
the Securities are outstanding.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Regular Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
Subject to Section 4.2, any Regular Trustee shall have the power, duty and
authority to cause the Trust to engage in the following activities:
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(a) to issue and sell the Preferred Securities and the Common Securities
in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and
no more than one series of Common Securities, and, provided further,
that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a
one-time, simultaneous issuance of both Preferred Securities and
Common Securities;
(b) in connection with the issue and sale of the Preferred Securities,
to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary
in order to qualify or register all or part of the Preferred
Securities in any State in which the Sponsor has determined
to qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor, to
the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing upon
notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange
Act; and
(v) execute and enter into the Underwriting Agreement providing
for the sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures
to be held of record in the name of the Property Trustee for the
benefit of the Holders of the Preferred Securities and the Holders
of Common Securities;
(d) to give the Debenture Issuer, the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event; provided
that the Regular Trustees shall consult with the Debenture Issuer,
the Sponsor and the Property Trustee before taking or refraining from
taking any Ministerial Action in relation to a Special Event;
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(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and
with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and
exchanges, and to issue relevant notices to the Holders of Preferred
Securities and Holders of Common Securities as to such actions and
applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Property Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to carry out any
of the purposes of the Trust;
(l) to act as, or appoint another Person to act as registrar and transfer
agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debenture Issuer of its election (i) to
defer payments of interest on the Debentures by extending the
interest payment period under the Indenture, or (ii) to extend the
scheduled maturity date on the Debentures;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence,
rights, franchises and
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privileges as a statutory business trust under the laws of the State
of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the
Securities or to enable the Trust to effect the purposes for which
the Trust was created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including,
but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment
Company Act;
(ii) causing the Trust not to be characterized for United States
federal income tax purposes as an association taxable as a
corporation or a partnership but for each Holder of
Securities to be treated as owning an undivided beneficial
interest in the Debentures; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on
behalf of the Trust.
The Regular Trustees must exercise the powers set forth in this Section 3.6 in a
manner that is consistent with the purposes and functions of the Trust set out
in Section 3.3, and the Regular Trustees shall not take any action that is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the powers
or the authority of the Property Trustee set forth in Section 3.8.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall not:
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(i) invest any proceeds received by the Trust from holding the
Debentures but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and
of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past default that
is waivable under Section 513 of the Indenture, (C) exercise
any right to rescind or annul any declaration that the
principal of all the Debentures shall be due and payable or
(D) consent to any amendment, modification or termination of
the Indenture or the Debentures, where such consent shall be
required, unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause
more than an insubstantial risk that for United States
federal income tax purposes the Trust will be characterized
as an association taxable as a corporation or a partnership
and that each Holder of Securities will not be treated as
owning an undivided beneficial interest in the Debentures.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit
of the Holders of the Securities. The right, title and interest of
the Property Trustee to the Debentures shall vest automatically in
each Person who may hereafter be appointed as Property Trustee in
accordance with Section 5.6. Such vesting and cessation of title
shall be effective whether or not conveyancing documents with regard
to the Debentures have been executed and delivered;
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(b) the Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Property Trustee does not also act as Delaware Trustee);
(c) the Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name
of and under the exclusive control of the Property Trustee
on behalf of the Holders of the Securities and, upon the
receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds
into the Property Trustee Account and make payments to the
Holders of the Preferred Securities and Holders of the
Common Securities from the Property Trustee Account in
accordance with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee
Account shall be an account that is maintained with a
banking institution the rating on whose long term unsecured
indebtedness is at least equal to the rating assigned to the
Preferred Securities by a "nationally recognized statistical
rating organization", as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon notice of distribution issued by the Regular Trustees
in accordance with the terms of the Preferred Securities and
the Common Securities, engage in such ministerial activities
as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon
the occurrence of certain special events (as may be defined
in the terms of the Securities) arising from a change in law
or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Securities;
(d) the Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to
the terms of the Securities;
(e) the Property Trustee shall take any Legal Action which arises out of
or in connection with an Event of Default or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture
Act;
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(f) the Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6;
(g) the Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as holder of the Debentures subject to the rights
of the Holders pursuant to the terms of such Securities;
(h) the Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all
securities and any such Paying Agent shall comply with Section 317(b)
of the Trust Indenture Act. Any Paying Agent may be removed by the
Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property
Trustee; and
(i) subject to this Section 3.8, the Property Trustee shall have none of
the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section 3.8
in a manner which is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall not take any action
which is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of Default
and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants
shall be read into this Declaration against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Property Trustee shall exercise
such of the rights and powers vested in it by this Declaration, and
use the same degree of care and skill in their
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exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
(b) no provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions
of this Declaration and the Property Trustee shall not
be liable except for the performance of such duties
and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations
shall be read into this Declaration against the
Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the
Property Trustee and conforming to the requirements of
this Declaration; but in the case of any such
certificates or opinions that by any provision hereof
are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under
a duty to examine the same to determine whether or not
they conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Securities at
the time outstanding relating to the time, method and place
of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
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(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or
powers, if it shall have reasonable ground for believing
that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration
or adequate indemnity against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the
Debentures and the Property Trustee Account 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 Declaration, the
Trust Indenture Act and Rule 3a-7;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree
with the Sponsor. Money held by the Property Trustee need
not be segregated from other funds held by it except in
relation to the Property Trustee Account maintained by the
Property Trustee pursuant to Section 3.8(c)(i) and except to
the extent otherwise required by law;
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsors with
their respective duties under this Declaration, nor shall
the Property Trustee be liable for the default or misconduct
of the Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or
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other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting
any action hereunder, the Property Trustee (unless other
evidence is herein specifically prescribed) may, in the
absence of bad faith on its part and, if the Trust is
excluded from the definition of an Investment Company solely
by means of Rule 3a-7, subject to the requirements of Rule
3a-7, request and rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by
the Sponsor or the Regular Trustees;
(iv) 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
tax or securities) (or any rerecording, refiling or
registration thereof);
(v) the Property Trustee may consult with counsel and the advice
or opinion of such counsel and the experts with respect to
legal matters or advice within the scope of such experts'
area of expertise shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with
such advice or opinion such counsel may be counsel to the
Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any
time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Property
Trustee adequate security and indemnity, which would satisfy
a reasonable person in the position of the Property Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Property
Trustee, provided that nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property
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Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Declaration;
(vii) 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, 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;
(viii) 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;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the
Securities and the signature of the Property Trustee or its
agents alone shall be sufficient and effective to perform
any such action; and no third party shall be required to
inquire as to the authority of the Property Trustee to so
act, or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its
agent's taking such action;
(x) whenever in the administration of this Declaration 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
(i) may request instructions from the Holders of the
Securities, which instructions may only be given by the
Holders of the same proportion and liquidation amount of the
Securities as would be entitled to direct the Property
Trustee under the terms of the Securities in respect of such
remedies, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in
acting in accordance with such instructions; and
(xi) except as otherwise expressly provided by this Declaration,
the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions
of this Declaration.
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(b) No provision of this Declaration 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. No permissive power or
authority available to the Property Trustee shall be construed to be
a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section 5.2,
the Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees or the Property Trustee described in this Declaration. Except as set
forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Business
Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, any Regular Trustee is
authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to execute pursuant to Section 3.6.
Notwithstanding anything to the contrary herein, the Sponsor is authorized to
execute on behalf of the Trust any documents referred to in Section 4.2.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make
no representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII hereof,
shall have existence for 55 years from the date of the Prospectus Supplement
relating to the Debentures.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except
as described in Section 3.15(b) and (c);
(b) the Trust may, with the consent of a majority of the Regular Trustees
and without the consent of the Holders of the Securities, the
Delaware Trustee or the Property Trustee consolidate, amalgamate,
merge with or into, or be replaced by a trust organized as such under
the laws of any State; provided, that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Preferred Securities; or
(B) substitutes for the Preferred Securities other
securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and
payments upon liquidation, redemption and maturity;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity which possesses the same powers and duties
as the Property Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities
exchange or other organization on which the Preferred
Securities are then listed;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities or any Successor
Securities to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges
of the Holders of the Preferred Securities or any Successor
Securities in any material respect under the documents
governing the Preferred Securities or the Successor
Securities (other than with respect to any dilution of such
Holders' interests in the new entity);
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(vi) such Successor Entity has a purpose substantially identical
to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the
Preferred Securities or any Successor Securities in
any material respect under the documents governing the
Preferred Securities or the Successor Securities
(other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor
Entity will be required to register as an Investment
Company; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee; and
(c) notwithstanding Section 3.15(b), the Trust shall, except with the
consent of Holders of 100% in liquidation amount of the Securities,
not consolidate, amalgamate, merge with or into, or be replaced by
any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause the Trust or
Successor Entity for United States federal income tax purposes to be
classified as an association taxable as a corporation or a
partnership and each Holder of the Securities not to be treated as
owning an undivided beneficial interest in the Debentures.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On ___________________, 1995 the Sponsor will purchase all the Common Securities
issued by the Trust, in an amount equal to 3% of the capital of the Trust, at
the same time as the Preferred Securities are sold. The purchase price paid for
the Common
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Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the Sponsor
shall have the right and responsibility to engage in the following activities
and may execute on behalf of the Trust the documents referred to in subsections
(a) through (e) of this Section 4.2:
(a) to prepare for filing by the Trust with the Commission a registration
statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities
and to take any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and
filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a registration
statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing for
the sale of the Preferred Securities.
4.3 Expenses
(a) The Sponsor shall be directly responsible for and pay for all debts
and obligations (other than with respect to the Securities) and all
costs and expenses of the Trust, including, without limitation, the
costs and expenses relating to the organization of the Trust, the
issuance of the Preferred Securities, the fees and expenses of any
Special Regular Trustee, the Property Trustee and the Delaware
Trustee, the costs and expenses related to the operation of the
Trust, including, without limitation, the costs and
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expenses of accountants, attorneys, statistical or bookkeeping
services, expenses of printing and engraving, paying agents(s),
registrar(s), transfer agent(s), duplicating, travel, telephone and
costs and expenses incurred in connection with the disposition of
Trust assets.
(b) The Sponsor will pay any and all taxes and all liabilities, costs and
expenses with respect to such taxes of the Trust.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees shall initially be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities:
(i) and except as provided in Sections 5.1(b)(ii) and
5.6(a)(ii)(B) with respect to the Special Regular Trustee,
the number of Trustees may be increased or decreased by vote
of the Holders of a Majority in liquidation amount of the
Common Securities voting as a class at a meeting of the
Holders of the Common Securities; and
(ii) the number of Trustees shall be increased automatically by
one (1) if an Appointment Event has occurred and is
continuing and the Holders of a Majority in liquidation
amount of the Preferred Securities appoint a Special Regular
Trustee in accordance with Section 5.6,
provided that in any case, the number of Trustees shall be at least three (3)
(the majority of which shall be Regular Trustees), and if there are only three
Trustees:
(c) the Trustee that acts as the Property Trustee shall also act
as the Delaware Trustee pursuant to Section 5.2.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall be:
(a) a natural person who is a resident of the State of Delaware; or
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(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the
requirements of applicable law
provided that if the Property Trustee has its principal place of business in the
State of Delaware and otherwise meets the requirements of applicable law, then
the Property Trustee shall also be the Delaware Trustee and Section 3.11 shall
have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as Property
Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes
of this Section 5.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report
of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and to the
extent Rule 3a-7 requires a trustee having certain
qualifications to hold title to the "eligible assets" of the
Trust, the Property Trustee shall possess those
qualifications.
(b) If at any time the Property Trustee shall cease to be eligible to so
act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set out in Section 5.6(c)
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture
Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all
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respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the Property Trustee also
acts as Delaware Trustee) shall be either a natural person who is at least 21
years of age or a legal entity that shall act through one or more Authorized
Officers.
SECTION 5.5 Initial Trustees.
The initial Regular Trustees shall be:
Merle D. Lewis
33 Third Street SE
P.O. Box 1318
Huron, South Dakota 57350-1318
Richard R. Hylland
33 Third Street SE
P.O. Box 1318
Huron, South Dakota 57350-1318
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
who shall also act as Property Trustee.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
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(ii) after the issuance of any Securities;
(A) other than in respect to a Special Regular Trustee by
vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; and
(B) if an Appointment Event has occurred and is
continuing, one (1) additional Regular Trustee (the
"Special Regular Trustee") may be appointed by vote of
the Holders of a Majority in liquidation amount of the
Preferred Securities, voting as a class at a meeting
of the Holders of the Preferred Securities and such
Special Regular Trustee may only be removed (otherwise
than by the operation of Section 5.6(c)), by vote of
the Holders of a Majority in liquidation amount of the
Preferred Securities voting as a class at a meeting of
the Holders of the Preferred Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a successor
Property Trustee has been appointed and has accepted such
appointment by written instrument executed by such successor
Property Trustee and delivered to the Regular Trustees and
the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.6(a) until a
successor Trustee possessing the qualifications to act as
Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and
the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of a Trustee,
provided that a Special Regular Trustee shall only hold office while
an Appointment Event is continuing and shall cease to hold office
immediately after the Appointment Event pursuant to which the Special
Regular Trustee was appointed and all other Appointment Events cease
to be continuing. Any Trustee may resign from office (without need
for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust,
which resignation shall take effect upon such delivery or upon such
later date as is specified therein; provided, however, that:
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(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a successor Property Trustee has been appointed
and has accepted such appointment by instrument
executed by such successor Property Trustee and
delivered to the Trust, the Sponsor and the resigning
Property Trustee; or
(B) if the Trust is not deemed an Investment Company
solely by reason of Rule 3a-7, until the assets of the
Trust have been completely liquidated and the proceeds
thereof distributed to the Holders of the Securities;
and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment
by instrument executed by such Successor Delaware Trustee
and delivered to the Trust, the Sponsor and the resigning
Delaware Trustee; and
(iii) no such resignation of a Special Regular Trustee shall be
effective until the 60th day following delivery of the
instrument of resignation of the Special Regular Trustee to
the Sponsor and the Trust or such later date specified in
such instrument during which period the Holders of the
Preferred Securities shall have the right to appoint a
successor Special Regular Trustee as provided in this
Section 5.6; and
(d) the Holders of the Common Securities shall use their best efforts to
appoint promptly a Successor Delaware Trustee or successor Property
Trustee, as the case may be, if the Delaware Trustee or the Property
Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) if no successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the
Trust of an instrument of resignation, the resigning Property Trustee
or Delaware Trustee, as applicable, may petition any court of
competent jurisdiction for appointment of a successor Property
Trustee or Successor Delaware Trustee. Such court may thereupon,
after causing such notice to be given, if any, as it may deem proper
and prescribe, appoint a successor Property Trustee or Successor
Delaware Trustee, as the case may be.
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SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of Trustees is
not reduced pursuant to Section 5.1, or if the number of Trustees is increased
pursuant to Section 5.1, a vacancy shall occur. A resolution certifying the
existence of such vacancy by a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 Meetings.
Meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any
in-person meetings of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meetings of the Regular Trustees or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before a meeting. Notices
shall contain a brief statement of the time, place and anticipated purposes of
the meeting. The presence (whether in person or by telephone) of a Regular
Trustee at a meeting shall constitute a waiver of notice of such meeting except
where a Regular Trustee attends a meeting for the express purpose of objecting
to the transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration, any
action of the Regular Trustees may be taken at a meeting by vote of a majority
of the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of
21 his or her
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power for the purpose of executing any documents contemplated in
Section 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental
filing; and
(b) the Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of
the Trust or the names of the Regular Trustees or otherwise as the
Regular Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the applicable terms of
the relevant Holder's Securities. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms. If and to the extent that the Debenture Issuer
makes a payment of interest (including Compounded Interest (as defined in the
Indenture)) and Additional Interest (as defined in the Indenture), premium of
and principal on the Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are legally available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
preferred securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit
A and incorporated herein by reference (the "Preferred Securities")
and one class of common securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set
forth in Exhibit A (the "Common Securities"). The Trust shall have no
securities or other interests in the assets of the Trust other than
the Preferred Securities and the Common Securities.
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(b) The Certificates shall be signed on behalf of the Trust by any two
of the Regular Trustees. Such signatures may be the manual or
facsimile signatures of the present or any future Regular Trustee.
Typographical and other minor errors or defects in any such
reproduction of any such signature shall not affect the validity of
any Certificate. In case any Regular Trustee of the Trust who shall
have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the
Person who signed such Certificates had not ceased to be such Regular
Trustee; and any Certificate may be signed on behalf of the Trust by
such Persons who, at the actual date of execution of such Security,
shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such Person was not
such a Regular Trustee. Certificates shall be printed, lithographed
or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to
comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid
and non-assessable, except with respect to the Common Securities as
provided in Section 10.1(b) of this Declaration.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to
the terms of, and shall be bound by, this Declaration, the Preferred
Securities Guarantee and the Indenture.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common Securities,
the Sponsor or the Debenture Issuer;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common
Securities, the Sponsor or the Debenture Issuer, the filing
of a certificate of cancellation with respect to the Trust
or the revocation of the charter of the Holder of the Common
Securities, the Sponsor or the Debenture Issuer and the
expiration of 90 days after the date of revocation without a
reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor, the Debenture
Issuer or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof
shall have been paid to the Holders in accordance with the
terms of the Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the
Debentures endorsed thereon shall have been distributed to
the Holders of Securities in exchange for all of the
Securities; or
(vi) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware;
and
(c) the provisions of Article X shall survive the termination of the
Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities. Any transfer or
purported transfer of any Security not made in accordance with this
Declaration shall be null and void;
(b) subject to this Article IX, Preferred Securities shall be freely
transferable; and
(c) subject to this Article IX, to the fullest extent permitted by law,
the Sponsor and any Related Party may only transfer Common Securities
to the Sponsor or a Related Party of the Sponsor; provided that, any
such transfer is subject to the condition precedent that the
transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would be classified for United States federal
income tax purposes as an association taxable as a
corporation or a partnership and each Holder of Securities
would not be treated as owning an undivided beneficial
interest in the Debentures; and
(ii) the Trust or the transferree would be an Investment Company
or would be controlled by an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and of
transfers of Certificates, which will be effected without charge but only upon
payment (with such indemnity as the Regular Trustees may require) in respect of
any tax or other government charges which may be imposed in relation to it.
Upon surrender for registration of transfer of any Certificate, the Regular
Trustees shall cause one or more new Certificates to be issued in the name of
the designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance
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of a Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration and the documents incorporated by reference herein.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the
Preferred Securities and the sole holder of the Global Certificates
and shall have no obligation to the Preferred Security Beneficial
Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred
Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants and
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receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders is
required under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.7, the Regular Trustees shall give all such notices and
communications specified herein to be given to the Preferred Security Holders to
the Clearing Agency, and shall have no notice obligations to the Preferred
Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such
Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall
cause Definitive Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any
delay in delivery of such instructions and each of them may
conclusively rely on and shall be
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protected in relying on, said instructions of the Clearing Agency.
The Definitive Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof in accordance with Section 7.1(b), and may have
such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which Preferred Securities may be
listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate;
and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless.
then:
In the absence of notice that such Certificate shall have been acquired by a
bona fide purchaser, any two Regular Trustees on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees 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 Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES AND OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee, the Common Securities Guarantee and the Terms
of Securities, the Sponsor shall not be:
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(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders
of the Securities which shall be made solely from assets of
the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise; and
(b) Pursuant to Section 3803(a) of the Business Trust Act, the Holder of
the Common Securities shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities).
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State
of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to
be within the scope of the authority conferred on such Indemnified
Person by this Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by
reason of such Indemnified Person's gross negligence (or, in the case
of the Property Trustee, except as otherwise set forth in Section
3.9) or willful misconduct with respect to such acts or omissions;
and
(b) an Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person
as to matters the Indemnified Person reasonably believes are within
such other Person's professional or expert competence and who has
been selected with reasonable care by or on behalf of the Trust,
including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
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SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to
any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration,
to the extent that they restrict the duties and liabilities of an
Indemnified Person otherwise existing at law or in equity (other than
the duties imposed on the 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:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any Holder of
Securities,
the Indemnified Person shall resolve such conflict of interest, take
such action or provide such terms, considering in each case the
relative interest of each party (including its own interest) to such
conflict, agreement, transaction or situation and the benefits and
burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or
provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or
otherwise; and
(c) whenever in this Declaration an Indemnified Person is permitted or
required to make a decision
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the
Trust or any other Person; or
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(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor shall
indemnify and hold harmless each Indemnified Person from and against
any loss, damage, liability, tax, penalty, expense or claim of any
kind or nature whatsoever incurred by such Indemnified Person by
reason of the creation, operation or termination of the Trust or any
act or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Declaration, except that
no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Indemnified Person by
reason of gross negligence (or, in the case of the Property Trustee,
except as otherwise set forth in Section 3.9) or willful misconduct
with respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Sponsor prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by the
Sponsor of an undertaking by or on behalf of the Indemnified Person
to repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified as authorized in Section
10.4(a).
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Debenture Issuer, the Delaware Trustee and
the Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Debenture Issuer, the Delaware Trustee, or the Property Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor, the Debenture
Issuer, the Delaware Trustee and
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the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any Affiliate of the Sponsor, or may act
as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or such
other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained
on the accrual method of accounting, in accordance with generally
accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal
income tax purposes. The books of account and the records of the
Trust shall be examined by and reported upon as of the end of each
Fiscal Year by a firm of independent certified public accountants
selected by the Regular Trustees;
(b) the Regular Trustees shall cause to be prepared and delivered to each
of the Holders of Securities, within 90 days after the end of each
Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal
Year, and the related statements of income or loss;
(c) the Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities any United States federal income
tax information statement required by the Code, containing such
information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding
any right under the Code to deliver any such statement at a later
date, the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the
Trust; and
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(d) the Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority an annual United States federal
income tax return on such form as is required by United States
federal income tax law, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust
with any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for the sole
benefit of the Trust; provided, however, that all payments of funds in respect
of the Debentures held by the Property Trustee shall be made directly to the
Property Trustee Account and no other funds of the Trust shall be deposited in
the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Regular Trustees; provided, however, that the Property Trustee
shall designate the sole signatories for the Property Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed overwithholding, to the fullest extent permitted by law, Holders
shall be limited to an action against the applicable jurisdiction. If the
amount required to be withheld was not withheld from actual Distributions made,
the Trust may reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may be amended by, and only
by,
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a written instrument approved and executed by the Regular Trustees
(or, if there are more than two Regular Trustees a majority of the
Regular Trustees); provided, however, that:
(i) no amendment shall be made, and any such purported amendment
shall be void and ineffective, to the extent the result
thereof would be to
(A) cause the Trust to be characterized for purposes of
United States federal income taxation as an
association taxable as a corporation or a partnership
and each Holder of Securities not to be treated as
owning an undivided beneficial interest in the
Debentures;
(B) affect the powers, rights, duties, obligations or
immunities of the Property Trustee or the Delaware
Trustee (unless such amendment is consented to in
writing by the Property Trustee or the Delaware
Trustee, as the case may be); or
(C) cause the Trust to be deemed an Investment Company
that is required to be registered under the Investment
Company Act;
(ii) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would materially
adversely affect the rights, privileges or preferences of
any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of
such Securities;
(iii) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(iv) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common
Securities; and
(v) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint
and remove Trustees shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the
Common Securities (except to the extent such amendment
relates to the Special Regular Trustee, in which case such
amendment may only be made in accordance with the terms of
the Preferred Securities).
(b) Notwithstanding Section 12.1(a)(ii), this Declaration may be amended
without the consent of the Holders of the Securities to:
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(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of
this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) conform to any change in Rule 3a-7 or written change in
interpretation or application of Rule 3a-7 by any
legislative body, court, government agency or regulatory
authority which amendment does not have a material adverse
effect on the right, preferences or privileges of the
Holders.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of
such class, if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall
be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders of Securities calling a meeting
shall specify in writing the Certificates held by the Holders of
Securities exercising the right to call a meeting and only those
specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this
paragraph has been met; and
(b) except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of
Holders of Securities:
(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Declaration
or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the
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Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation amount
that would be necessary to authorize or take such action at
a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of
the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that
any written ballot submitted to the Holder for the purpose
of taking any action without a meeting shall be returned to
the Trust within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure
of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person
that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms
of the Securities or the listing rules of any stock exchange
on which the Preferred Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the
time, place or purpose of any meeting at which any matter is
to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to
the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee which acts as initial Property Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware with trust power and authority to
execute and deliver, and to carry out and perform its obligations
under the terms of, the Declaration.
(b) The execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been
duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered
in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Property Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the
Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly signed by
the party giving such notice, and shall be delivered, telecopied or mailed by
registered or certified mail, as follows:
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(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
NWPS CAPITAL FINANCING I
33 Third Street, S.E.
Huron, South Dakota 57350
Attention: __________________
(b) if given to the Property Trustee or the Delaware Trustee, at the
mailing address set forth below (or such other address as the
Property Trustee or the Delaware Trustee may give notice of to the
Holders of the Securities):
WILMINGTON TRUST COMPANY
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
(c) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
NORTHWESTERN PUBLIC SERVICE COMPANY
33 Third Street, S.E.
Huron, South Dakota 57350
Attention: __________________
(d) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in person,
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 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed by
and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to principles
of conflict of laws.
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SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust not be characterized
for United States federal income tax purposes as an association taxable as a
corporation or a partnership but rather, the Trust be characterized as a grantor
trust or otherwise in a manner that each Holder of Securities be treated as
owning an undivided beneficial interest in the Debentures. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of reference
only and do not affect the interpretation of this Declaration or any provision
hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or referred to,
the successors and assigns of such party shall be deemed to be included, and all
covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature page and
this Declaration may be executed by the affixing of the signature of each of the
Trustees to one of such counterpart signature pages. All of such counterpart
signature pages shall be read as though one, and they shall have the same force
and effect as though all of the signers had signed a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as
of the day and year first above written.
NORTHWESTERN PUBLIC SERVICE COMPANY
as Sponsor
By:
-----------------------------------------------
Name:
Title:
--------------------------------------------------
Merle D. Lewis, as Regular Trustee
--------------------------------------------------
Richard R. Hylland, as Regular Trustee
WILMINGTON TRUST COMPANY
as Delaware Trustee and Property Trustee
By:
-----------------------------------------------
Name:
Title:
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EXHIBIT A
TERMS OF SECURITIES
TERMS OF
_____% TRUST PREFERRED CAPITAL SECURITIES
_____% TRUST COMMON CAPITAL SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated
as of __________, 1995 (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
(a) "Preferred Securities." Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust
of $_____ million ($__________) and a liquidation amount with respect
to the assets of the Trust of $25 per Preferred Security, are hereby
designated for the purposes of identification only as "_____% Trust
Preferred Capital Securities" (the "Preferred Securities"). The
Preferred Security Certificates evidencing the Preferred Securities
shall be substantially in the form attached hereto as Annex I, with
such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange on which the Preferred Securities are
listed.
(b) "Common Securities." Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of $_____
million ($___________) and a liquidation amount with respect to the
assets of the Trust of $25 per Common Security, are hereby designated
for the purposes of identification only as "_____% Trust Common
Capital Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially
in the form attached hereto as Annex II, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. DISTRIBUTIONS.
(a) Distributions payable on each Security will be fixed at a rate per
annum of _____% (the "Coupon Rate") of the stated liquidation amount
of $25 per Security, such rate being the rate of interest payable on
the Debentures to
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be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at
the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such periodic cash
distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made
in respect of the Debentures held by the Property Trustee. The
amount of Distributions payable for any period will be computed for
any full quarterly Distribution period on the basis of a 360-day year
of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of
days elapsed in such a 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue from
__________, 1995 and will be payable quarterly in arrears, on March
31, June 30, September 30, and December 31 of each year, commencing
on __________, 1995, except as otherwise described below. The
Debenture Issuer has the right under the Indenture to defer payments
of interest by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive
quarters (each an "Extension Period") and, as a consequence of such
extension, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture
Issuer may further extend such Extension Period; provided that such
Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters. Payments
of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above
requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business
Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Debentures. Subject
to any applicable laws and regulations and the provisions of the
Declaration, each such payment in respect of the Preferred Securities
will be made as described under the heading "Description of the
Preferred Securities -- Book-Entry Only Issuance -- The Depository
Trust Company" in the Prospectus Supplement dated
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__________, 1995, to the Prospectus dated __________, 1995 (together,
the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Debenture Issuer and the
Trust. The relevant record dates for the Common Securities, and, if
the Preferred Securities shall not continue to remain in book-entry
only form, the relevant record dates for the Preferred Securities,
shall conform to the rules of any securities exchange on which the
securities are listed and, if none, shall be selected by the Regular
Trustees, which dates shall be at least one Business Day but less
than 60 Business Days before the relevant payment dates, which
payment dates correspond to the interest payment dates on the
Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the
Debenture Issuer having failed to make a payment under the Debentures
will cease to be payable to the Person in whose name such Securities
are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a
Business Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the
Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors of the Trust an amount
equal to the aggregate of the stated liquidation amount of $25 per Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Securities, with
an interest rate equal to the Coupon Rate of, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, such
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Securities, shall be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
If, upon any such dissolution, winding-up or termination of the Trust, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Securities
shall be paid on a Pro Rata basis.
4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Debentures in whole or in part, whether at
maturity or upon redemption, the proceeds from such repayment or
payment shall be thereupon applied to redeem Securities having an
aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed at a redemption price of $25
per Security plus an amount equal to accrued and unpaid Distributions
thereon at the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more
than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as
described in Paragraph 4(f)(ii) below.
(c) If a Tax Event (as defined below) or an Investment Company Event (as
defined below) (each, a "Special Event"), shall occur and be
continuing, the Regular Trustees shall dissolve the Trust except in
the limited circumstances described below, and, after satisfaction of
liabilities to creditors of the Trust, cause Debentures held by the
Property Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on and having the same
record date for payment as the Securities, to be distributed to the
Holders of the Securities in liquidation of such Holders' interests
in the Trust on a Pro Rata basis, within 90 days following the
occurrence of such Special Event (the "90-Day Period"); provided,
however, that in the case of the occurrence of a Tax Event, such
dissolution and distribution shall be conditioned on the Regular
Trustees' receipt of an opinion of a nationally recognized
independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue
rulings of the Internal Revenue Service, to the effect that the
Holders of the Securities will not recognize any gain or loss for
United States federal income tax purposes as a result of the
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dissolution of the Trust and the distribution of Debentures; and
provided, further, that, if at the time there is available to the
Trust the opportunity to eliminate, within the 90-Day Period, the
Special Event by taking some ministerial action, such as filing a
form or making an election or pursuing some other similar reasonable
measure that has no adverse effect on the Trust, the Debenture
Issuer, the Sponsor or the Holders of the Securities ("Ministerial
Action"), the Trust will pursue such Ministerial Action in lieu of
dissolution and distribution as described therein. Furthermore, if
in the case of the occurrence of a Tax Event, after receipt of a
Dissolution Tax Opinion (as defined below) by the Regular Trustees
(i) the Debenture Issuer has received an opinion (a "Redemption Tax
Opinion") of a nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there
is more than an insubstantial risk that the Debenture Issuer would be
precluded from deducting the interest on the Debentures for United
States federal income tax purposes even if the Debentures were
distributed to the Holders of Securities in liquidation of such
Holders' interests in the Trust as described in this paragraph 4(c),
or (ii) the Regular Trustees shall have been informed by such tax
counsel that a No Recognition Opinion cannot be delivered to the
Trust, the Debenture Issuer shall have the right at any time, upon
not less than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash within 90 days following the
occurrence of such Tax Event, and, following such redemption,
Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed shall be
redeemed by the Trust at the Redemption Price on a Pro Rata basis;
provided, however, that, if at the time there is available to the
Trust the opportunity to eliminate, within such 90-day period, the
Tax Event by taking some Ministerial Action, the Trust or the
Debenture Issuer will pursue such Ministerial Action in lieu of
redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the
effect that on or after the date of the Prospectus Supplement, as a
result of (a) 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, (b) any amendment to or change in an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of
any judicial decision or regulatory determination on or after the
date of the issuance of the Preferred Securities), (c) any
interpretation or pronouncement that provides for a position with
respect to such laws or regulations that differs from the
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theretofore generally accepted position, or (d) any action taken by
any governmental agency or regulatory authority, which amendment or
change is enacted, promulgated or effective, or which interpretation
or pronouncement is issued or announced, or which action is taken, in
each case on or after the date of the issuance of the Preferred
Securities, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to
United States federal income tax with respect to interest accrued or
received on the Debentures, (ii) the Trust is, or will be within 90
days of the date thereof, subject to more than a de minimis amount of
taxes, duties or other governmental charges, or (iii) interest
payable by the Debenture Issuer to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible,
in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act of 1940, as
amended (the "1940 Act"), that as a result of the occurrence of a
change in law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act
Law"), the Trust is or will be considered an "investment company"
which is required to be registered under the 1940 Act, which Change
in 1940 Act Law becomes effective on or after the date of the
issuance of the Preferred Securities. In case of any uncertainty
regarding an Investment Company Event, the good faith determination
of the Regular Trustees, based on the advice of counsel, shall be
conclusive.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) The
Depository Trust Company (the "Depository") or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of
the Preferred Securities, will receive a registered global
certificate or certificates representing the Debentures to be
delivered upon such distribution and (iii) any certificates
representing Securities, except for certificates representing
Preferred Securities held by the Depository or its nominee (or any
successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate
principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal to accrued and unpaid Distributions, on
such Securities until such certificates are presented to the
Debenture Issuer or its agent for transfer or reissue.
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(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or
before the date of redemption.
(e) If the Debentures are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use
its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other exchange as the Preferred Securities were
listed immediately prior to the distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the Trust
by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the
case of a redemption, will be the date fixed for redemption
of the Debentures. For purposes of the calculation of the
date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given
on the day such notice is first mailed by first-class mail,
postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect
in the Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with
respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities
are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Preferred Securities,
it being understood that, in respect of Preferred Securities
registered in the name of and held of record by the
Depository (or any successor Clearing Agency) or any
nominee, the distribution of the proceeds of such redemption
will be made to such Clearing Agency Participant (or Person
on whose behalf such nominee holds such Securities) in
accordance with the procedures applied by such offering or
nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be
issued if the Debentures are redeemed as set out in this
paragraph 4 (which
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notice will be irrevocable), then (A) while the Preferred
Securities are in book-entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City time, on
the redemption date, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the
Debentures, the Property Trustee will deposit irrevocably
with the Depositary (or successor Clearing Agency) funds
sufficient to pay the applicable Redemption Price with
respect to the Preferred Securities and will give the
Depository irrevocable instructions and authority to pay the
Redemption Price to the Holders of the Preferred Securities,
and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the
Debenture Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will pay
the relevant Redemption Price to the Holders of such
Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on
the redemption date. If a Redemption/ Distribution Notice
shall have been given and funds deposited as required, if
applicable, then immediately prior to the close of business
on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the
Securities so called for redemption and all rights of
Holders of such Securities so called for redemption will
cease, except the right of the Holders of such Securities to
receive the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be
registered the transfer of any Securities that have been so
called for redemption. If any date fixed for redemption of
Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as
if made on such date fixed for redemption. If payment of
the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the
Property Trustee or by the Sponsor as guarantor pursuant to
the relevant Preferred Securities Guarantee or Common
Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the
actual date of payment, in which case the actual payment
date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
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(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the
Preferred Securities, the Depositary or its nominee (or any
successor Clearing Agency or its nominee) if the Global
Certificates have been issued or, if Definitive Preferred
Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the
Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws),
provided the acquiror is not the Holder of the Common
Securities or the obligor under the Indenture, the Sponsor
or any of its subsidiaries may at any time and from time to
time purchase outstanding Preferred Securities by tender, in
the open market or by private agreement.
5. VOTING RIGHTS -- PREFERRED SECURITIES.
(a) Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If (i) the Trust fails to pay Distributions in full on the Preferred
Securities for six (6) consecutive quarterly Distribution periods, or
(ii) an Event of Default occurs and is continuing (each of (i) and
(ii) being an "Appointment Event"), then the Holders of the Preferred
Securities, acting as a single class, will be entitled by the vote of
a Majority in liquidation amount of the Preferred Securities to
appoint a Special Regular Trustee in accordance with Section
5.6(a)(ii)(B) of the Declaration. Any Holder of Preferred Securities
(other than the Sponsor, or any Person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Sponsor) will be entitled to nominate any Person to
be appointed as Special Regular Trustee. For purposes of determining
whether the Trust has failed to make Distributions in full for six
(6) consecutive quarterly Distribution periods, Distributions shall
be deemed to remain in arrears, notwithstanding any payments in
respect thereof, until full cumulative Distributions have been or
contemporaneously are paid with respect to all quarterly Distribution
periods terminating on or prior to the date of payment of such
cumulative Distributions. Not later than 30 days after such right to
appoint a Special Regular Trustee arises, the Regular Trustees will
convene a meeting for the purpose of appointing a Special Regular
Trustee. If the Regular Trustees fail to convene such meeting within
such 30-day period, the Holders of 10% in liquidation amount of the
Preferred Securities will be entitled to convene such meeting in
accordance with Section 12.2 of the Declaration. The record date for
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such meeting will be the close of business on the Business Day that
is one Business Day before the day on which notice of the meeting is
sent to the Holders. The provisions of the Declaration relating to
the convening and conduct of the meetings of the Holders will apply
with respect to any such meeting.
A Special Regular Trustee may be removed without cause at any time by
vote of the Holders of a Majority in liquidation amount of the
Preferred Securities at a meeting of the Holders of the Preferred
Securities in accordance with Section 5.6(a)(ii)(B) of the
Declaration. The Holders of 10% in liquidation amount of the
Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.2 of the Declaration. The record date for
such meeting will be the close of business on the Business Day which
is one Business Day before the day on which the notice of meeting is
sent to Holders. Notwithstanding the appointment of a Special
Regular Trustee, the Debenture Issuer shall retain all rights under
the Indenture, including the right to extend the interest payment
period on the Debentures.
Subject to the requirements set forth in this paragraph, the Holders
of a majority in liquidation amount of the Preferred Securities,
voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Property
Trustee, or the exercise of any trust or power conferred upon the
Property Trustee under the Declaration as holder of the Debentures,
including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred on the Property Trustee with
respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 513 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable; provided,
however, that, where a consent under the Indenture would require the
consent of all Holders of Debentures affected thereby, the Property
Trustee may only give such consent at the direction of all holders
of the Preferred Securities . The Property Trustee shall not revoke
any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing
the time, method and place of conducting any remedy available to the
Property Trustee or the Debenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the
directions of the Holders of the
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Preferred Securities under this paragraph unless the Property Trustee
has obtained an opinion of tax counsel to the effect that, as a
result of such action, for the purposes of United States federal
income tax the Trust will not fail to be classified as a grantor
trust. If the Property Trustee fails to enforce its rights under the
Declaration, to the fullest extent permitted by law, any Holder of
Preferred Securities may, after such Holder's written request to the
Property Trustee to enforce such rights, institute a legal proceeding
directly against any Person to enforce the Property Trustee's rights
under the Declaration without first instituting a legal proceeding
against the Property Trustee or any other Person.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of
Preferred Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Preferred Securities. Each such
notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting
on which such Holders are entitled to vote or of such matter upon
which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or
to distribute the Debentures in accordance with the Declaration and
the terms of the Securities.
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 Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
6. VOTING RIGHTS -- COMMON SECURITIES.
(a) Except as provided under paragraphs 6(b), 6(c) and 7, and as
otherwise required by law and the Declaration, the Holders of the
Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace
any
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Trustee or to increase or decrease the number of Trustees, subject to the
exclusive right of the Holders of the Preferred Securities to appoint, remove or
replace a Special Regular Trustee.
(c) Subject to Section 2.6 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated, and subject to the requirements of
the second to last sentence of this paragraph, the Holders of a
Majority in liquidation amount of the Common Securities, voting
separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Property
Trustee, or the exercise of any trust or power conferred upon the
Property Trustee under the Declaration as holder of the Debentures,
including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred on the Property Trustee with
respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 513 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable; provided,
however, that, where a consent under the Indenture would require the
consent of all Holders of Debentures, the Property Trustee may
only give such consent at the direction of all Holders of the
Common Securities. Pursuant to this paragraph 6(c), the Property
Trustee shall not revoke any action previously authorized or approved
by a vote of the Holders of the Common Securities. Other than with
respect to directing the time, method and place of conducting any
remedy available to the Property Trustee or the Debenture Trustee as
set forth above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Property Trustee has
obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be
classified as an association taxable as a corporation or a
partnership and that each Holder of the Securities will be treated as
owning an undivided beneficial interest in the Debentures on account
of such action. If the Property Trustee fails to enforce its rights
under the Declaration, to the fullest extent permitted by law, any
Holder of Common Securities may, after such Holder's written request
to the Property Trustee to enforce such rights, institute a legal
proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a
legal proceeding against the Property Trustee or any other Person.
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Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened
for such purpose, at a meeting of all of the Holders of Securities in
the Trust or pursuant to written consent. The Regular Trustees will
cause a notice of any meeting at which Holders of Common Securities
are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder
of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of proxies
or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the
terms of the Securities.
7. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides
for, or the Regular Trustees otherwise propose to effect, (i) any
action that would materially adversely affect the powers, preferences
or special rights of the Securities, whether by way of amendment to
the Declaration or otherwise, or (ii) the dissolution, winding-up or
termination of the Trust, other than as described in Section 8.1 of
the Declaration, then the Holders of outstanding Securities, voting
together as a class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such
amendment or proposal shall not be effective except with the approval
of the Holders of at least 66 2/3% in liquidation amount of the
Securities affected thereby; provided, however, that, the rights of
Holders of Preferred Securities under Article V of the Declaration to
appoint, remove or replace a Special Regular Trustee shall not be
amended without the consent of each Holder of Preferred Securities;
provided, further however, if any amendment or proposal referred to
in clause (i) above would materially adversely affect only the
Preferred Securities or the Common Securities, then only the affected
class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval
of 66 2/3% in liquidation amount of such class of securities.
(b) In the event the consent of the Property Trustee as the holder of the
Debentures and the Preferred Securities Guarantee is required under
the
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Indenture with respect to any amendment, modification or termination
of the Indenture, the Debentures or the Preferred Securities
Guarantee, the Property Trustee shall request the direction of the
Holders of the Securities with respect to such amendment,
modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority in
liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture
would require the consent of all Holders of the Debentures, the
Property Trustee may only give such consent at the direction of all
Holders of the Debentures ; provided, further, that the Property
Trustee shall not take any action in accordance with the directions
of the Holders of the Securities under this paragraph 7(b) unless the
Property Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust
will not be classified as other than a grantor trust.
8. PRO RATA.
A reference in these terms of the Securities to any payment, distribution or
treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Indenture has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. RANKING.
The Preferred Securities rank pari passu and payment thereon shall be made Pro
Rata with the Common Securities except that, where an Event of Default occurs
and is continuing under the Indenture in respect of the Debentures held by the
Property Trustee, the rights of Holders of the Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights to payment of the Holders of the Preferred
Securities.
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<PAGE>
10. LISTING.
The Regular Trustees shall use their best efforts to cause the Preferred
Securities to be listed for quotation on the New York Stock Exchange Limited.
11. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE.
Each Holder of Preferred Securities and Common Securities, by the acceptance
thereof, agrees to the provisions of the Preferred Securities Guarantee and the
Common Securities Guarantee, respectively, including the subordination
provisions therein and to the provisions of the Indenture.
12. NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive rights to subscribe for
any additional securities.
13. MISCELLANEOUS.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration and the Preferred Securities
Guarantee and the Indenture to a Holder without charge on written request to the
Trust at its principal place of business.
These terms and the rights of the parties herewith shall be governed by and
interpreted in accordance with the laws of the State of Delaware and all rights
and remedies shall be governed by such laws without regard to principles of
conflict of laws.
A-15
<PAGE>
ANNEX I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE, INSERT: This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depository or by a nominee of the Depository to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized representative of
the Depositary (55 Water Street, New York) to the Trust or its agent for
registration of transfer, exchange or payment, and any Preferred Security issued
is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depositary and any payment hereon is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.]
Certificate Number Number of Preferred Securities
------------ ------------
CUSIP NO.
----------
Certificate Evidencing Preferred Securities
of
NWPS CAPITAL FINANCING I
Preferred Securities.
(liquidation amount $25 per Preferred Security)
NWPS CAPITAL FINANCING I, a business trust formed under the laws of the State of
Delaware (the "Trust"), hereby certifies that _______________ (the "Holder") is
the registered owner of ________________ preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the _____% Trust Preferred Capital 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.
A-16
<PAGE>
THE DESIGNATION, RIGHTS, PRIVILEGES, RESTRICTIONS (INCLUDING RESTRICTIONS ON
TRANSFER), PREFERENCES AND OTHER TERMS AND PROVISIONS OF THE PREFERRED
SECURITIES REPRESENTED HEREBY ARE ISSUED AND SHALL IN ALL RESPECTS BE SUBJECT
TO THE PROVISIONS OF THE AMENDED AND RESTATED DECLARATION OF TRUST OF THE TRUST
DATED AS OF ___________, 1995, AS THE SAME MAY BE AMENDED FROM TIME TO TIME
(THE "DECLARATION"), INCLUDING THE DESIGNATION OF THE TERMS OF THE SECURITIES
AS SET FORTH IN EXHIBIT A TO THE DECLARATION. Capitalized terms used herein
but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration,
the Preferred Securities Guarantee and the Indenture to a Holder without charge
upon written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration and is
entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income tax
purposes, the Debentures as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
__________, 199 .
NWPS Capital Financing I
By:
-------------------------------------
as Trustee
By:
-------------------------------------
as Trustee
A-17
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints
-------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
A-18
<PAGE>
ANNEX II
Certificate Number Number of Common Securities
------------ ------------
Certificate Evidencing Common Securities
of
NWPS CAPITAL FINANCING I
Common Securities.
(liquidation amount $25 per Common Security)
NWPS CAPITAL FINANCING I, a business trust formed under the laws of the State of
Delaware (the "Trust"), hereby certifies that ____________ (the "Holder") is the
registered owner of ________ common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the _____%
Trust Common Capital Securities (liquidation amount $25 per Common Security)
(the "Common Securities"). The Common Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
THE DESIGNATION, RIGHTS, PRIVILEGES, RESTRICTIONS (INCLUDING RESTRICTIONS ON
TRANSFER), PREFERENCES AND OTHER TERMS AND PROVISIONS OF THE COMMON SECURITIES
REPRESENTED HEREBY ARE ISSUED AND SHALL IN ALL RESPECTS BE SUBJECT TO THE
PROVISIONS OF THE AMENDED AND RESTATED DECLARATION OF TRUST OF THE TRUST DATED
AS OF ___________, 1995, AS THE SAME MAY BE AMENDED FROM TIME TO TIME (THE
"DECLARATION"), INCLUDING THE DESIGNATION OF THE TERMS OF THE SECURITIES AS SET
FORTH IN EXHIBIT A TO THE DECLARATION. Capitalized terms used herein but not
defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Common Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration,
the Common Securities Guarantee and the Indenture to a Holder without charge
upon written request to the Trust at its principal place of business.
A-19
<PAGE>
Upon receipt of this certificate, the Holder is bound by the Declaration and is
entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal income tax
purposes the Debentures as indebtedness and the Common Securities as evidence of
indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
___________, 199 .
NWPS Capital Financing I
By:
-------------------------------------
as Trustee
By:
-------------------------------------
as Trustee
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints
--------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A-20
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE>
FORM
OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NWPS CAPITAL FINANCING II
<PAGE>
NWPS CAPITAL FINANCING II
CROSS-REFERENCE TABLE FOR THE
AMENDED AND RESTATED DECLARATION OF TRUST
SECTION OF SECTION OF
TRUST INDENTURE AMENDED AND RESTATED
ACT OF 1939, AS AMENDED DECLARATION OF TRUST
Section 310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.3(c)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(a)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4, 3.6(j)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4, 2.5
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4, 2.5
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4, 2.5
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9, 3.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.7(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.9(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.9(b)
(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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.8(h)
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(c)
- -------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Amended and Restated Declaration of Trust.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Interpretation and Definitions
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Appointment Event . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Officer. . . . . . . . . . . . . . . . . . . . . . . 2
Book Entry Interest . . . . . . . . . . . . . . . . . . . . . . 2
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Trust Act. . . . . . . . . . . . . . . . . . . . . . . 2
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . 2
Clearing Agency Participant . . . . . . . . . . . . . . . . . . 3
Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Security . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities Guarantee . . . . . . . . . . . . . . . . . . 3
Common Security Certificate . . . . . . . . . . . . . . . . . . 3
Covered Person. . . . . . . . . . . . . . . . . . . . . . . . . 3
Debenture Issuer. . . . . . . . . . . . . . . . . . . . . . . . 3
Debenture Trustee . . . . . . . . . . . . . . . . . . . . . . . 3
Debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . . 3
Definitive Preferred Security Certificates. . . . . . . . . . . 3
Direction . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . 4
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . 4
Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Certificate. . . . . . . . . . . . . . . . . . . . . . . 4
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indemnified Person. . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Investment Company. . . . . . . . . . . . . . . . . . . . . . . 4
Investment Company Act. . . . . . . . . . . . . . . . . . . . . 4
Investment Company Event. . . . . . . . . . . . . . . . . . . . 4
Legal Action. . . . . . . . . . . . . . . . . . . . . . . . . . 5
List of Holders . . . . . . . . . . . . . . . . . . . . . . . . 5
Majority in Liquidation Amount of the Securities. . . . . . . . 5
Ministerial Action. . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Preferred Securities Guarantee. . . . . . . . . . . . . . . . . 5
Preferred Security. . . . . . . . . . . . . . . . . . . . . . . 6
Preferred Security Beneficial Owner . . . . . . . . . . . . . . 6
Preferred Security Certificate. . . . . . . . . . . . . . . . . 6
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-i-
<PAGE>
Property Trustee. . . . . . . . . . . . . . . . . . . . . . . . 6
Property Trustee Account. . . . . . . . . . . . . . . . . . . . 6
Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Regular Trustee . . . . . . . . . . . . . . . . . . . . . . . . 6
Related Party . . . . . . . . . . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 6
Rule 3a-7 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Securities Act. . . . . . . . . . . . . . . . . . . . . . . . . 6
66- 2/3% in Liquidation Amount of the Securities. . . . . . . . 6
Special Event . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Regular Trustee . . . . . . . . . . . . . . . . . . . . 7
Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Successor Entity. . . . . . . . . . . . . . . . . . . . . . . . 7
Successor Securities. . . . . . . . . . . . . . . . . . . . . . 7
Tax Event . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
10% in Liquidation Amount of the Securities . . . . . . . . . . 8
Treasury Regulations. . . . . . . . . . . . . . . . . . . . . . 8
Trustee; Trustees . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . 8
Underwriting Agreement. . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application. . . . . . . . . . . . . . . . 8
SECTION 2.2. Lists of Holders of Securities. . . . . . . . . . . . . . . . . 9
SECTION 2.3 Reports by the Property Trustee . . . . . . . . . . . . . . . . 9
SECTION 2.4 Periodic Reports to Property Trustee. . . . . . . . . . . . . . 9
SECTION 2.5. Evidence of Compliance with Conditions Precedent. . . . . . . .10
SECTION 2.6. Events of Default; Waiver . . . . . . . . . . . . . . . . . . .10
SECTION 2.7. Event of Default; Notice. . . . . . . . . . . . . . . . . . . .11
ARTICLE III
Organization
SECTION 3.1. Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 3.2. Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 3.3. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-ii-
<PAGE>
SECTION 3.4. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 3.5. Title to Property of the Trust. . . . . . . . . . . . . . . . .13
SECTION 3.6. Powers and Duties of the Regular Trustees . . . . . . . . . . .13
SECTION 3.7. Prohibition of Actions by the Trust and the
Trustees . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 3.8. Powers and Duties of the Property Trustee . . . . . . . . . . .17
SECTION 3.9. Certain Duties and Responsibilities of the
Property Trustee . . . . . . . . . . . . . . . . . . . . .19
SECTION 3.10. Certain Rights of Property Trustee. . . . . . . . . . . . . . .21
SECTION 3.11. Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.12. Execution of Documents. . . . . . . . . . . . . . . . . . . . .24
SECTION 3.13. Not Responsible for Recitals or Issuance
of Securities. . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.14. Duration of Trust . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
ARTICLE IV
Sponsor
SECTION 4.1. Sponsor's Purchase of Common Securities . . . . . . . . . . . .26
SECTION 4.2. Responsibilities of the Sponsor . . . . . . . . . . . . . . . .27
SECTION 4.3. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . .27
ARTICLE V
Trustees
SECTION 5.1. Number of Trustees. . . . . . . . . . . . . . . . . . . . . . .28
SECTION 5.2. Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 5.3. Property Trustee; Eligibility . . . . . . . . . . . . . . . . .29
SECTION 5.4. Qualifications of Regular Trustees and
Delaware Trustee Generally . . . . . . . . . . . . . . . .30
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-iii-
<PAGE>
SECTION 5.5. Initial Trustees. . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 5.6. Appointment, Removal and Resignation
of Trustees. . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 5.7. Vacancies Among Trustees. . . . . . . . . . . . . . . . . . . .33
SECTION 5.8. Effect of Vacancies . . . . . . . . . . . . . . . . . . . . . .33
SECTION 5.9 Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 5.10. Delegation of Power . . . . . . . . . . . . . . . . . . . . . .33
ARTICLE VI
Distributions
SECTION 6.1. Distributions . . . . . . . . . . . . . . . . . . . . . . . . .34
ARTICLE VII
Issuance of Securities
SECTION 7.1. General Provisions Regarding Securities . . . . . . . . . . . .34
ARTICLE VIII
Termination of Trust
SECTION 8.1. Termination of Trust. . . . . . . . . . . . . . . . . . . . . .36
ARTICLE IX
Transfer of Securities
SECTION 9.1. Transfer of Securities. . . . . . . . . . . . . . . . . . . . .37
SECTION 9.2. Transfer of Certificates. . . . . . . . . . . . . . . . . . . .37
SECTION 9.3. Deemed Security Holders . . . . . . . . . . . . . . . . . . . .38
SECTION 9.4. Book Entry Interests. . . . . . . . . . . . . . . . . . . . . .38
SECTION 9.5. Notices to Clearing Agency. . . . . . . . . . . . . . . . . . .39
SECTION 9.6. Appointment of Successor Clearing Agency. . . . . . . . . . . .39
SECTION 9.7. Definitive Preferred Security Certificates. . . . . . . . . . .39
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-iv-
<PAGE>
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen
Certificates. . . . . . . . . . . . . . . . . . . . . . . . . .40
ARTICLE X
Limitation of Liability of Holders
of Securities, Trustees and Others
SECTION 10.1. Liability . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 10.2. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 10.3. Fiduciary Duty. . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 10.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 10.5. Outside Business. . . . . . . . . . . . . . . . . . . . . . . .43
ARTICLE XI
Accounting
SECTION 11.1. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 11.2. Certain Accounting Matters. . . . . . . . . . . . . . . . . . .44
SECTION 11.3. Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 11.4. Withholding . . . . . . . . . . . . . . . . . . . . . . . . . .45
ARTICLE XII
Amendments and Meetings
SECTION 12.1. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 12.2. Meetings of the Holders of Securities; Action
by Written Consent . . . . . . . . . . . . . . . . . . . .47
ARTICLE XIII
Representations
of Property Trustee
SECTION 13.1. Representations and Warranties of Property
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . .49
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-v-
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ARTICLE XIV
Miscellaneous
SECTION 14.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 14.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 14.3. Intention of the Parties. . . . . . . . . . . . . . . . . . . .51
SECTION 14.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 14.5 Successors and Assigns. . . . . . . . . . . . . . . . . . . . .51
SECTION 14.6 Partial Enforceability. . . . . . . . . . . . . . . . . . . . .51
SECTION 14.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .51
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
SIGNATURE AND SEALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
EXHIBIT A: Form of Terms of _______% Trust Preferred Capital Securities and
_______% Trust Common Capital Securities
EXHIBIT B: Specimen of Debenture
EXHIBIT C: Underwriting Agreement
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Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
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<PAGE>
FORM
OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NWPS CAPITAL FINANCING II
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of _______________, 1995, by the undersigned trustees (together
with all other Persons from time to time duly appointed and serving as trustees
in accordance with the provisions of this Declaration, the "Trustees"),
Northwestern Public Service Company, a Delaware corporation, as trust sponsor
(the "Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established a trust (the "Trust") under
the Business Trust Act (as defined herein) pursuant to a Declaration of Trust
dated as of June 19, 1995 (the "Original Declaration"), and a Certificate of
Trust filed with the Secretary of State of the State of Delaware on June 19,
1995, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain Debentures (as defined herein) of the
Debenture Issuer (as defined herein).
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend and
restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue the
Trust as a business trust under the Business Trust Act and that this Declaration
constitute the governing instrument of such business trust, the Trustees declare
that all assets contributed to the Trust will be held in trust for the benefit
of the holders, from time to time, of the securities representing undivided
beneficial interests in the assets of the Trust issued hereunder, subject to the
provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
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(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 promulgated
under the Securities Act or any successor rule thereunder.
"Appointment Event" means an event defined in the terms of the Securities, as
set forth in Exhibit A, which entitles the Holders of a Majority in liquidation
amount of the Preferred Securities to appoint a Special Regular Trustee.
"Authorized Officer" of a Person means any Person that is authorized to bind
such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any other day on
which banking institutions in New York, New York are authorized or required by
applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del.
Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
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"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, or
any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be dated as of
__________, 1995 of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully registered
form representing a Common Security substantially in the form of Annex II to
Exhibit A.
"Covered Person" means: (a) any officer, director, shareholder, partner, member,
representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Northwestern Public Service Company, in its capacity as
issuer of the Debentures.
"Debenture Trustee" means The Chase Manhattan Bank (N.A.), as trustee under the
Indenture, until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Debentures" means the series of Debentures entitled "___% Junior Subordinated
Deferrable Interest Debentures due ____" to be issued to the Property Trustee by
the Debenture Issuer under the Indenture, a specimen certificate of which is
attached as Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
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"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, or any successor legislation.
"Event of Default" in respect of the Securities means an Event of Default (as
defined in the Indenture) has occurred and is continuing in respect of the
Debentures.
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, or any
officers, directors, shareholders, members, partners, employees, representatives
or agents of any Trustee, or any employee or agent of the Trust or its
Affiliates.
"Indenture" means the Indenture dated as of __________, 1995, between the
Debenture Issuer and The Chase Manhattan Bank (N.A.), as trustee, and the
indenture supplemental thereto pursuant to which the Debentures are to be
issued.
"Investment Company" means an investment company as defined in the Investment
Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as amended
from time to time, or any successor legislation.
"Investment Company Event" means that the Regular Trustees shall have received
an opinion of nationally recognized independent counsel experienced in practice
under the Investment Company Act, that as a result of the occurrence of a change
in law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), the Trust is or will be
considered an "investment company" which is required to be registered under the
1940 Act, which Change in 1940 Act Law becomes effective on or after the date of
the issuance of the Preferred Securities. In case of any uncertainty regarding
an Investment Company Event, the good faith determination of the Regular
Trustees, based on the advice of counsel, shall be conclusive.
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<PAGE>
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning set forth in Section 2.2.
"Majority in liquidation amount of the Securities" means, except as provided in
the Terms of Securities and by the Trust Indenture Act, a vote by Holder(s) of
Securities voting together as a single class or, as the context may require, a
vote by Holder(s) of Preferred Securities or Holder(s) of Common Securities
voting separately as a class, representing a majority of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Securities of such class.
"Ministerial Action" has the meaning set forth in the terms of the Securities as
set forth in Exhibit A.
"Officers' Certificate" means, with respect to any Person, a certificate signed
by two Authorized Officers of such Person. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Person" means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement to be dated as of
__________, 1995, of the Sponsor in respect of the Preferred Securities.
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<PAGE>
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a Preferred
Security substantially in the form of Annex I to Exhibit A.
"Property Trustee" means the Trustee meeting the eligibility requirements set
forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property 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 in the Corporate Trust Department
of the Property 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.
"Rule 3a-7" means Rule 3a-7 promulgated under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to time,
or any successor legislation.
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<PAGE>
"66-2/3% in liquidation amount of the Securities" means, except as provided in
the Terms of Securities and by the Trust Indenture Act, a vote by Holder(s) of
Securities voting together as a single class or, as the context may require, a
vote by Holder(s) of Preferred Securities or Holder(s) of Common Securities
voting separately as a class, representing 66 2/3% of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Securities of such class.
"Special Event" means an Investment Company Event or a Tax Event.
"Special Regular Trustee" means a Regular Trustee appointed by the Holders of a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.6(a)(ii)(B).
"Sponsor" means Northwestern Public Service Company, a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Successor Entity" has the meaning set forth in Section 3.15.
"Successor Securities" has the meaning set forth in Section 3.15.
"Tax Event" means that the Regular Trustees shall have received an opinion of
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) 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, (b) any amendment to or change in an interpretation or application of
any such laws or regulations by any legislative body, court, governmental agency
or regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or after the
date of the issuance of the Preferred Securities), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position, or
(d) any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated or effective, or which
interpretation or pronouncement is issued or announced, or which action is
taken, in each case on or after the date of the issuance of the Preferred
Securities, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income accrued or received on the Debentures,
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<PAGE>
(ii) interest payable to the Trust on the Debentures is not, or within 90 days
of the date thereof will not be, deductible, in whole or in part, by the
Debenture Issuer for United States federal income tax purposes or (iii) the
Trust is or will be subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"10% in liquidation amount of the Securities" means, except as provided in the
Terms of Preferred Securities and by the Trust Indenture Act, the vote by
Holder(s) of Securities voting together as a single class or, as the context may
require, the vote by Holder(s) of Preferred Securities or Holder(s) of Common
Securities, voting separately as a class, representing 10% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Securities of such class.
"Treasury Regulations" means the income tax regulations, including temporary and
proposed regulations, promulgated under the Code by the United States Treasury,
as such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration as a
trustee, so long as such Person shall continue in office in accordance with the
terms hereof, and all other Persons who may from time to time be duly appointed,
qualified and serving as Trustees in accordance with the provisions hereof, and
references herein to a Trustee or the Trustees shall refer to such Person or
Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from
time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the offering and
sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to
the extent applicable, be governed by such provisions;
(b) the Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act;
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<PAGE>
(c) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall
control; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the
Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor, the Debenture Issuer and the Regular Trustees on
behalf of the Trust shall provide the Property Trustee (i) within 14
days after each record date for payment of Distributions, a list, in
such form as the Property Trustee may reasonably require, of the
names and addresses of the Holders of the Securities ("List of
Holders") as of such record date, provided that none of the Sponsor,
the Debenture Issuer or the Regular Trustees on behalf of the Trust
shall be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders
given to the Property Trustee by the Sponsor, the Debenture Issuer
and the Regular Trustees on behalf of the Trust, and (ii) at any
other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) provided that the Property Trustee may
destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Property Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property Trustee shall provide to
the Holders of the Preferred Securities such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor, the Debenture Issuer and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such documents, reports and
information as
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required by Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor, the Debenture Issuer and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Declaration that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of
the Preferred Securities and its consequences, provided that, if the
Event of Default arises out of an Event of Default under the
Indenture:
(i) which is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) which requires the consent or vote of all of the holders of
the Debentures to be waived under the Indenture, the Event
of Default under the Declaration may only be waived by the
vote of all of the Holders of the Preferred Securities .
Upon such waiver, any such default shall cease to exist, and
any Event of Default with respect to the Preferred
Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or an
Event of Default with respect to the Preferred Securities or
impair any right consequent thereon. Any waiver by the
Holders of the Preferred Securities of an Event of Default
with respect to the Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common
Securities of any such Event of Default with respect to the
Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of
the Common Securities.
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(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to
the Common Securities and its consequences, provided that, if the
Event of Default arises out of an Event of Default under the
Indenture:
(i) which is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration is not waivable; or
(ii) which requires the consent or vote of all of the Debentures
to be waived under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in
this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of all of the
Holders of the Common Securities ; provided that, each
Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with
respect to the Common Securities and its consequences until
all Events of Default with respect to the Preferred
Securities have been cured, waived or otherwise eliminated,
and until such Events of Default have been so cured, waived
or otherwise eliminated, the Property Trustee will be deemed
to be acting 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 in accordance with the terms of the Securities.
Subject to the foregoing provisions of this Section 2.6(b),
upon such waiver, any such default shall cease to exist and
any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of
Default with respect to the Common Securities or impair any
right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the
Preferred Securities constitutes a waiver of the
corresponding Event of Default under this Declaration.
SECTION 2.7 Event of Default; Notice.
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(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Securities,
notices of all defaults with respect to the Securities known
to the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults"
for the purposes of this Section 2.7(a) being hereby defined
to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein;
provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the
Debentures or in the payment of any sinking fund installment
established for the Debentures, the Property Trustee shall
be protected in withholding such notice if and so long as
the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the
Property Trustee in good faith determines that the
withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 6.01(a)(1) and 6.01(a)(2) of
the Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or a Responsible Officer
charged with the administration of the Declaration
shall have obtained written notice of.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "NWPS Capital Financing I", as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Northwestern Public
Service Company, 33 Third Street, S.E., Huron, South Dakota 57350. On ten
Business Days
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written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the proceeds from such sale to acquire the Debentures, and
(b) except as otherwise limited herein, to engage in only those other activities
necessary or incidental thereto. The Trust shall not borrow money, issue debt
or reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would (i)
cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust or (ii) cause each Holder of Securities not to be
treated as owning an undivided beneficial interest in the Debentures at any time
the Securities are outstanding.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Regular Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
Subject to Section 4.2, any Regular Trustee shall have the power, duty and
authority to cause the Trust to engage in the following activities:
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(a) to issue and sell the Preferred Securities and the Common Securities
in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and
no more than one series of Common Securities, and, provided further,
that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a
one-time, simultaneous issuance of both Preferred Securities and
Common Securities;
(b) in connection with the issue and sale of the Preferred Securities,
to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary
in order to qualify or register all or part of the Preferred
Securities in any State in which the Sponsor has determined
to qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor, to
the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing upon
notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange
Act; and
(v) execute and enter into the Underwriting Agreement providing
for the sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures
to be held of record in the name of the Property Trustee for the
benefit of the Holders of the Preferred Securities and the Holders
of Common Securities;
(d) to give the Debenture Issuer, the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event; provided
that the Regular Trustees shall consult with the Debenture Issuer,
the Sponsor and the Property Trustee before taking or refraining from
taking any Ministerial Action in relation to a Special Event;
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(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and
with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and
exchanges, and to issue relevant notices to the Holders of Preferred
Securities and Holders of Common Securities as to such actions and
applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Property Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to carry out any
of the purposes of the Trust;
(l) to act as, or appoint another Person to act as registrar and transfer
agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debenture Issuer of its election (i) to
defer payments of interest on the Debentures by extending the
interest payment period under the Indenture, or (ii) to extend the
scheduled maturity date on the Debentures;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence,
rights, franchises and
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privileges as a statutory business trust under the laws of the State
of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the
Securities or to enable the Trust to effect the purposes for which
the Trust was created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including,
but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment
Company Act;
(ii) causing the Trust not to be characterized for United States
federal income tax purposes as an association taxable as a
corporation or a partnership but for each Holder of
Securities to be treated as owning an undivided beneficial
interest in the Debentures; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on
behalf of the Trust.
The Regular Trustees must exercise the powers set forth in this Section 3.6 in a
manner that is consistent with the purposes and functions of the Trust set out
in Section 3.3, and the Regular Trustees shall not take any action that is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the powers
or the authority of the Property Trustee set forth in Section 3.8.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall not:
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(i) invest any proceeds received by the Trust from holding the
Debentures but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and
of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past default that
is waivable under Section 513 of the Indenture, (C) exercise
any right to rescind or annul any declaration that the
principal of all the Debentures shall be due and payable or
(D) consent to any amendment, modification or termination of
the Indenture or the Debentures, where such consent shall be
required, unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause
more than an insubstantial risk that for United States
federal income tax purposes the Trust will be characterized
as an association taxable as a corporation or a partnership
and that each Holder of Securities will not be treated as
owning an undivided beneficial interest in the Debentures.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit
of the Holders of the Securities. The right, title and interest of
the Property Trustee to the Debentures shall vest automatically in
each Person who may hereafter be appointed as Property Trustee in
accordance with Section 5.6. Such vesting and cessation of title
shall be effective whether or not conveyancing documents with regard
to the Debentures have been executed and delivered;
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(b) the Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Property Trustee does not also act as Delaware Trustee);
(c) the Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name
of and under the exclusive control of the Property Trustee
on behalf of the Holders of the Securities and, upon the
receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds
into the Property Trustee Account and make payments to the
Holders of the Preferred Securities and Holders of the
Common Securities from the Property Trustee Account in
accordance with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee
Account shall be an account that is maintained with a
banking institution the rating on whose long term unsecured
indebtedness is at least equal to the rating assigned to the
Preferred Securities by a "nationally recognized statistical
rating organization", as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon notice of distribution issued by the Regular Trustees
in accordance with the terms of the Preferred Securities and
the Common Securities, engage in such ministerial activities
as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon
the occurrence of certain special events (as may be defined
in the terms of the Securities) arising from a change in law
or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Securities;
(d) the Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to
the terms of the Securities;
(e) the Property Trustee shall take any Legal Action which arises out of
or in connection with an Event of Default or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture
Act;
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(f) the Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6;
(g) the Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as holder of the Debentures subject to the rights
of the Holders pursuant to the terms of such Securities;
(h) the Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all
securities and any such Paying Agent shall comply with Section 317(b)
of the Trust Indenture Act. Any Paying Agent may be removed by the
Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property
Trustee; and
(i) subject to this Section 3.8, the Property Trustee shall have none of
the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section 3.8
in a manner which is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall not take any action
which is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of Default
and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants
shall be read into this Declaration against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Property Trustee shall exercise
such of the rights and powers vested in it by this Declaration, and
use the same degree of care and skill in their
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exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
(b) no provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions
of this Declaration and the Property Trustee shall not
be liable except for the performance of such duties
and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations
shall be read into this Declaration against the
Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the
Property Trustee and conforming to the requirements of
this Declaration; but in the case of any such
certificates or opinions that by any provision hereof
are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under
a duty to examine the same to determine whether or not
they conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Securities at
the time outstanding relating to the time, method and place
of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
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(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or
powers, if it shall have reasonable ground for believing
that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration
or adequate indemnity against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the
Debentures and the Property Trustee Account 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 Declaration, the
Trust Indenture Act and Rule 3a-7;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree
with the Sponsor. Money held by the Property Trustee need
not be segregated from other funds held by it except in
relation to the Property Trustee Account maintained by the
Property Trustee pursuant to Section 3.8(c)(i) and except to
the extent otherwise required by law;
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsors with
their respective duties under this Declaration, nor shall
the Property Trustee be liable for the default or misconduct
of the Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or
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other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting
any action hereunder, the Property Trustee (unless other
evidence is herein specifically prescribed) may, in the
absence of bad faith on its part and, if the Trust is
excluded from the definition of an Investment Company solely
by means of Rule 3a-7, subject to the requirements of Rule
3a-7, request and rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by
the Sponsor or the Regular Trustees;
(iv) 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
tax or securities) (or any rerecording, refiling or
registration thereof);
(v) the Property Trustee may consult with counsel and the advice
or opinion of such counsel and the experts with respect to
legal matters or advice within the scope of such experts'
area of expertise shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with
such advice or opinion such counsel may be counsel to the
Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any
time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Property
Trustee adequate security and indemnity, which would satisfy
a reasonable person in the position of the Property Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Property
Trustee, provided that nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property
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Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Declaration;
(vii) 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, 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;
(viii) 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;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the
Securities and the signature of the Property Trustee or its
agents alone shall be sufficient and effective to perform
any such action; and no third party shall be required to
inquire as to the authority of the Property Trustee to so
act, or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its
agent's taking such action;
(x) whenever in the administration of this Declaration 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
(i) may request instructions from the Holders of the
Securities, which instructions may only be given by the
Holders of the same proportion and liquidation amount of the
Securities as would be entitled to direct the Property
Trustee under the terms of the Securities in respect of such
remedies, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in
acting in accordance with such instructions; and
(xi) except as otherwise expressly provided by this Declaration,
the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions
of this Declaration.
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(b) No provision of this Declaration 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. No permissive power or
authority available to the Property Trustee shall be construed to be
a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section 5.2,
the Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees or the Property Trustee described in this Declaration. Except as set
forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Business
Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, any Regular Trustee is
authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to execute pursuant to Section 3.6.
Notwithstanding anything to the contrary herein, the Sponsor is authorized to
execute on behalf of the Trust any documents referred to in Section 4.2.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make
no representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII hereof,
shall have existence for 55 years from the date of the Prospectus Supplement
relating to the Debentures.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except
as described in Section 3.15(b) and (c);
(b) the Trust may, with the consent of a majority of the Regular Trustees
and without the consent of the Holders of the Securities, the
Delaware Trustee or the Property Trustee consolidate, amalgamate,
merge with or into, or be replaced by a trust organized as such under
the laws of any State; provided, that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Preferred Securities; or
(B) substitutes for the Preferred Securities other
securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and
payments upon liquidation, redemption and maturity;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity which possesses the same powers and duties
as the Property Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities
exchange or other organization on which the Preferred
Securities are then listed;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities or any Successor
Securities to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges
of the Holders of the Preferred Securities or any Successor
Securities in any material respect under the documents
governing the Preferred Securities or the Successor
Securities (other than with respect to any dilution of such
Holders' interests in the new entity);
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(vi) such Successor Entity has a purpose substantially identical
to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the
Preferred Securities or any Successor Securities in
any material respect under the documents governing the
Preferred Securities or the Successor Securities
(other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor
Entity will be required to register as an Investment
Company; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee; and
(c) notwithstanding Section 3.15(b), the Trust shall, except with the
consent of Holders of 100% in liquidation amount of the Securities,
not consolidate, amalgamate, merge with or into, or be replaced by
any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause the Trust or
Successor Entity for United States federal income tax purposes to be
classified as an association taxable as a corporation or a
partnership and each Holder of the Securities not to be treated as
owning an undivided beneficial interest in the Debentures.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On ___________________, 1995 the Sponsor will purchase all the Common Securities
issued by the Trust, in an amount equal to 3% of the capital of the Trust, at
the same time as the Preferred Securities are sold. The purchase price paid for
the Common
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Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the Sponsor
shall have the right and responsibility to engage in the following activities
and may execute on behalf of the Trust the documents referred to in subsections
(a) through (e) of this Section 4.2:
(a) to prepare for filing by the Trust with the Commission a registration
statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities
and to take any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and
filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a registration
statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing for
the sale of the Preferred Securities.
4.3 Expenses
(a) The Sponsor shall be directly responsible for and pay for all debts
and obligations (other than with respect to the Securities) and all
costs and expenses of the Trust, including, without limitation, the
costs and expenses relating to the organization of the Trust, the
issuance of the Preferred Securities, the fees and expenses of any
Special Regular Trustee, the Property Trustee and the Delaware
Trustee, the costs and expenses related to the operation of the
Trust, including, without limitation, the costs and
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expenses of accountants, attorneys, statistical or bookkeeping
services, expenses of printing and engraving, paying agents(s),
registrar(s), transfer agent(s), duplicating, travel, telephone and
costs and expenses incurred in connection with the disposition of
Trust assets.
(b) The Sponsor will pay any and all taxes and all liabilities, costs and
expenses with respect to such taxes of the Trust.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees shall initially be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities:
(i) and except as provided in Sections 5.1(b)(ii) and
5.6(a)(ii)(B) with respect to the Special Regular Trustee,
the number of Trustees may be increased or decreased by vote
of the Holders of a Majority in liquidation amount of the
Common Securities voting as a class at a meeting of the
Holders of the Common Securities; and
(ii) the number of Trustees shall be increased automatically by
one (1) if an Appointment Event has occurred and is
continuing and the Holders of a Majority in liquidation
amount of the Preferred Securities appoint a Special Regular
Trustee in accordance with Section 5.6,
provided that in any case, the number of Trustees shall be at least three (3)
(the majority of which shall be Regular Trustees), and if there are only three
Trustees:
(c) the Trustee that acts as the Property Trustee shall also act
as the Delaware Trustee pursuant to Section 5.2.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall be:
(a) a natural person who is a resident of the State of Delaware; or
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(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the
requirements of applicable law
provided that if the Property Trustee has its principal place of business in the
State of Delaware and otherwise meets the requirements of applicable law, then
the Property Trustee shall also be the Delaware Trustee and Section 3.11 shall
have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as Property
Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes
of this Section 5.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report
of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and to the
extent Rule 3a-7 requires a trustee having certain
qualifications to hold title to the "eligible assets" of the
Trust, the Property Trustee shall possess those
qualifications.
(b) If at any time the Property Trustee shall cease to be eligible to so
act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set out in Section 5.6(c)
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture
Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all
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respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the Property Trustee also
acts as Delaware Trustee) shall be either a natural person who is at least 21
years of age or a legal entity that shall act through one or more Authorized
Officers.
SECTION 5.5 Initial Trustees.
The initial Regular Trustees shall be:
Merle D. Lewis
33 Third Street SE
P.O. Box 1318
Huron, South Dakota 57350-1318
Richard R. Hylland
33 Third Street SE
P.O. Box 1318
Huron, South Dakota 57350-1318
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
who shall also act as Property Trustee.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
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(ii) after the issuance of any Securities;
(A) other than in respect to a Special Regular Trustee by
vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; and
(B) if an Appointment Event has occurred and is
continuing, one (1) additional Regular Trustee (the
"Special Regular Trustee") may be appointed by vote of
the Holders of a Majority in liquidation amount of the
Preferred Securities, voting as a class at a meeting
of the Holders of the Preferred Securities and such
Special Regular Trustee may only be removed (otherwise
than by the operation of Section 5.6(c)), by vote of
the Holders of a Majority in liquidation amount of the
Preferred Securities voting as a class at a meeting of
the Holders of the Preferred Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a successor
Property Trustee has been appointed and has accepted such
appointment by written instrument executed by such successor
Property Trustee and delivered to the Regular Trustees and
the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.6(a) until a
successor Trustee possessing the qualifications to act as
Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and
the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of a Trustee,
provided that a Special Regular Trustee shall only hold office while
an Appointment Event is continuing and shall cease to hold office
immediately after the Appointment Event pursuant to which the Special
Regular Trustee was appointed and all other Appointment Events cease
to be continuing. Any Trustee may resign from office (without need
for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust,
which resignation shall take effect upon such delivery or upon such
later date as is specified therein; provided, however, that:
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(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a successor Property Trustee has been appointed
and has accepted such appointment by instrument
executed by such successor Property Trustee and
delivered to the Trust, the Sponsor and the resigning
Property Trustee; or
(B) if the Trust is not deemed an Investment Company
solely by reason of Rule 3a-7, until the assets of the
Trust have been completely liquidated and the proceeds
thereof distributed to the Holders of the Securities;
and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment
by instrument executed by such Successor Delaware Trustee
and delivered to the Trust, the Sponsor and the resigning
Delaware Trustee; and
(iii) no such resignation of a Special Regular Trustee shall be
effective until the 60th day following delivery of the
instrument of resignation of the Special Regular Trustee to
the Sponsor and the Trust or such later date specified in
such instrument during which period the Holders of the
Preferred Securities shall have the right to appoint a
successor Special Regular Trustee as provided in this
Section 5.6; and
(d) the Holders of the Common Securities shall use their best efforts to
appoint promptly a Successor Delaware Trustee or successor Property
Trustee, as the case may be, if the Delaware Trustee or the Property
Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) if no successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the
Trust of an instrument of resignation, the resigning Property Trustee
or Delaware Trustee, as applicable, may petition any court of
competent jurisdiction for appointment of a successor Property
Trustee or Successor Delaware Trustee. Such court may thereupon,
after causing such notice to be given, if any, as it may deem proper
and prescribe, appoint a successor Property Trustee or Successor
Delaware Trustee, as the case may be.
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SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of Trustees is
not reduced pursuant to Section 5.1, or if the number of Trustees is increased
pursuant to Section 5.1, a vacancy shall occur. A resolution certifying the
existence of such vacancy by a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 Meetings.
Meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any
in-person meetings of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meetings of the Regular Trustees or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before a meeting. Notices
shall contain a brief statement of the time, place and anticipated purposes of
the meeting. The presence (whether in person or by telephone) of a Regular
Trustee at a meeting shall constitute a waiver of notice of such meeting except
where a Regular Trustee attends a meeting for the express purpose of objecting
to the transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration, any
action of the Regular Trustees may be taken at a meeting by vote of a majority
of the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of
21 his or her
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power for the purpose of executing any documents contemplated in
Section 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental
filing; and
(b) the Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of
the Trust or the names of the Regular Trustees or otherwise as the
Regular Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the applicable terms of
the relevant Holder's Securities. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms. If and to the extent that the Debenture Issuer
makes a payment of interest (including Compounded Interest (as defined in the
Indenture)) and Additional Interest (as defined in the Indenture), premium of
and principal on the Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are legally available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
preferred securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit
A and incorporated herein by reference (the "Preferred Securities")
and one class of common securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set
forth in Exhibit A (the "Common Securities"). The Trust shall have no
securities or other interests in the assets of the Trust other than
the Preferred Securities and the Common Securities.
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(b) The Certificates shall be signed on behalf of the Trust by any two
of the Regular Trustees. Such signatures may be the manual or
facsimile signatures of the present or any future Regular Trustee.
Typographical and other minor errors or defects in any such
reproduction of any such signature shall not affect the validity of
any Certificate. In case any Regular Trustee of the Trust who shall
have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the
Person who signed such Certificates had not ceased to be such Regular
Trustee; and any Certificate may be signed on behalf of the Trust by
such Persons who, at the actual date of execution of such Security,
shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such Person was not
such a Regular Trustee. Certificates shall be printed, lithographed
or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to
comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid
and non-assessable, except with respect to the Common Securities as
provided in Section 10.1(b) of this Declaration.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to
the terms of, and shall be bound by, this Declaration, the Preferred
Securities Guarantee and the Indenture.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common Securities,
the Sponsor or the Debenture Issuer;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common
Securities, the Sponsor or the Debenture Issuer, the filing
of a certificate of cancellation with respect to the Trust
or the revocation of the charter of the Holder of the Common
Securities, the Sponsor or the Debenture Issuer and the
expiration of 90 days after the date of revocation without a
reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor, the Debenture
Issuer or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof
shall have been paid to the Holders in accordance with the
terms of the Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the
Debentures endorsed thereon shall have been distributed to
the Holders of Securities in exchange for all of the
Securities; or
(vi) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware;
and
(c) the provisions of Article X shall survive the termination of the
Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities. Any transfer or
purported transfer of any Security not made in accordance with this
Declaration shall be null and void;
(b) subject to this Article IX, Preferred Securities shall be freely
transferable; and
(c) subject to this Article IX, to the fullest extent permitted by law,
the Sponsor and any Related Party may only transfer Common Securities
to the Sponsor or a Related Party of the Sponsor; provided that, any
such transfer is subject to the condition precedent that the
transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would be classified for United States federal
income tax purposes as an association taxable as a
corporation or a partnership and each Holder of Securities
would not be treated as owning an undivided beneficial
interest in the Debentures; and
(ii) the Trust or the transferree would be an Investment Company
or would be controlled by an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and of
transfers of Certificates, which will be effected without charge but only upon
payment (with such indemnity as the Regular Trustees may require) in respect of
any tax or other government charges which may be imposed in relation to it.
Upon surrender for registration of transfer of any Certificate, the Regular
Trustees shall cause one or more new Certificates to be issued in the name of
the designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance
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of a Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration and the documents incorporated by reference herein.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the
Preferred Securities and the sole holder of the Global Certificates
and shall have no obligation to the Preferred Security Beneficial
Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred
Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants and
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receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders is
required under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.7, the Regular Trustees shall give all such notices and
communications specified herein to be given to the Preferred Security Holders to
the Clearing Agency, and shall have no notice obligations to the Preferred
Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such
Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall
cause Definitive Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any
delay in delivery of such instructions and each of them may
conclusively rely on and shall be
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protected in relying on, said instructions of the Clearing Agency.
The Definitive Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof in accordance with Section 7.1(b), and may have
such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which Preferred Securities may be
listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate;
and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless.
then:
In the absence of notice that such Certificate shall have been acquired by a
bona fide purchaser, any two Regular Trustees on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees 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 Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES AND OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee, the Common Securities Guarantee and the Terms
of Securities, the Sponsor shall not be:
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(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders
of the Securities which shall be made solely from assets of
the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise; and
(b) Pursuant to Section 3803(a) of the Business Trust Act, the Holder of
the Common Securities shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities).
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State
of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to
be within the scope of the authority conferred on such Indemnified
Person by this Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by
reason of such Indemnified Person's gross negligence (or, in the case
of the Property Trustee, except as otherwise set forth in Section
3.9) or willful misconduct with respect to such acts or omissions;
and
(b) an Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person
as to matters the Indemnified Person reasonably believes are within
such other Person's professional or expert competence and who has
been selected with reasonable care by or on behalf of the Trust,
including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
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SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to
any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration,
to the extent that they restrict the duties and liabilities of an
Indemnified Person otherwise existing at law or in equity (other than
the duties imposed on the 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:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any Holder of
Securities,
the Indemnified Person shall resolve such conflict of interest, take
such action or provide such terms, considering in each case the
relative interest of each party (including its own interest) to such
conflict, agreement, transaction or situation and the benefits and
burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or
provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or
otherwise; and
(c) whenever in this Declaration an Indemnified Person is permitted or
required to make a decision
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the
Trust or any other Person; or
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(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor shall
indemnify and hold harmless each Indemnified Person from and against
any loss, damage, liability, tax, penalty, expense or claim of any
kind or nature whatsoever incurred by such Indemnified Person by
reason of the creation, operation or termination of the Trust or any
act or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Declaration, except that
no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Indemnified Person by
reason of gross negligence (or, in the case of the Property Trustee,
except as otherwise set forth in Section 3.9) or willful misconduct
with respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Sponsor prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by the
Sponsor of an undertaking by or on behalf of the Indemnified Person
to repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified as authorized in Section
10.4(a).
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Debenture Issuer, the Delaware Trustee and
the Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Debenture Issuer, the Delaware Trustee, or the Property Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor, the Debenture
Issuer, the Delaware Trustee and
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the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any Affiliate of the Sponsor, or may act
as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or such
other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained
on the accrual method of accounting, in accordance with generally
accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal
income tax purposes. The books of account and the records of the
Trust shall be examined by and reported upon as of the end of each
Fiscal Year by a firm of independent certified public accountants
selected by the Regular Trustees;
(b) the Regular Trustees shall cause to be prepared and delivered to each
of the Holders of Securities, within 90 days after the end of each
Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal
Year, and the related statements of income or loss;
(c) the Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities any United States federal income
tax information statement required by the Code, containing such
information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding
any right under the Code to deliver any such statement at a later
date, the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the
Trust; and
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(d) the Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority an annual United States federal
income tax return on such form as is required by United States
federal income tax law, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust
with any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for the sole
benefit of the Trust; provided, however, that all payments of funds in respect
of the Debentures held by the Property Trustee shall be made directly to the
Property Trustee Account and no other funds of the Trust shall be deposited in
the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Regular Trustees; provided, however, that the Property Trustee
shall designate the sole signatories for the Property Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed overwithholding, to the fullest extent permitted by law, Holders
shall be limited to an action against the applicable jurisdiction. If the
amount required to be withheld was not withheld from actual Distributions made,
the Trust may reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may be amended by, and only
by,
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a written instrument approved and executed by the Regular Trustees
(or, if there are more than two Regular Trustees a majority of the
Regular Trustees); provided, however, that:
(i) no amendment shall be made, and any such purported amendment
shall be void and ineffective, to the extent the result
thereof would be to
(A) cause the Trust to be characterized for purposes of
United States federal income taxation as an
association taxable as a corporation or a partnership
and each Holder of Securities not to be treated as
owning an undivided beneficial interest in the
Debentures;
(B) affect the powers, rights, duties, obligations or
immunities of the Property Trustee or the Delaware
Trustee (unless such amendment is consented to in
writing by the Property Trustee or the Delaware
Trustee, as the case may be); or
(C) cause the Trust to be deemed an Investment Company
that is required to be registered under the Investment
Company Act;
(ii) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would materially
adversely affect the rights, privileges or preferences of
any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of
such Securities;
(iii) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(iv) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common
Securities; and
(v) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint
and remove Trustees shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the
Common Securities (except to the extent such amendment
relates to the Special Regular Trustee, in which case such
amendment may only be made in accordance with the terms of
the Preferred Securities).
(b) Notwithstanding Section 12.1(a)(ii), this Declaration may be amended
without the consent of the Holders of the Securities to:
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(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of
this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) conform to any change in Rule 3a-7 or written change in
interpretation or application of Rule 3a-7 by any
legislative body, court, government agency or regulatory
authority which amendment does not have a material adverse
effect on the right, preferences or privileges of the
Holders.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of
such class, if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall
be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders of Securities calling a meeting
shall specify in writing the Certificates held by the Holders of
Securities exercising the right to call a meeting and only those
specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this
paragraph has been met; and
(b) except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of
Holders of Securities:
(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Declaration
or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the
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Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation amount
that would be necessary to authorize or take such action at
a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of
the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that
any written ballot submitted to the Holder for the purpose
of taking any action without a meeting shall be returned to
the Trust within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure
of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person
that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms
of the Securities or the listing rules of any stock exchange
on which the Preferred Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the
time, place or purpose of any meeting at which any matter is
to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to
the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee which acts as initial Property Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware with trust power and authority to
execute and deliver, and to carry out and perform its obligations
under the terms of, the Declaration.
(b) The execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been
duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered
in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Property Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the
Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly signed by
the party giving such notice, and shall be delivered, telecopied or mailed by
registered or certified mail, as follows:
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(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
NWPS CAPITAL FINANCING II
33 Third Street, S.E.
Huron, South Dakota 57350
Attention: __________________
(b) if given to the Property Trustee or the Delaware Trustee, at the
mailing address set forth below (or such other address as the
Property Trustee or the Delaware Trustee may give notice of to the
Holders of the Securities):
WILMINGTON TRUST COMPANY
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
(c) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
NORTHWESTERN PUBLIC SERVICE COMPANY
33 Third Street, S.E.
Huron, South Dakota 57350
Attention: __________________
(d) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in person,
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 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed by
and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to principles
of conflict of laws.
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SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust not be characterized
for United States federal income tax purposes as an association taxable as a
corporation or a partnership but rather, the Trust be characterized as a grantor
trust or otherwise in a manner that each Holder of Securities be treated as
owning an undivided beneficial interest in the Debentures. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of reference
only and do not affect the interpretation of this Declaration or any provision
hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or referred to,
the successors and assigns of such party shall be deemed to be included, and all
covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature page and
this Declaration may be executed by the affixing of the signature of each of the
Trustees to one of such counterpart signature pages. All of such counterpart
signature pages shall be read as though one, and they shall have the same force
and effect as though all of the signers had signed a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as
of the day and year first above written.
NORTHWESTERN PUBLIC SERVICE COMPANY
as Sponsor
By:
-----------------------------------------------
Name:
Title:
--------------------------------------------------
Merle D. Lewis, as Regular Trustee
--------------------------------------------------
Richard R. Hylland, as Regular Trustee
WILMINGTON TRUST COMPANY
as Delaware Trustee and Property Trustee
By:
-----------------------------------------------
Name:
Title:
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EXHIBIT A
TERMS OF SECURITIES
TERMS OF
_____% TRUST PREFERRED CAPITAL SECURITIES
_____% TRUST COMMON CAPITAL SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated
as of __________, 1995 (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
(a) "Preferred Securities." Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust
of $_____ million ($__________) and a liquidation amount with respect
to the assets of the Trust of $25 per Preferred Security, are hereby
designated for the purposes of identification only as "_____% Trust
Preferred Capital Securities" (the "Preferred Securities"). The
Preferred Security Certificates evidencing the Preferred Securities
shall be substantially in the form attached hereto as Annex I, with
such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange on which the Preferred Securities are
listed.
(b) "Common Securities." Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of $_____
million ($___________) and a liquidation amount with respect to the
assets of the Trust of $25 per Common Security, are hereby designated
for the purposes of identification only as "_____% Trust Common
Capital Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially
in the form attached hereto as Annex II, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. DISTRIBUTIONS.
(a) Distributions payable on each Security will be fixed at a rate per
annum of _____% (the "Coupon Rate") of the stated liquidation amount
of $25 per Security, such rate being the rate of interest payable on
the Debentures to
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be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at
the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such periodic cash
distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made
in respect of the Debentures held by the Property Trustee. The
amount of Distributions payable for any period will be computed for
any full quarterly Distribution period on the basis of a 360-day year
of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of
days elapsed in such a 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue from
__________, 1995 and will be payable quarterly in arrears, on March
31, June 30, September 30, and December 31 of each year, commencing
on __________, 1995, except as otherwise described below. The
Debenture Issuer has the right under the Indenture to defer payments
of interest by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive
quarters (each an "Extension Period") and, as a consequence of such
extension, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture
Issuer may further extend such Extension Period; provided that such
Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters. Payments
of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above
requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business
Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Debentures. Subject
to any applicable laws and regulations and the provisions of the
Declaration, each such payment in respect of the Preferred Securities
will be made as described under the heading "Description of the
Preferred Securities -- Book-Entry Only Issuance -- The Depository
Trust Company" in the Prospectus Supplement dated
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__________, 1995, to the Prospectus dated __________, 1995 (together,
the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Debenture Issuer and the
Trust. The relevant record dates for the Common Securities, and, if
the Preferred Securities shall not continue to remain in book-entry
only form, the relevant record dates for the Preferred Securities,
shall conform to the rules of any securities exchange on which the
securities are listed and, if none, shall be selected by the Regular
Trustees, which dates shall be at least one Business Day but less
than 60 Business Days before the relevant payment dates, which
payment dates correspond to the interest payment dates on the
Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the
Debenture Issuer having failed to make a payment under the Debentures
will cease to be payable to the Person in whose name such Securities
are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a
Business Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the
Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors of the Trust an amount
equal to the aggregate of the stated liquidation amount of $25 per Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Securities, with
an interest rate equal to the Coupon Rate of, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, such
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Securities, shall be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
If, upon any such dissolution, winding-up or termination of the Trust, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Securities
shall be paid on a Pro Rata basis.
4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Debentures in whole or in part, whether at
maturity or upon redemption, the proceeds from such repayment or
payment shall be thereupon applied to redeem Securities having an
aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed at a redemption price of $25
per Security plus an amount equal to accrued and unpaid Distributions
thereon at the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more
than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as
described in Paragraph 4(f)(ii) below.
(c) If a Tax Event (as defined below) or an Investment Company Event (as
defined below) (each, a "Special Event"), shall occur and be
continuing, the Regular Trustees shall dissolve the Trust except in
the limited circumstances described below, and, after satisfaction of
liabilities to creditors of the Trust, cause Debentures held by the
Property Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on and having the same
record date for payment as the Securities, to be distributed to the
Holders of the Securities in liquidation of such Holders' interests
in the Trust on a Pro Rata basis, within 90 days following the
occurrence of such Special Event (the "90-Day Period"); provided,
however, that in the case of the occurrence of a Tax Event, such
dissolution and distribution shall be conditioned on the Regular
Trustees' receipt of an opinion of a nationally recognized
independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue
rulings of the Internal Revenue Service, to the effect that the
Holders of the Securities will not recognize any gain or loss for
United States federal income tax purposes as a result of the
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dissolution of the Trust and the distribution of Debentures; and
provided, further, that, if at the time there is available to the
Trust the opportunity to eliminate, within the 90-Day Period, the
Special Event by taking some ministerial action, such as filing a
form or making an election or pursuing some other similar reasonable
measure that has no adverse effect on the Trust, the Debenture
Issuer, the Sponsor or the Holders of the Securities ("Ministerial
Action"), the Trust will pursue such Ministerial Action in lieu of
dissolution and distribution as described therein. Furthermore, if
in the case of the occurrence of a Tax Event, after receipt of a
Dissolution Tax Opinion (as defined below) by the Regular Trustees
(i) the Debenture Issuer has received an opinion (a "Redemption Tax
Opinion") of a nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there
is more than an insubstantial risk that the Debenture Issuer would be
precluded from deducting the interest on the Debentures for United
States federal income tax purposes even if the Debentures were
distributed to the Holders of Securities in liquidation of such
Holders' interests in the Trust as described in this paragraph 4(c),
or (ii) the Regular Trustees shall have been informed by such tax
counsel that a No Recognition Opinion cannot be delivered to the
Trust, the Debenture Issuer shall have the right at any time, upon
not less than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash within 90 days following the
occurrence of such Tax Event, and, following such redemption,
Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed shall be
redeemed by the Trust at the Redemption Price on a Pro Rata basis;
provided, however, that, if at the time there is available to the
Trust the opportunity to eliminate, within such 90-day period, the
Tax Event by taking some Ministerial Action, the Trust or the
Debenture Issuer will pursue such Ministerial Action in lieu of
redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the
effect that on or after the date of the Prospectus Supplement, as a
result of (a) 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, (b) any amendment to or change in an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of
any judicial decision or regulatory determination on or after the
date of the issuance of the Preferred Securities), (c) any
interpretation or pronouncement that provides for a position with
respect to such laws or regulations that differs from the
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theretofore generally accepted position, or (d) any action taken by
any governmental agency or regulatory authority, which amendment or
change is enacted, promulgated or effective, or which interpretation
or pronouncement is issued or announced, or which action is taken, in
each case on or after the date of the issuance of the Preferred
Securities, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to
United States federal income tax with respect to interest accrued or
received on the Debentures, (ii) the Trust is, or will be within 90
days of the date thereof, subject to more than a de minimis amount of
taxes, duties or other governmental charges, or (iii) interest
payable by the Debenture Issuer to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible,
in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act of 1940, as
amended (the "1940 Act"), that as a result of the occurrence of a
change in law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act
Law"), the Trust is or will be considered an "investment company"
which is required to be registered under the 1940 Act, which Change
in 1940 Act Law becomes effective on or after the date of the
issuance of the Preferred Securities. In case of any uncertainty
regarding an Investment Company Event, the good faith determination
of the Regular Trustees, based on the advice of counsel, shall be
conclusive.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) The
Depository Trust Company (the "Depository") or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of
the Preferred Securities, will receive a registered global
certificate or certificates representing the Debentures to be
delivered upon such distribution and (iii) any certificates
representing Securities, except for certificates representing
Preferred Securities held by the Depository or its nominee (or any
successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate
principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal to accrued and unpaid Distributions, on
such Securities until such certificates are presented to the
Debenture Issuer or its agent for transfer or reissue.
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(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or
before the date of redemption.
(e) If the Debentures are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use
its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other exchange as the Preferred Securities were
listed immediately prior to the distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the Trust
by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the
case of a redemption, will be the date fixed for redemption
of the Debentures. For purposes of the calculation of the
date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given
on the day such notice is first mailed by first-class mail,
postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect
in the Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with
respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities
are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Preferred Securities,
it being understood that, in respect of Preferred Securities
registered in the name of and held of record by the
Depository (or any successor Clearing Agency) or any
nominee, the distribution of the proceeds of such redemption
will be made to such Clearing Agency Participant (or Person
on whose behalf such nominee holds such Securities) in
accordance with the procedures applied by such offering or
nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be
issued if the Debentures are redeemed as set out in this
paragraph 4 (which
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<PAGE>
notice will be irrevocable), then (A) while the Preferred
Securities are in book-entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City time, on
the redemption date, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the
Debentures, the Property Trustee will deposit irrevocably
with the Depositary (or successor Clearing Agency) funds
sufficient to pay the applicable Redemption Price with
respect to the Preferred Securities and will give the
Depository irrevocable instructions and authority to pay the
Redemption Price to the Holders of the Preferred Securities,
and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the
Debenture Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will pay
the relevant Redemption Price to the Holders of such
Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on
the redemption date. If a Redemption/ Distribution Notice
shall have been given and funds deposited as required, if
applicable, then immediately prior to the close of business
on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the
Securities so called for redemption and all rights of
Holders of such Securities so called for redemption will
cease, except the right of the Holders of such Securities to
receive the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be
registered the transfer of any Securities that have been so
called for redemption. If any date fixed for redemption of
Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as
if made on such date fixed for redemption. If payment of
the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the
Property Trustee or by the Sponsor as guarantor pursuant to
the relevant Preferred Securities Guarantee or Common
Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the
actual date of payment, in which case the actual payment
date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
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<PAGE>
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the
Preferred Securities, the Depositary or its nominee (or any
successor Clearing Agency or its nominee) if the Global
Certificates have been issued or, if Definitive Preferred
Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the
Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws),
provided the acquiror is not the Holder of the Common
Securities or the obligor under the Indenture, the Sponsor
or any of its subsidiaries may at any time and from time to
time purchase outstanding Preferred Securities by tender, in
the open market or by private agreement.
5. VOTING RIGHTS -- PREFERRED SECURITIES.
(a) Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If (i) the Trust fails to pay Distributions in full on the Preferred
Securities for six (6) consecutive quarterly Distribution periods, or
(ii) an Event of Default occurs and is continuing (each of (i) and
(ii) being an "Appointment Event"), then the Holders of the Preferred
Securities, acting as a single class, will be entitled by the vote of
a Majority in liquidation amount of the Preferred Securities to
appoint a Special Regular Trustee in accordance with Section
5.6(a)(ii)(B) of the Declaration. Any Holder of Preferred Securities
(other than the Sponsor, or any Person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Sponsor) will be entitled to nominate any Person to
be appointed as Special Regular Trustee. For purposes of determining
whether the Trust has failed to make Distributions in full for six
(6) consecutive quarterly Distribution periods, Distributions shall
be deemed to remain in arrears, notwithstanding any payments in
respect thereof, until full cumulative Distributions have been or
contemporaneously are paid with respect to all quarterly Distribution
periods terminating on or prior to the date of payment of such
cumulative Distributions. Not later than 30 days after such right to
appoint a Special Regular Trustee arises, the Regular Trustees will
convene a meeting for the purpose of appointing a Special Regular
Trustee. If the Regular Trustees fail to convene such meeting within
such 30-day period, the Holders of 10% in liquidation amount of the
Preferred Securities will be entitled to convene such meeting in
accordance with Section 12.2 of the Declaration. The record date for
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<PAGE>
such meeting will be the close of business on the Business Day that
is one Business Day before the day on which notice of the meeting is
sent to the Holders. The provisions of the Declaration relating to
the convening and conduct of the meetings of the Holders will apply
with respect to any such meeting.
A Special Regular Trustee may be removed without cause at any time by
vote of the Holders of a Majority in liquidation amount of the
Preferred Securities at a meeting of the Holders of the Preferred
Securities in accordance with Section 5.6(a)(ii)(B) of the
Declaration. The Holders of 10% in liquidation amount of the
Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.2 of the Declaration. The record date for
such meeting will be the close of business on the Business Day which
is one Business Day before the day on which the notice of meeting is
sent to Holders. Notwithstanding the appointment of a Special
Regular Trustee, the Debenture Issuer shall retain all rights under
the Indenture, including the right to extend the interest payment
period on the Debentures.
Subject to the requirements set forth in this paragraph, the Holders
of a majority in liquidation amount of the Preferred Securities,
voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Property
Trustee, or the exercise of any trust or power conferred upon the
Property Trustee under the Declaration as holder of the Debentures,
including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred on the Property Trustee with
respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 513 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable; provided,
however, that, where a consent under the Indenture would require the
consent of all Holders of Debentures affected thereby, the Property
Trustee may only give such consent at the direction of all holders
of the Preferred Securities. The Property Trustee shall not revoke
any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing
the time, method and place of conducting any remedy available to the
Property Trustee or the Debenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the
directions of the Holders of the
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<PAGE>
Preferred Securities under this paragraph unless the Property Trustee
has obtained an opinion of tax counsel to the effect that, as a
result of such action, for the purposes of United States federal
income tax the Trust will not fail to be classified as a grantor
trust. If the Property Trustee fails to enforce its rights under the
Declaration, to the fullest extent permitted by law, any Holder of
Preferred Securities may, after such Holder's written request to the
Property Trustee to enforce such rights, institute a legal proceeding
directly against any Person to enforce the Property Trustee's rights
under the Declaration without first instituting a legal proceeding
against the Property Trustee or any other Person.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of
Preferred Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Preferred Securities. Each such
notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting
on which such Holders are entitled to vote or of such matter upon
which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or
to distribute the Debentures in accordance with the Declaration and
the terms of the Securities.
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 Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
6. VOTING RIGHTS -- COMMON SECURITIES.
(a) Except as provided under paragraphs 6(b), 6(c) and 7, and as
otherwise required by law and the Declaration, the Holders of the
Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace
any
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<PAGE>
Trustee or to increase or decrease the number of Trustees, subject to the
exclusive right of the Holders of the Preferred Securities to appoint, remove or
replace a Special Regular Trustee.
(c) Subject to Section 2.6 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated, and subject to the requirements of
the second to last sentence of this paragraph, the Holders of a
Majority in liquidation amount of the Common Securities, voting
separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Property
Trustee, or the exercise of any trust or power conferred upon the
Property Trustee under the Declaration as holder of the Debentures,
including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred on the Property Trustee with
respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 513 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable; provided,
however, that, where a consent under the Indenture would require the
consent of all Holders of Debentures, the Property Trustee may
only give such consent at the direction of all Holders of the
Common Securities. Pursuant to this paragraph 6(c), the Property
Trustee shall not revoke any action previously authorized or approved
by a vote of the Holders of the Common Securities. Other than with
respect to directing the time, method and place of conducting any
remedy available to the Property Trustee or the Debenture Trustee as
set forth above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Property Trustee has
obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be
classified as an association taxable as a corporation or a
partnership and that each Holder of the Securities will be treated as
owning an undivided beneficial interest in the Debentures on account
of such action. If the Property Trustee fails to enforce its rights
under the Declaration, to the fullest extent permitted by law, any
Holder of Common Securities may, after such Holder's written request
to the Property Trustee to enforce such rights, institute a legal
proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a
legal proceeding against the Property Trustee or any other Person.
A-12
<PAGE>
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened
for such purpose, at a meeting of all of the Holders of Securities in
the Trust or pursuant to written consent. The Regular Trustees will
cause a notice of any meeting at which Holders of Common Securities
are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder
of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of proxies
or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the
terms of the Securities.
7. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides
for, or the Regular Trustees otherwise propose to effect, (i) any
action that would materially adversely affect the powers, preferences
or special rights of the Securities, whether by way of amendment to
the Declaration or otherwise, or (ii) the dissolution, winding-up or
termination of the Trust, other than as described in Section 8.1 of
the Declaration, then the Holders of outstanding Securities, voting
together as a class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such
amendment or proposal shall not be effective except with the approval
of the Holders of at least 66 2/3% in liquidation amount of the
Securities affected thereby; provided, however, that, the rights of
Holders of Preferred Securities under Article V of the Declaration to
appoint, remove or replace a Special Regular Trustee shall not be
amended without the consent of each Holder of Preferred Securities;
provided, further however, if any amendment or proposal referred to
in clause (i) above would materially adversely affect only the
Preferred Securities or the Common Securities, then only the affected
class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval
of 66 2/3% in liquidation amount of such class of securities.
(b) In the event the consent of the Property Trustee as the holder of the
Debentures and the Preferred Securities Guarantee is required under
the
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<PAGE>
Indenture with respect to any amendment, modification or termination
of the Indenture, the Debentures or the Preferred Securities
Guarantee, the Property Trustee shall request the direction of the
Holders of the Securities with respect to such amendment,
modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority in
liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture
would require the consent of all Holders of the Debentures, the
Property Trustee may only give such consent at the direction of all
Holders of the Debentures ; provided, further, that the Property
Trustee shall not take any action in accordance with the directions
of the Holders of the Securities under this paragraph 7(b) unless the
Property Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust
will not be classified as other than a grantor trust.
8. PRO RATA.
A reference in these terms of the Securities to any payment, distribution or
treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Indenture has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. RANKING.
The Preferred Securities rank pari passu and payment thereon shall be made Pro
Rata with the Common Securities except that, where an Event of Default occurs
and is continuing under the Indenture in respect of the Debentures held by the
Property Trustee, the rights of Holders of the Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights to payment of the Holders of the Preferred
Securities.
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<PAGE>
10. LISTING.
The Regular Trustees shall use their best efforts to cause the Preferred
Securities to be listed for quotation on the New York Stock Exchange Limited.
11. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE.
Each Holder of Preferred Securities and Common Securities, by the acceptance
thereof, agrees to the provisions of the Preferred Securities Guarantee and the
Common Securities Guarantee, respectively, including the subordination
provisions therein and to the provisions of the Indenture.
12. NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive rights to subscribe for
any additional securities.
13. MISCELLANEOUS.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration and the Preferred Securities
Guarantee and the Indenture to a Holder without charge on written request to the
Trust at its principal place of business.
These terms and the rights of the parties herewith shall be governed by and
interpreted in accordance with the laws of the State of Delaware and all rights
and remedies shall be governed by such laws without regard to principles of
conflict of laws.
A-15
<PAGE>
ANNEX I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE, INSERT: This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depository or by a nominee of the Depository to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized representative of
the Depositary (55 Water Street, New York) to the Trust or its agent for
registration of transfer, exchange or payment, and any Preferred Security issued
is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depositary and any payment hereon is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.]
Certificate Number Number of Preferred Securities
------------ ------------
CUSIP NO.
----------
Certificate Evidencing Preferred Securities
of
NWPS CAPITAL FINANCING II
Preferred Securities.
(liquidation amount $25 per Preferred Security)
NWPS CAPITAL FINANCING II, a business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that _______________ (the
"Holder") is the registered owner of ________________ preferred securities of
the Trust representing undivided beneficial interests in the assets of the
Trust designated the _____% Trust Preferred Capital 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.
A-16
<PAGE>
THE DESIGNATION, RIGHTS,PRIVILEGES, RESTRICTIONS (INCLUDING RESTRICTIONS ON
TRANSFER), PREFERENCES AND OTHER TERMS AND PROVISIONS OF THE PREFERRED
SECURITIES REPRESENTED HEREBY ARE ISSUED AND SHALL IN ALL RESPECTS BE SUBJECT
TO THE PROVISIONS OF THE AMENDED AND RESTATED DECLARATION OF TRUST OF THE TRUST
DATED AS OF ___________, 1995, AS THE SAME MAY BE AMENDED FROM TIME TO TIME
(THE "DECLARATION"), INCLUDING THE DESIGNATION OF THE TERMS OF THE SECURITIES
AS SET FORTH IN EXHIBIT A TO THE DECLARATION. Capitalized terms used herein
but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to
the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Preferred Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the Declaration and is
entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income tax
purposes, the Debentures as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
__________, 199 .
NWPS Capital Financing I
By:
-------------------------------------
as Trustee
By:
-------------------------------------
as Trustee
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints
-------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
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<PAGE>
ANNEX II
Certificate Number Number of Common Securities
------------ ------------
Certificate Evidencing Common Securities
of
NWPS CAPITAL FINANCING II
Common Securities.
(liquidation amount $25 per Common Security)
NWPS CAPITAL FINANCING II, a business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that ____________ (the
"Holder") is the registered owner of ________ common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the _____% Trust Common Capital Securities (liquidation amount $25
per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. THE DESIGNATION, RIGHTS, PRIVILEGES, RESTRICTIONS
(INCLUDING RESTRICTIONS ON TRANSFER), PREFERENCES AND OTHER TERMS AND
PROVISIONS OF THE COMMON SECURITIES REPRESENTED HEREBY ARE ISSUED AND SHALL
IN ALL RESPECTS BE SUBJECT TO THE PROVISIONS OF THE AMENDED AND RESTATED
DECLARATION OF TRUST OF THE TRUST DATED AS OF ___________, 1995, AS THE SAME
MAY BE AMENDED FROM TIME TO TIME (THE "DECLARATION"), INCLUDING THE
DESIGNATION OF THE TERMS OF THE SECURITIES AS SET FORTH IN EXHIBIT A TO THE
DECLARATION. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration.
The Holder is entitled to the benefits of the Common Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration,
the Common Securities Guarantee and the Indenture to a Holder without charge
upon written request to the Trust at its principal place of business.
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<PAGE>
Upon receipt of this certificate, the Holder is bound by the Declaration and is
entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal income tax
purposes the Debentures as indebtedness and the Common Securities as evidence of
indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
___________, 199 .
NWPS Capital Financing I
By:
-------------------------------------
as Trustee
By:
-------------------------------------
as Trustee
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints
--------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
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<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE>
FORM
OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NWPS CAPITAL FINANCING III
<PAGE>
NWPS CAPITAL FINANCING III
CROSS-REFERENCE TABLE FOR THE
AMENDED AND RESTATED DECLARATION OF TRUST
SECTION OF SECTION OF
TRUST INDENTURE AMENDED AND RESTATED
ACT OF 1939, AS AMENDED DECLARATION OF TRUST
Section 310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.3(c)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2(a)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4, 3.6(j)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4, 2.5
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4, 2.5
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4, 2.5
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9, 3.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.7(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.9(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.9(b)
(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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.8(h)
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(c)
- -------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Amended and Restated Declaration of Trust.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Interpretation and Definitions
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Appointment Event . . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Officer. . . . . . . . . . . . . . . . . . . . . . . 2
Book Entry Interest . . . . . . . . . . . . . . . . . . . . . . 2
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Trust Act. . . . . . . . . . . . . . . . . . . . . . . 2
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . 2
Clearing Agency Participant . . . . . . . . . . . . . . . . . . 3
Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Security . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities Guarantee . . . . . . . . . . . . . . . . . . 3
Common Security Certificate . . . . . . . . . . . . . . . . . . 3
Covered Person. . . . . . . . . . . . . . . . . . . . . . . . . 3
Debenture Issuer. . . . . . . . . . . . . . . . . . . . . . . . 3
Debenture Trustee . . . . . . . . . . . . . . . . . . . . . . . 3
Debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . . 3
Definitive Preferred Security Certificates. . . . . . . . . . . 3
Direction . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . 4
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . 4
Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Certificate. . . . . . . . . . . . . . . . . . . . . . . 4
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indemnified Person. . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Investment Company. . . . . . . . . . . . . . . . . . . . . . . 4
Investment Company Act. . . . . . . . . . . . . . . . . . . . . 4
Investment Company Event. . . . . . . . . . . . . . . . . . . . 4
Legal Action. . . . . . . . . . . . . . . . . . . . . . . . . . 5
List of Holders . . . . . . . . . . . . . . . . . . . . . . . . 5
Majority in Liquidation Amount of the Securities. . . . . . . . 5
Ministerial Action. . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Preferred Securities Guarantee. . . . . . . . . . . . . . . . . 5
Preferred Security. . . . . . . . . . . . . . . . . . . . . . . 6
Preferred Security Beneficial Owner . . . . . . . . . . . . . . 6
Preferred Security Certificate. . . . . . . . . . . . . . . . . 6
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-i-
<PAGE>
Property Trustee. . . . . . . . . . . . . . . . . . . . . . . . 6
Property Trustee Account. . . . . . . . . . . . . . . . . . . . 6
Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Regular Trustee . . . . . . . . . . . . . . . . . . . . . . . . 6
Related Party . . . . . . . . . . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 6
Rule 3a-7 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . 6
66- 2/3% in Liquidation Amount of the Securities. . . . . . . . 6
Special Event . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Regular Trustee . . . . . . . . . . . . . . . . . . . . 7
Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Successor Entity. . . . . . . . . . . . . . . . . . . . . . . . 7
Successor Securities. . . . . . . . . . . . . . . . . . . . . . 7
Super Majority. . . . . . . . . . . . . . . . . . . . . . . . . 7
Tax Event . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
10% in Liquidation Amount of the Securities . . . . . . . . . . 8
Treasury Regulations. . . . . . . . . . . . . . . . . . . . . . 8
Trustee; Trustees . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . 8
Underwriting Agreement. . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application. . . . . . . . . . . . . . . . 8
SECTION 2.2. Lists of Holders of Securities. . . . . . . . . . . . . . . . . 9
SECTION 2.3 Reports by the Property Trustee . . . . . . . . . . . . . . . . 9
SECTION 2.4 Periodic Reports to Property Trustee. . . . . . . . . . . . . . 9
SECTION 2.5. Evidence of Compliance with Conditions Precedent. . . . . . . .10
SECTION 2.6. Events of Default; Waiver . . . . . . . . . . . . . . . . . . .10
SECTION 2.7. Event of Default; Notice. . . . . . . . . . . . . . . . . . . .11
ARTICLE III
Organization
SECTION 3.1. Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 3.2. Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 3.3. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-ii-
<PAGE>
SECTION 3.4. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 3.5. Title to Property of the Trust. . . . . . . . . . . . . . . . .13
SECTION 3.6. Powers and Duties of the Regular Trustees . . . . . . . . . . .13
SECTION 3.7. Prohibition of Actions by the Trust and the
Trustees . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 3.8. Powers and Duties of the Property Trustee . . . . . . . . . . .17
SECTION 3.9. Certain Duties and Responsibilities of the
Property Trustee . . . . . . . . . . . . . . . . . . . . .19
SECTION 3.10. Certain Rights of Property Trustee. . . . . . . . . . . . . . .21
SECTION 3.11. Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.12. Execution of Documents. . . . . . . . . . . . . . . . . . . . .24
SECTION 3.13. Not Responsible for Recitals or Issuance
of Securities. . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.14. Duration of Trust . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
ARTICLE IV
Sponsor
SECTION 4.1. Sponsor's Purchase of Common Securities . . . . . . . . . . . .26
SECTION 4.2. Responsibilities of the Sponsor . . . . . . . . . . . . . . . .27
SECTION 4.3. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . .27
ARTICLE V
Trustees
SECTION 5.1. Number of Trustees. . . . . . . . . . . . . . . . . . . . . . .28
SECTION 5.2. Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 5.3. Property Trustee; Eligibility . . . . . . . . . . . . . . . . .29
SECTION 5.4. Qualifications of Regular Trustees and
Delaware Trustee Generally . . . . . . . . . . . . . . . .30
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-iii-
<PAGE>
SECTION 5.5. Initial Trustees. . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 5.6. Appointment, Removal and Resignation
of Trustees. . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 5.7. Vacancies Among Trustees. . . . . . . . . . . . . . . . . . . .33
SECTION 5.8. Effect of Vacancies . . . . . . . . . . . . . . . . . . . . . .33
SECTION 5.9 Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 5.10. Delegation of Power . . . . . . . . . . . . . . . . . . . . . .33
ARTICLE VI
Distributions
SECTION 6.1. Distributions . . . . . . . . . . . . . . . . . . . . . . . . .34
ARTICLE VII
Issuance of Securities
SECTION 7.1. General Provisions Regarding Securities . . . . . . . . . . . .34
ARTICLE VIII
Termination of Trust
SECTION 8.1. Termination of Trust. . . . . . . . . . . . . . . . . . . . . .36
ARTICLE IX
Transfer of Securities
SECTION 9.1. Transfer of Securities. . . . . . . . . . . . . . . . . . . . .37
SECTION 9.2. Transfer of Certificates. . . . . . . . . . . . . . . . . . . .37
SECTION 9.3. Deemed Security Holders . . . . . . . . . . . . . . . . . . . .38
SECTION 9.4. Book Entry Interests. . . . . . . . . . . . . . . . . . . . . .38
SECTION 9.5. Notices to Clearing Agency. . . . . . . . . . . . . . . . . . .39
SECTION 9.6. Appointment of Successor Clearing Agency. . . . . . . . . . . .39
SECTION 9.7. Definitive Preferred Security Certificates. . . . . . . . . . .39
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-iv-
<PAGE>
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen
Certificates. . . . . . . . . . . . . . . . . . . . . . . . . .40
ARTICLE X
Limitation of Liability of Holders
of Securities, Trustees and Others
SECTION 10.1. Liability . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 10.2. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 10.3. Fiduciary Duty. . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 10.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 10.5. Outside Business. . . . . . . . . . . . . . . . . . . . . . . .43
ARTICLE XI
Accounting
SECTION 11.1. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 11.2. Certain Accounting Matters. . . . . . . . . . . . . . . . . . .44
SECTION 11.3. Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 11.4. Withholding . . . . . . . . . . . . . . . . . . . . . . . . . .45
ARTICLE XII
Amendments and Meetings
SECTION 12.1. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 12.2. Meetings of the Holders of Securities; Action
by Written Consent . . . . . . . . . . . . . . . . . . . .47
ARTICLE XIII
Representations
of Property Trustee
SECTION 13.1. Representations and Warranties of Property
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . .49
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-v-
<PAGE>
ARTICLE XIV
Miscellaneous
SECTION 14.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 14.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 14.3. Intention of the Parties. . . . . . . . . . . . . . . . . . . .51
SECTION 14.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 14.5 Successors and Assigns. . . . . . . . . . . . . . . . . . . . .51
SECTION 14.6 Partial Enforceability. . . . . . . . . . . . . . . . . . . . .51
SECTION 14.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .51
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
SIGNATURE AND SEALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
EXHIBIT A: Form of Terms of _______% Trust Preferred Capital Securities and
_______% Trust Common Capital Securities
EXHIBIT B: Specimen of Debenture
EXHIBIT C: Underwriting Agreement
- ----------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Declaration.
-vi-
<PAGE>
FORM
OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NWPS CAPITAL FINANCING III
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of _______________, 1995, by the undersigned trustees (together
with all other Persons from time to time duly appointed and serving as trustees
in accordance with the provisions of this Declaration, the "Trustees"),
Northwestern Public Service Company, a Delaware corporation, as trust sponsor
(the "Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established a trust (the "Trust") under
the Business Trust Act (as defined herein) pursuant to a Declaration of Trust
dated as of June 19, 1995 (the "Original Declaration"), and a Certificate of
Trust filed with the Secretary of State of the State of Delaware on June 19,
1995, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain Debentures (as defined herein) of the
Debenture Issuer (as defined herein).
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend and
restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue the
Trust as a business trust under the Business Trust Act and that this Declaration
constitute the governing instrument of such business trust, the Trustees declare
that all assets contributed to the Trust will be held in trust for the benefit
of the holders, from time to time, of the securities representing undivided
beneficial interests in the assets of the Trust issued hereunder, subject to the
provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE>
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 promulgated
under the Securities Act or any successor rule thereunder.
"Appointment Event" means an event defined in the terms of the Securities, as
set forth in Exhibit A, which entitles the Holders of a Majority in liquidation
amount of the Preferred Securities to appoint a Special Regular Trustee.
"Authorized Officer" of a Person means any Person that is authorized to bind
such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any other day on
which banking institutions in New York, New York are authorized or required by
applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del.
Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
-2-
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, or
any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be dated as of
__________, 1995 of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully registered
form representing a Common Security substantially in the form of Annex II to
Exhibit A.
"Covered Person" means: (a) any officer, director, shareholder, partner, member,
representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Northwestern Public Service Company, in its capacity as
issuer of the Debentures.
"Debenture Trustee" means The Chase Manhattan Bank (N.A.), as trustee under the
Indenture, until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Debentures" means the series of Debentures entitled "___% Junior Subordinated
Deferrable Interest Debentures due ____" to be issued to the Property Trustee by
the Debenture Issuer under the Indenture, a specimen certificate of which is
attached as Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
-3-
<PAGE>
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, or any successor legislation.
"Event of Default" in respect of the Securities means an Event of Default (as
defined in the Indenture) has occurred and is continuing in respect of the
Debentures.
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, or any
officers, directors, shareholders, members, partners, employees, representatives
or agents of any Trustee, or any employee or agent of the Trust or its
Affiliates.
"Indenture" means the Indenture dated as of __________, 1995, between the
Debenture Issuer and The Chase Manhattan Bank (N.A.), as trustee, and the
indenture supplemental thereto pursuant to which the Debentures are to be
issued.
"Investment Company" means an investment company as defined in the Investment
Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as amended
from time to time, or any successor legislation.
"Investment Company Event" means that the Regular Trustees shall have received
an opinion of nationally recognized independent counsel experienced in practice
under the Investment Company Act, that as a result of the occurrence of a change
in law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), the Trust is or will be
considered an "investment company" which is required to be registered under the
1940 Act, which Change in 1940 Act Law becomes effective on or after the date of
the issuance of the Preferred Securities. In case of any uncertainty regarding
an Investment Company Event, the good faith determination of the Regular
Trustees, based on the advice of counsel, shall be conclusive.
-4-
<PAGE>
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning set forth in Section 2.2.
"Majority in liquidation amount of the Securities" means, except as provided in
the Terms of Securities and by the Trust Indenture Act, a vote by Holder(s) of
Securities voting together as a single class or, as the context may require, a
vote by Holder(s) of Preferred Securities or Holder(s) of Common Securities
voting separately as a class, representing a majority of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Securities of such class.
"Ministerial Action" has the meaning set forth in the terms of the Securities as
set forth in Exhibit A.
"Officers' Certificate" means, with respect to any Person, a certificate signed
by two Authorized Officers of such Person. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Person" means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement to be dated as of
__________, 1995, of the Sponsor in respect of the Preferred Securities.
-5-
<PAGE>
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a Preferred
Security substantially in the form of Annex I to Exhibit A.
"Property Trustee" means the Trustee meeting the eligibility requirements set
forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Property Trustee and the
Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property 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 in the Corporate Trust Department
of the Property 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.
"Rule 3a-7" means Rule 3a-7 promulgated under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to time,
or any successor legislation.
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"66-2/3% in liquidation amount of the Securities" means, except as provided in
the Terms of Securities and by the Trust Indenture Act, a vote by Holder(s) of
Securities voting together as a single class or, as the context may require, a
vote by Holder(s) of Preferred Securities or Holder(s) of Common Securities
voting separately as a class, representing 66 2/3% of the liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Securities of such class.
"Special Event" means an Investment Company Event or a Tax Event.
"Special Regular Trustee" means a Regular Trustee appointed by the Holders of a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.6(a)(ii)(B).
"Sponsor" means Northwestern Public Service Company, a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Successor Entity" has the meaning set forth in Section 3.15.
"Successor Securities" has the meaning set forth in Section 3.15.
"Tax Event" means that the Regular Trustees shall have received an opinion of
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) 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, (b) any amendment to or change in an interpretation or application of
any such laws or regulations by any legislative body, court, governmental agency
or regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or after the
date of the issuance of the Preferred Securities), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position, or
(d) any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated or effective, or which
interpretation or pronouncement is issued or announced, or which action is
taken, in each case on or after the date of the issuance of the Preferred
Securities, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income accrued or received on the Debentures,
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(ii) interest payable to the Trust on the Debentures is not, or within 90 days
of the date thereof will not be, deductible, in whole or in part, by the
Debenture Issuer for United States federal income tax purposes or (iii) the
Trust is or will be subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"10% in liquidation amount of the Securities" means, except as provided in the
Terms of Preferred Securities and by the Trust Indenture Act, the vote by
Holder(s) of Securities voting together as a single class or, as the context may
require, the vote by Holder(s) of Preferred Securities or Holder(s) of Common
Securities, voting separately as a class, representing 10% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Securities of such class.
"Treasury Regulations" means the income tax regulations, including temporary and
proposed regulations, promulgated under the Code by the United States Treasury,
as such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration as a
trustee, so long as such Person shall continue in office in accordance with the
terms hereof, and all other Persons who may from time to time be duly appointed,
qualified and serving as Trustees in accordance with the provisions hereof, and
references herein to a Trustee or the Trustees shall refer to such Person or
Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from
time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the offering and
sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to
the extent applicable, be governed by such provisions;
(b) the Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act;
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(c) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall
control; and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the
Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor, the Debenture Issuer and the Regular Trustees on
behalf of the Trust shall provide the Property Trustee (i) within 14
days after each record date for payment of Distributions, a list, in
such form as the Property Trustee may reasonably require, of the
names and addresses of the Holders of the Securities ("List of
Holders") as of such record date, provided that none of the Sponsor,
the Debenture Issuer or the Regular Trustees on behalf of the Trust
shall be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders
given to the Property Trustee by the Sponsor, the Debenture Issuer
and the Regular Trustees on behalf of the Trust, and (ii) at any
other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) provided that the Property Trustee may
destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Property Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property Trustee shall provide to
the Holders of the Preferred Securities such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor, the Debenture Issuer and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such documents, reports and
information as
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required by Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor, the Debenture Issuer and the Regular Trustees on behalf of
the Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Declaration that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of
the Preferred Securities and its consequences, provided that, if the
Event of Default arises out of an Event of Default under the
Indenture:
(i) which is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) which requires the consent or vote of all of the holders of
the Debentures to be waived under the Indenture, the Event
of Default under the Declaration may only be waived by the
vote of all of the Holders of the Preferred Securities .
Upon such waiver, any such default shall cease to exist, and
any Event of Default with respect to the Preferred
Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or an
Event of Default with respect to the Preferred Securities or
impair any right consequent thereon. Any waiver by the
Holders of the Preferred Securities of an Event of Default
with respect to the Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common
Securities of any such Event of Default with respect to the
Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of
the Common Securities.
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(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to
the Common Securities and its consequences, provided that, if the
Event of Default arises out of an Event of Default under the
Indenture:
(i) which is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration is not waivable; or
(ii) which requires the consent or vote of all of the Debentures
to be waived under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in
this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of all of the
Holders of the Common Securities ; provided that, each
Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with
respect to the Common Securities and its consequences until
all Events of Default with respect to the Preferred
Securities have been cured, waived or otherwise eliminated,
and until such Events of Default have been so cured, waived
or otherwise eliminated, the Property Trustee will be deemed
to be acting 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 in accordance with the terms of the Securities.
Subject to the foregoing provisions of this Section 2.6(b),
upon such waiver, any such default shall cease to exist and
any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of
Default with respect to the Common Securities or impair any
right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the
Preferred Securities constitutes a waiver of the
corresponding Event of Default under this Declaration.
SECTION 2.7 Event of Default; Notice.
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(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Securities,
notices of all defaults with respect to the Securities known
to the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults"
for the purposes of this Section 2.7(a) being hereby defined
to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein;
provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the
Debentures or in the payment of any sinking fund installment
established for the Debentures, the Property Trustee shall
be protected in withholding such notice if and so long as
the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the
Property Trustee in good faith determines that the
withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 6.01(a)(1) and 6.01(a)(2) of
the Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or a Responsible Officer
charged with the administration of the Declaration
shall have obtained written notice of.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "NWPS Capital Financing I", as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Northwestern Public
Service Company, 33 Third Street, S.E., Huron, South Dakota 57350. On ten
Business Days
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written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the proceeds from such sale to acquire the Debentures, and
(b) except as otherwise limited herein, to engage in only those other activities
necessary or incidental thereto. The Trust shall not borrow money, issue debt
or reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would (i)
cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust or (ii) cause each Holder of Securities not to be
treated as owning an undivided beneficial interest in the Debentures at any time
the Securities are outstanding.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the specific
duties of the Property Trustee, the Regular Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
Subject to Section 4.2, any Regular Trustee shall have the power, duty and
authority to cause the Trust to engage in the following activities:
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(a) to issue and sell the Preferred Securities and the Common Securities
in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and
no more than one series of Common Securities, and, provided further,
that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a
one-time, simultaneous issuance of both Preferred Securities and
Common Securities;
(b) in connection with the issue and sale of the Preferred Securities,
to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary
in order to qualify or register all or part of the Preferred
Securities in any State in which the Sponsor has determined
to qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor, to
the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing upon
notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange
Act; and
(v) execute and enter into the Underwriting Agreement providing
for the sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures
to be held of record in the name of the Property Trustee for the
benefit of the Holders of the Preferred Securities and the Holders
of Common Securities;
(d) to give the Debenture Issuer, the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event; provided
that the Regular Trustees shall consult with the Debenture Issuer,
the Sponsor and the Property Trustee before taking or refraining from
taking any Ministerial Action in relation to a Special Event;
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(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and
with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and
exchanges, and to issue relevant notices to the Holders of Preferred
Securities and Holders of Common Securities as to such actions and
applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Property Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to carry out any
of the purposes of the Trust;
(l) to act as, or appoint another Person to act as registrar and transfer
agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debenture Issuer of its election (i) to
defer payments of interest on the Debentures by extending the
interest payment period under the Indenture, or (ii) to extend the
scheduled maturity date on the Debentures;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence,
rights, franchises and
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privileges as a statutory business trust under the laws of the State
of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the
Securities or to enable the Trust to effect the purposes for which
the Trust was created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.6, including,
but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment
Company Act;
(ii) causing the Trust not to be characterized for United States
federal income tax purposes as an association taxable as a
corporation or a partnership but for each Holder of
Securities to be treated as owning an undivided beneficial
interest in the Debentures; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the
interests of Holders; and
(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on
behalf of the Trust.
The Regular Trustees must exercise the powers set forth in this Section 3.6 in a
manner that is consistent with the purposes and functions of the Trust set out
in Section 3.3, and the Regular Trustees shall not take any action that is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the powers
or the authority of the Property Trustee set forth in Section 3.8.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall not:
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(i) invest any proceeds received by the Trust from holding the
Debentures but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and
of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past default that
is waivable under Section 513 of the Indenture, (C) exercise
any right to rescind or annul any declaration that the
principal of all the Debentures shall be due and payable or
(D) consent to any amendment, modification or termination of
the Indenture or the Debentures, where such consent shall be
required, unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause
more than an insubstantial risk that for United States
federal income tax purposes the Trust will be characterized
as an association taxable as a corporation or a partnership
and that each Holder of Securities will not be treated as
owning an undivided beneficial interest in the Debentures.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit
of the Holders of the Securities. The right, title and interest of
the Property Trustee to the Debentures shall vest automatically in
each Person who may hereafter be appointed as Property Trustee in
accordance with Section 5.6. Such vesting and cessation of title
shall be effective whether or not conveyancing documents with regard
to the Debentures have been executed and delivered;
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(b) the Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Property Trustee does not also act as Delaware Trustee);
(c) the Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name
of and under the exclusive control of the Property Trustee
on behalf of the Holders of the Securities and, upon the
receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds
into the Property Trustee Account and make payments to the
Holders of the Preferred Securities and Holders of the
Common Securities from the Property Trustee Account in
accordance with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee
Account shall be an account that is maintained with a
banking institution the rating on whose long term unsecured
indebtedness is at least equal to the rating assigned to the
Preferred Securities by a "nationally recognized statistical
rating organization", as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon notice of distribution issued by the Regular Trustees
in accordance with the terms of the Preferred Securities and
the Common Securities, engage in such ministerial activities
as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon
the occurrence of certain special events (as may be defined
in the terms of the Securities) arising from a change in law
or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Securities;
(d) the Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to
the terms of the Securities;
(e) the Property Trustee shall take any Legal Action which arises out of
or in connection with an Event of Default or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture
Act;
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(f) the Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6;
(g) the Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as holder of the Debentures subject to the rights
of the Holders pursuant to the terms of such Securities;
(h) the Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all
securities and any such Paying Agent shall comply with Section 317(b)
of the Trust Indenture Act. Any Paying Agent may be removed by the
Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property
Trustee; and
(i) subject to this Section 3.8, the Property Trustee shall have none of
the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section 3.8
in a manner which is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Property Trustee shall not take any action
which is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of Default
and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and no implied covenants
shall be read into this Declaration against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Property Trustee shall exercise
such of the rights and powers vested in it by this Declaration, and
use the same degree of care and skill in their
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exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
(b) no provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions
of this Declaration and the Property Trustee shall not
be liable except for the performance of such duties
and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations
shall be read into this Declaration against the
Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the
Property Trustee and conforming to the requirements of
this Declaration; but in the case of any such
certificates or opinions that by any provision hereof
are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under
a duty to examine the same to determine whether or not
they conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Securities at
the time outstanding relating to the time, method and place
of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
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(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or
powers, if it shall have reasonable ground for believing
that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration
or adequate indemnity against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the
Debentures and the Property Trustee Account 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 Declaration, the
Trust Indenture Act and Rule 3a-7;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree
with the Sponsor. Money held by the Property Trustee need
not be segregated from other funds held by it except in
relation to the Property Trustee Account maintained by the
Property Trustee pursuant to Section 3.8(c)(i) and except to
the extent otherwise required by law;
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsors with
their respective duties under this Declaration, nor shall
the Property Trustee be liable for the default or misconduct
of the Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or
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other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently
evidenced by a Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting
any action hereunder, the Property Trustee (unless other
evidence is herein specifically prescribed) may, in the
absence of bad faith on its part and, if the Trust is
excluded from the definition of an Investment Company solely
by means of Rule 3a-7, subject to the requirements of Rule
3a-7, request and rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by
the Sponsor or the Regular Trustees;
(iv) 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
tax or securities) (or any rerecording, refiling or
registration thereof);
(v) the Property Trustee may consult with counsel and the advice
or opinion of such counsel and the experts with respect to
legal matters or advice within the scope of such experts'
area of expertise shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with
such advice or opinion such counsel may be counsel to the
Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any
time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder,
unless such Holder shall have provided to the Property
Trustee adequate security and indemnity, which would satisfy
a reasonable person in the position of the Property Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Property
Trustee, provided that nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property
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Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Declaration;
(vii) 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, 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;
(viii) 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;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the
Securities and the signature of the Property Trustee or its
agents alone shall be sufficient and effective to perform
any such action; and no third party shall be required to
inquire as to the authority of the Property Trustee to so
act, or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its
agent's taking such action;
(x) whenever in the administration of this Declaration 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
(i) may request instructions from the Holders of the
Securities, which instructions may only be given by the
Holders of the same proportion and liquidation amount of the
Securities as would be entitled to direct the Property
Trustee under the terms of the Securities in respect of such
remedies, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in
acting in accordance with such instructions; and
(xi) except as otherwise expressly provided by this Declaration,
the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions
of this Declaration.
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(b) No provision of this Declaration 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. No permissive power or
authority available to the Property Trustee shall be construed to be
a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section 5.2,
the Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees or the Property Trustee described in this Declaration. Except as set
forth in Section 5.2, the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Business
Trust Act.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, any Regular Trustee is
authorized to execute on behalf of the Trust any documents which the Regular
Trustees have the power and authority to execute pursuant to Section 3.6.
Notwithstanding anything to the contrary herein, the Sponsor is authorized to
execute on behalf of the Trust any documents referred to in Section 4.2.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make
no representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII hereof,
shall have existence for 55 years from the date of the Prospectus Supplement
relating to the Debentures.
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SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except
as described in Section 3.15(b) and (c);
(b) the Trust may, with the consent of a majority of the Regular Trustees
and without the consent of the Holders of the Securities, the
Delaware Trustee or the Property Trustee consolidate, amalgamate,
merge with or into, or be replaced by a trust organized as such under
the laws of any State; provided, that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Preferred Securities; or
(B) substitutes for the Preferred Securities other
securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and
payments upon liquidation, redemption and maturity;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity which possesses the same powers and duties
as the Property Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities
exchange or other organization on which the Preferred
Securities are then listed;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities or any Successor
Securities to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges
of the Holders of the Preferred Securities or any Successor
Securities in any material respect under the documents
governing the Preferred Securities or the Successor
Securities (other than with respect to any dilution of such
Holders' interests in the new entity);
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(vi) such Successor Entity has a purpose substantially identical
to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the
Preferred Securities or any Successor Securities in
any material respect under the documents governing the
Preferred Securities or the Successor Securities
(other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor
Entity will be required to register as an Investment
Company; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee; and
(c) notwithstanding Section 3.15(b), the Trust shall, except with the
consent of Holders of 100% in liquidation amount of the Securities,
not consolidate, amalgamate, merge with or into, or be replaced by
any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause the Trust or
Successor Entity for United States federal income tax purposes to be
classified as an association taxable as a corporation or a
partnership and each Holder of the Securities not to be treated as
owning an undivided beneficial interest in the Debentures.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On ___________________, 1995 the Sponsor will purchase all the Common Securities
issued by the Trust, in an amount equal to 3% of the capital of the Trust, at
the same time as the Preferred Securities are sold. The purchase price paid for
the Common
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Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the Sponsor
shall have the right and responsibility to engage in the following activities
and may execute on behalf of the Trust the documents referred to in subsections
(a) through (e) of this Section 4.2:
(a) to prepare for filing by the Trust with the Commission a registration
statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities
and to take any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and
filed by the Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a registration
statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing for
the sale of the Preferred Securities.
4.3 Expenses
(a) The Sponsor shall be directly responsible for and pay for all debts
and obligations (other than with respect to the Securities) and all
costs and expenses of the Trust, including, without limitation, the
costs and expenses relating to the organization of the Trust, the
issuance of the Preferred Securities, the fees and expenses of any
Special Regular Trustee, the Property Trustee and the Delaware
Trustee, the costs and expenses related to the operation of the
Trust, including, without limitation, the costs and
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expenses of accountants, attorneys, statistical or bookkeeping
services, expenses of printing and engraving, paying agents(s),
registrar(s), transfer agent(s), duplicating, travel, telephone and
costs and expenses incurred in connection with the disposition of
Trust assets.
(b) The Sponsor will pay any and all taxes and all liabilities, costs and
expenses with respect to such taxes of the Trust.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees shall initially be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities:
(i) and except as provided in Sections 5.1(b)(ii) and
5.6(a)(ii)(B) with respect to the Special Regular Trustee,
the number of Trustees may be increased or decreased by vote
of the Holders of a Majority in liquidation amount of the
Common Securities voting as a class at a meeting of the
Holders of the Common Securities; and
(ii) the number of Trustees shall be increased automatically by
one (1) if an Appointment Event has occurred and is
continuing and the Holders of a Majority in liquidation
amount of the Preferred Securities appoint a Special Regular
Trustee in accordance with Section 5.6,
provided that in any case, the number of Trustees shall be at least three (3)
(the majority of which shall be Regular Trustees), and if there are only three
Trustees:
(c) the Trustee that acts as the Property Trustee shall also act
as the Delaware Trustee pursuant to Section 5.2.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall be:
(a) a natural person who is a resident of the State of Delaware; or
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(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the
requirements of applicable law
provided that if the Property Trustee has its principal place of business in the
State of Delaware and otherwise meets the requirements of applicable law, then
the Property Trustee shall also be the Delaware Trustee and Section 3.11 shall
have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as Property
Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes
of this Section 5.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report
of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and to the
extent Rule 3a-7 requires a trustee having certain
qualifications to hold title to the "eligible assets" of the
Trust, the Property Trustee shall possess those
qualifications.
(b) If at any time the Property Trustee shall cease to be eligible to so
act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set out in Section 5.6(c)
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture
Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all
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respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the Property Trustee also
acts as Delaware Trustee) shall be either a natural person who is at least 21
years of age or a legal entity that shall act through one or more Authorized
Officers.
SECTION 5.5 Initial Trustees.
The initial Regular Trustees shall be:
Merle D. Lewis
33 Third Street SE
P.O. Box 1318
Huron, South Dakota 57350-1318
Richard R. Hylland
33 Third Street SE
P.O. Box 1318
Huron, South Dakota 57350-1318
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
who shall also act as Property Trustee.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
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(ii) after the issuance of any Securities;
(A) other than in respect to a Special Regular Trustee by
vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; and
(B) if an Appointment Event has occurred and is
continuing, one (1) additional Regular Trustee (the
"Special Regular Trustee") may be appointed by vote of
the Holders of a Majority in liquidation amount of the
Preferred Securities, voting as a class at a meeting
of the Holders of the Preferred Securities and such
Special Regular Trustee may only be removed (otherwise
than by the operation of Section 5.6(c)), by vote of
the Holders of a Majority in liquidation amount of the
Preferred Securities voting as a class at a meeting of
the Holders of the Preferred Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a successor
Property Trustee has been appointed and has accepted such
appointment by written instrument executed by such successor
Property Trustee and delivered to the Regular Trustees and
the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.6(a) until a
successor Trustee possessing the qualifications to act as
Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and
the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of a Trustee,
provided that a Special Regular Trustee shall only hold office while
an Appointment Event is continuing and shall cease to hold office
immediately after the Appointment Event pursuant to which the Special
Regular Trustee was appointed and all other Appointment Events cease
to be continuing. Any Trustee may resign from office (without need
for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust,
which resignation shall take effect upon such delivery or upon such
later date as is specified therein; provided, however, that:
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(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a successor Property Trustee has been appointed
and has accepted such appointment by instrument
executed by such successor Property Trustee and
delivered to the Trust, the Sponsor and the resigning
Property Trustee; or
(B) if the Trust is not deemed an Investment Company
solely by reason of Rule 3a-7, until the assets of the
Trust have been completely liquidated and the proceeds
thereof distributed to the Holders of the Securities;
and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment
by instrument executed by such Successor Delaware Trustee
and delivered to the Trust, the Sponsor and the resigning
Delaware Trustee; and
(iii) no such resignation of a Special Regular Trustee shall be
effective until the 60th day following delivery of the
instrument of resignation of the Special Regular Trustee to
the Sponsor and the Trust or such later date specified in
such instrument during which period the Holders of the
Preferred Securities shall have the right to appoint a
successor Special Regular Trustee as provided in this
Section 5.6; and
(d) the Holders of the Common Securities shall use their best efforts to
appoint promptly a Successor Delaware Trustee or successor Property
Trustee, as the case may be, if the Delaware Trustee or the Property
Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) if no successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the
Trust of an instrument of resignation, the resigning Property Trustee
or Delaware Trustee, as applicable, may petition any court of
competent jurisdiction for appointment of a successor Property
Trustee or Successor Delaware Trustee. Such court may thereupon,
after causing such notice to be given, if any, as it may deem proper
and prescribe, appoint a successor Property Trustee or Successor
Delaware Trustee, as the case may be.
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SECTION 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of Trustees is
not reduced pursuant to Section 5.1, or if the number of Trustees is increased
pursuant to Section 5.1, a vacancy shall occur. A resolution certifying the
existence of such vacancy by a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 Meetings.
Meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any
in-person meetings of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meetings of the Regular Trustees or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before a meeting. Notices
shall contain a brief statement of the time, place and anticipated purposes of
the meeting. The presence (whether in person or by telephone) of a Regular
Trustee at a meeting shall constitute a waiver of notice of such meeting except
where a Regular Trustee attends a meeting for the express purpose of objecting
to the transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration, any
action of the Regular Trustees may be taken at a meeting by vote of a majority
of the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of
21 his or her
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power for the purpose of executing any documents contemplated in
Section 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental
filing; and
(b) the Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of
the Trust or the names of the Regular Trustees or otherwise as the
Regular Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the applicable terms of
the relevant Holder's Securities. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms. If and to the extent that the Debenture Issuer
makes a payment of interest (including Compounded Interest (as defined in the
Indenture)) and Additional Interest (as defined in the Indenture), premium of
and principal on the Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are legally available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
preferred securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit
A and incorporated herein by reference (the "Preferred Securities")
and one class of common securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set
forth in Exhibit A (the "Common Securities"). The Trust shall have no
securities or other interests in the assets of the Trust other than
the Preferred Securities and the Common Securities.
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(b) The Certificates shall be signed on behalf of the Trust by any two
of the Regular Trustees. Such signatures may be the manual or
facsimile signatures of the present or any future Regular Trustee.
Typographical and other minor errors or defects in any such
reproduction of any such signature shall not affect the validity of
any Certificate. In case any Regular Trustee of the Trust who shall
have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the
Person who signed such Certificates had not ceased to be such Regular
Trustee; and any Certificate may be signed on behalf of the Trust by
such Persons who, at the actual date of execution of such Security,
shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such Person was not
such a Regular Trustee. Certificates shall be printed, lithographed
or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to
comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid
and non-assessable, except with respect to the Common Securities as
provided in Section 10.1(b) of this Declaration.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to
the terms of, and shall be bound by, this Declaration, the Preferred
Securities Guarantee and the Indenture.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common Securities,
the Sponsor or the Debenture Issuer;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common
Securities, the Sponsor or the Debenture Issuer, the filing
of a certificate of cancellation with respect to the Trust
or the revocation of the charter of the Holder of the Common
Securities, the Sponsor or the Debenture Issuer and the
expiration of 90 days after the date of revocation without a
reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor, the Debenture
Issuer or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof
shall have been paid to the Holders in accordance with the
terms of the Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the
Debentures endorsed thereon shall have been distributed to
the Holders of Securities in exchange for all of the
Securities; or
(vi) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware;
and
(c) the provisions of Article X shall survive the termination of the
Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities. Any transfer or
purported transfer of any Security not made in accordance with this
Declaration shall be null and void;
(b) subject to this Article IX, Preferred Securities shall be freely
transferable; and
(c) subject to this Article IX, to the fullest extent permitted by law,
the Sponsor and any Related Party may only transfer Common Securities
to the Sponsor or a Related Party of the Sponsor; provided that, any
such transfer is subject to the condition precedent that the
transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would be classified for United States federal
income tax purposes as an association taxable as a
corporation or a partnership and each Holder of Securities
would not be treated as owning an undivided beneficial
interest in the Debentures; and
(ii) the Trust or the transferree would be an Investment Company
or would be controlled by an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and of
transfers of Certificates, which will be effected without charge but only upon
payment (with such indemnity as the Regular Trustees may require) in respect of
any tax or other government charges which may be imposed in relation to it.
Upon surrender for registration of transfer of any Certificate, the Regular
Trustees shall cause one or more new Certificates to be issued in the name of
the designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance
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of a Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration and the documents incorporated by reference herein.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Securities Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the
Preferred Securities and the sole holder of the Global Certificates
and shall have no obligation to the Preferred Security Beneficial
Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred
Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants and
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receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make
book entry transfers among the Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders is
required under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.7, the Regular Trustees shall give all such notices and
communications specified herein to be given to the Preferred Security Holders to
the Clearing Agency, and shall have no notice obligations to the Preferred
Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such
Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall
cause Definitive Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any
delay in delivery of such instructions and each of them may
conclusively rely on and shall be
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protected in relying on, said instructions of the Clearing Agency.
The Definitive Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof in accordance with Section 7.1(b), and may have
such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which Preferred Securities may be
listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate;
and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless.
then:
In the absence of notice that such Certificate shall have been acquired by a
bona fide purchaser, any two Regular Trustees on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees 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 Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES AND OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Preferred
Securities Guarantee, the Common Securities Guarantee and the Terms
of Securities, the Sponsor shall not be:
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(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders
of the Securities which shall be made solely from assets of
the Trust; and
(ii) required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise; and
(b) Pursuant to Section 3803(a) of the Business Trust Act, the Holder of
the Common Securities shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities).
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State
of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to
be within the scope of the authority conferred on such Indemnified
Person by this Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by
reason of such Indemnified Person's gross negligence (or, in the case
of the Property Trustee, except as otherwise set forth in Section
3.9) or willful misconduct with respect to such acts or omissions;
and
(b) an Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person
as to matters the Indemnified Person reasonably believes are within
such other Person's professional or expert competence and who has
been selected with reasonable care by or on behalf of the Trust,
including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
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SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to
any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration,
to the extent that they restrict the duties and liabilities of an
Indemnified Person otherwise existing at law or in equity (other than
the duties imposed on the 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:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any Holder of
Securities,
the Indemnified Person shall resolve such conflict of interest, take
such action or provide such terms, considering in each case the
relative interest of each party (including its own interest) to such
conflict, agreement, transaction or situation and the benefits and
burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so made, taken or
provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or
otherwise; and
(c) whenever in this Declaration an Indemnified Person is permitted or
required to make a decision
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the
Trust or any other Person; or
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(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor shall
indemnify and hold harmless each Indemnified Person from and against
any loss, damage, liability, tax, penalty, expense or claim of any
kind or nature whatsoever incurred by such Indemnified Person by
reason of the creation, operation or termination of the Trust or any
act or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Declaration, except that
no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Indemnified Person by
reason of gross negligence (or, in the case of the Property Trustee,
except as otherwise set forth in Section 3.9) or willful misconduct
with respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Sponsor prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by the
Sponsor of an undertaking by or on behalf of the Indemnified Person
to repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified as authorized in Section
10.4(a).
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Debenture Issuer, the Delaware Trustee and
the Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Debenture Issuer, the Delaware Trustee, or the Property Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor, the Debenture
Issuer, the Delaware Trustee and
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the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any Affiliate of the Sponsor, or may act
as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or such
other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained
on the accrual method of accounting, in accordance with generally
accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal
income tax purposes. The books of account and the records of the
Trust shall be examined by and reported upon as of the end of each
Fiscal Year by a firm of independent certified public accountants
selected by the Regular Trustees;
(b) the Regular Trustees shall cause to be prepared and delivered to each
of the Holders of Securities, within 90 days after the end of each
Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal
Year, and the related statements of income or loss;
(c) the Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities any United States federal income
tax information statement required by the Code, containing such
information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding
any right under the Code to deliver any such statement at a later
date, the Regular Trustees shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the
Trust; and
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(d) the Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority an annual United States federal
income tax return on such form as is required by United States
federal income tax law, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust
with any state or local taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for the sole
benefit of the Trust; provided, however, that all payments of funds in respect
of the Debentures held by the Property Trustee shall be made directly to the
Property Trustee Account and no other funds of the Trust shall be deposited in
the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Regular Trustees; provided, however, that the Property Trustee
shall designate the sole signatories for the Property Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed overwithholding, to the fullest extent permitted by law, Holders
shall be limited to an action against the applicable jurisdiction. If the
amount required to be withheld was not withheld from actual Distributions made,
the Trust may reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may be amended by, and only
by,
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a written instrument approved and executed by the Regular Trustees
(or, if there are more than two Regular Trustees a majority of the
Regular Trustees); provided, however, that:
(i) no amendment shall be made, and any such purported amendment
shall be void and ineffective, to the extent the result
thereof would be to
(A) cause the Trust to be characterized for purposes of
United States federal income taxation as an
association taxable as a corporation or a partnership
and each Holder of Securities not to be treated as
owning an undivided beneficial interest in the
Debentures;
(B) affect the powers, rights, duties, obligations or
immunities of the Property Trustee or the Delaware
Trustee (unless such amendment is consented to in
writing by the Property Trustee or the Delaware
Trustee, as the case may be); or
(C) cause the Trust to be deemed an Investment Company
that is required to be registered under the Investment
Company Act;
(ii) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would materially
adversely affect the rights, privileges or preferences of
any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of
such Securities;
(iii) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(iv) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common
Securities; and
(v) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint
and remove Trustees shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the
Common Securities (except to the extent such amendment
relates to the Special Regular Trustee, in which case such
amendment may only be made in accordance with the terms of
the Preferred Securities).
(b) Notwithstanding Section 12.1(a)(ii), this Declaration may be amended
without the consent of the Holders of the Securities to:
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(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of
this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) conform to any change in Rule 3a-7 or written change in
interpretation or application of Rule 3a-7 by any
legislative body, court, government agency or regulatory
authority which amendment does not have a material adverse
effect on the right, preferences or privileges of the
Holders.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of
such class, if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall
be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders of Securities calling a meeting
shall specify in writing the Certificates held by the Holders of
Securities exercising the right to call a meeting and only those
specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this
paragraph has been met; and
(b) except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of
Holders of Securities:
(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of
Securities is permitted or required under this Declaration
or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the
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Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less
than the minimum amount of Securities in liquidation amount
that would be necessary to authorize or take such action at
a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of
the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that
any written ballot submitted to the Holder for the purpose
of taking any action without a meeting shall be returned to
the Trust within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure
of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person
that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms
of the Securities or the listing rules of any stock exchange
on which the Preferred Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the
time, place or purpose of any meeting at which any matter is
to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to
the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee which acts as initial Property Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under
the laws of the State of Delaware with trust power and authority to
execute and deliver, and to carry out and perform its obligations
under the terms of, the Declaration.
(b) The execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been
duly executed and delivered by the Property Trustee, and it
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered
in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Property Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the
Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly signed by
the party giving such notice, and shall be delivered, telecopied or mailed by
registered or certified mail, as follows:
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(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
NWPS CAPITAL FINANCING III
33 Third Street, S.E.
Huron, South Dakota 57350
Attention: __________________
(b) if given to the Property Trustee or the Delaware Trustee, at the
mailing address set forth below (or such other address as the
Property Trustee or the Delaware Trustee may give notice of to the
Holders of the Securities):
WILMINGTON TRUST COMPANY
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
(c) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
NORTHWESTERN PUBLIC SERVICE COMPANY
33 Third Street, S.E.
Huron, South Dakota 57350
Attention: __________________
(d) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in person,
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 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be governed by
and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to principles
of conflict of laws.
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SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust not be characterized
for United States federal income tax purposes as an association taxable as a
corporation or a partnership but rather, the Trust be characterized as a grantor
trust or otherwise in a manner that each Holder of Securities be treated as
owning an undivided beneficial interest in the Debentures. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of reference
only and do not affect the interpretation of this Declaration or any provision
hereof.
SECTION 14.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or referred to,
the successors and assigns of such party shall be deemed to be included, and all
covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature page and
this Declaration may be executed by the affixing of the signature of each of the
Trustees to one of such counterpart signature pages. All of such counterpart
signature pages shall be read as though one, and they shall have the same force
and effect as though all of the signers had signed a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as
of the day and year first above written.
NORTHWESTERN PUBLIC SERVICE COMPANY
as Sponsor
By:
-----------------------------------------------
Name:
Title:
--------------------------------------------------
Merle D. Lewis, as Regular Trustee
--------------------------------------------------
Richard R. Hylland, as Regular Trustee
WILMINGTON TRUST COMPANY
as Delaware Trustee and Property Trustee
By:
-----------------------------------------------
Name:
Title:
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EXHIBIT A
TERMS OF SECURITIES
TERMS OF
_____% TRUST PREFERRED CAPITAL SECURITIES
_____% TRUST COMMON CAPITAL SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated
as of __________, 1995 (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
(a) "Preferred Securities." Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust
of $_____ million ($__________) and a liquidation amount with respect
to the assets of the Trust of $25 per Preferred Security, are hereby
designated for the purposes of identification only as "_____% Trust
Preferred Capital Securities" (the "Preferred Securities"). The
Preferred Security Certificates evidencing the Preferred Securities
shall be substantially in the form attached hereto as Annex I, with
such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange on which the Preferred Securities are
listed.
(b) "Common Securities." Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of $_____
million ($___________) and a liquidation amount with respect to the
assets of the Trust of $25 per Common Security, are hereby designated
for the purposes of identification only as "_____% Trust Common
Capital Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially
in the form attached hereto as Annex II, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. DISTRIBUTIONS.
(a) Distributions payable on each Security will be fixed at a rate per
annum of _____% (the "Coupon Rate") of the stated liquidation amount
of $25 per Security, such rate being the rate of interest payable on
the Debentures to
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be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at
the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such periodic cash
distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made
in respect of the Debentures held by the Property Trustee. The
amount of Distributions payable for any period will be computed for
any full quarterly Distribution period on the basis of a 360-day year
of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of
days elapsed in such a 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue from
__________, 1995 and will be payable quarterly in arrears, on March
31, June 30, September 30, and December 31 of each year, commencing
on __________, 1995, except as otherwise described below. The
Debenture Issuer has the right under the Indenture to defer payments
of interest by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive
quarters (each an "Extension Period") and, as a consequence of such
extension, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture
Issuer may further extend such Extension Period; provided that such
Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters. Payments
of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above
requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business
Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Debentures. Subject
to any applicable laws and regulations and the provisions of the
Declaration, each such payment in respect of the Preferred Securities
will be made as described under the heading "Description of the
Preferred Securities -- Book-Entry Only Issuance -- The Depository
Trust Company" in the Prospectus Supplement dated
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__________, 1995, to the Prospectus dated __________, 1995 (together,
the "Prospectus"), of the Trust included in the Registration
Statement on Form S-3 of the Sponsor, the Debenture Issuer and the
Trust. The relevant record dates for the Common Securities, and, if
the Preferred Securities shall not continue to remain in book-entry
only form, the relevant record dates for the Preferred Securities,
shall conform to the rules of any securities exchange on which the
securities are listed and, if none, shall be selected by the Regular
Trustees, which dates shall be at least one Business Day but less
than 60 Business Days before the relevant payment dates, which
payment dates correspond to the interest payment dates on the
Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the
Debenture Issuer having failed to make a payment under the Debentures
will cease to be payable to the Person in whose name such Securities
are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a
Business Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the
Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors of the Trust an amount
equal to the aggregate of the stated liquidation amount of $25 per Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Securities, with
an interest rate equal to the Coupon Rate of, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, such
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Securities, shall be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
If, upon any such dissolution, winding-up or termination of the Trust, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Securities
shall be paid on a Pro Rata basis.
4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Debentures in whole or in part, whether at
maturity or upon redemption, the proceeds from such repayment or
payment shall be thereupon applied to redeem Securities having an
aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed at a redemption price of $25
per Security plus an amount equal to accrued and unpaid Distributions
thereon at the date of the redemption, payable in cash (the
"Redemption Price"). Holders will be given not less than 30 nor more
than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as
described in Paragraph 4(f)(ii) below.
(c) If a Tax Event (as defined below) or an Investment Company Event (as
defined below) (each, a "Special Event"), shall occur and be
continuing, the Regular Trustees shall dissolve the Trust except in
the limited circumstances described below, and, after satisfaction of
liabilities to creditors of the Trust, cause Debentures held by the
Property Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on and having the same
record date for payment as the Securities, to be distributed to the
Holders of the Securities in liquidation of such Holders' interests
in the Trust on a Pro Rata basis, within 90 days following the
occurrence of such Special Event (the "90-Day Period"); provided,
however, that in the case of the occurrence of a Tax Event, such
dissolution and distribution shall be conditioned on the Regular
Trustees' receipt of an opinion of a nationally recognized
independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue
rulings of the Internal Revenue Service, to the effect that the
Holders of the Securities will not recognize any gain or loss for
United States federal income tax purposes as a result of the
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dissolution of the Trust and the distribution of Debentures; and
provided, further, that, if at the time there is available to the
Trust the opportunity to eliminate, within the 90-Day Period, the
Special Event by taking some ministerial action, such as filing a
form or making an election or pursuing some other similar reasonable
measure that has no adverse effect on the Trust, the Debenture
Issuer, the Sponsor or the Holders of the Securities ("Ministerial
Action"), the Trust will pursue such Ministerial Action in lieu of
dissolution and distribution as described therein. Furthermore, if
in the case of the occurrence of a Tax Event, after receipt of a
Dissolution Tax Opinion (as defined below) by the Regular Trustees
(i) the Debenture Issuer has received an opinion (a "Redemption Tax
Opinion") of a nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there
is more than an insubstantial risk that the Debenture Issuer would be
precluded from deducting the interest on the Debentures for United
States federal income tax purposes even if the Debentures were
distributed to the Holders of Securities in liquidation of such
Holders' interests in the Trust as described in this paragraph 4(c),
or (ii) the Regular Trustees shall have been informed by such tax
counsel that a No Recognition Opinion cannot be delivered to the
Trust, the Debenture Issuer shall have the right at any time, upon
not less than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash within 90 days following the
occurrence of such Tax Event, and, following such redemption,
Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed shall be
redeemed by the Trust at the Redemption Price on a Pro Rata basis;
provided, however, that, if at the time there is available to the
Trust the opportunity to eliminate, within such 90-day period, the
Tax Event by taking some Ministerial Action, the Trust or the
Debenture Issuer will pursue such Ministerial Action in lieu of
redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the
effect that on or after the date of the Prospectus Supplement, as a
result of (a) 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, (b) any amendment to or change in an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of
any judicial decision or regulatory determination on or after the
date of the issuance of the Preferred Securities), (c) any
interpretation or pronouncement that provides for a position with
respect to such laws or regulations that differs from the
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theretofore generally accepted position, or (d) any action taken by
any governmental agency or regulatory authority, which amendment or
change is enacted, promulgated or effective, or which interpretation
or pronouncement is issued or announced, or which action is taken, in
each case on or after the date of the issuance of the Preferred
Securities, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to
United States federal income tax with respect to interest accrued or
received on the Debentures, (ii) the Trust is, or will be within 90
days of the date thereof, subject to more than a de minimis amount of
taxes, duties or other governmental charges, or (iii) interest
payable by the Debenture Issuer to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible,
in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act of 1940, as
amended (the "1940 Act"), that as a result of the occurrence of a
change in law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act
Law"), the Trust is or will be considered an "investment company"
which is required to be registered under the 1940 Act, which Change
in 1940 Act Law becomes effective on or after the date of the
issuance of the Preferred Securities. In case of any uncertainty
regarding an Investment Company Event, the good faith determination
of the Regular Trustees, based on the advice of counsel, shall be
conclusive.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) The
Depository Trust Company (the "Depository") or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of
the Preferred Securities, will receive a registered global
certificate or certificates representing the Debentures to be
delivered upon such distribution and (iii) any certificates
representing Securities, except for certificates representing
Preferred Securities held by the Depository or its nominee (or any
successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate
principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal to accrued and unpaid Distributions, on
such Securities until such certificates are presented to the
Debenture Issuer or its agent for transfer or reissue.
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(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or
before the date of redemption.
(e) If the Debentures are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use
its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other exchange as the Preferred Securities were
listed immediately prior to the distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the Trust
by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the
case of a redemption, will be the date fixed for redemption
of the Debentures. For purposes of the calculation of the
date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given
on the day such notice is first mailed by first-class mail,
postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect
in the Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with
respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities
are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Preferred Securities,
it being understood that, in respect of Preferred Securities
registered in the name of and held of record by the
Depository (or any successor Clearing Agency) or any
nominee, the distribution of the proceeds of such redemption
will be made to such Clearing Agency Participant (or Person
on whose behalf such nominee holds such Securities) in
accordance with the procedures applied by such offering or
nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be
issued if the Debentures are redeemed as set out in this
paragraph 4 (which
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notice will be irrevocable), then (A) while the Preferred
Securities are in book-entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City time, on
the redemption date, provided that the Debenture Issuer has
paid the Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the
Debentures, the Property Trustee will deposit irrevocably
with the Depositary (or successor Clearing Agency) funds
sufficient to pay the applicable Redemption Price with
respect to the Preferred Securities and will give the
Depository irrevocable instructions and authority to pay the
Redemption Price to the Holders of the Preferred Securities,
and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the
Debenture Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will pay
the relevant Redemption Price to the Holders of such
Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on
the redemption date. If a Redemption/ Distribution Notice
shall have been given and funds deposited as required, if
applicable, then immediately prior to the close of business
on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the
Securities so called for redemption and all rights of
Holders of such Securities so called for redemption will
cease, except the right of the Holders of such Securities to
receive the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be
registered the transfer of any Securities that have been so
called for redemption. If any date fixed for redemption of
Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as
if made on such date fixed for redemption. If payment of
the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the
Property Trustee or by the Sponsor as guarantor pursuant to
the relevant Preferred Securities Guarantee or Common
Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the
actual date of payment, in which case the actual payment
date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
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(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the
Preferred Securities, the Depositary or its nominee (or any
successor Clearing Agency or its nominee) if the Global
Certificates have been issued or, if Definitive Preferred
Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the
Holder thereof.
(v) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws),
provided the acquiror is not the Holder of the Common
Securities or the obligor under the Indenture, the Sponsor
or any of its subsidiaries may at any time and from time to
time purchase outstanding Preferred Securities by tender, in
the open market or by private agreement.
5. VOTING RIGHTS -- PREFERRED SECURITIES.
(a) Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If (i) the Trust fails to pay Distributions in full on the Preferred
Securities for six (6) consecutive quarterly Distribution periods, or
(ii) an Event of Default occurs and is continuing (each of (i) and
(ii) being an "Appointment Event"), then the Holders of the Preferred
Securities, acting as a single class, will be entitled by the vote of
a Majority in liquidation amount of the Preferred Securities to
appoint a Special Regular Trustee in accordance with Section
5.6(a)(ii)(B) of the Declaration. Any Holder of Preferred Securities
(other than the Sponsor, or any Person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Sponsor) will be entitled to nominate any Person to
be appointed as Special Regular Trustee. For purposes of determining
whether the Trust has failed to make Distributions in full for six
(6) consecutive quarterly Distribution periods, Distributions shall
be deemed to remain in arrears, notwithstanding any payments in
respect thereof, until full cumulative Distributions have been or
contemporaneously are paid with respect to all quarterly Distribution
periods terminating on or prior to the date of payment of such
cumulative Distributions. Not later than 30 days after such right to
appoint a Special Regular Trustee arises, the Regular Trustees will
convene a meeting for the purpose of appointing a Special Regular
Trustee. If the Regular Trustees fail to convene such meeting within
such 30-day period, the Holders of 10% in liquidation amount of the
Preferred Securities will be entitled to convene such meeting in
accordance with Section 12.2 of the Declaration. The record date for
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such meeting will be the close of business on the Business Day that
is one Business Day before the day on which notice of the meeting is
sent to the Holders. The provisions of the Declaration relating to
the convening and conduct of the meetings of the Holders will apply
with respect to any such meeting.
A Special Regular Trustee may be removed without cause at any time by
vote of the Holders of a Majority in liquidation amount of the
Preferred Securities at a meeting of the Holders of the Preferred
Securities in accordance with Section 5.6(a)(ii)(B) of the
Declaration. The Holders of 10% in liquidation amount of the
Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.2 of the Declaration. The record date for
such meeting will be the close of business on the Business Day which
is one Business Day before the day on which the notice of meeting is
sent to Holders. Notwithstanding the appointment of a Special
Regular Trustee, the Debenture Issuer shall retain all rights under
the Indenture, including the right to extend the interest payment
period on the Debentures.
Subject to the requirements set forth in this paragraph, the Holders
of a majority in liquidation amount of the Preferred Securities,
voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Property
Trustee, or the exercise of any trust or power conferred upon the
Property Trustee under the Declaration as holder of the Debentures,
including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred on the Property Trustee with
respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 513 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable; provided,
however, that, where a consent under the Indenture would require the
consent of all Holders of Debentures affected thereby, the Property
Trustee may only give such consent at the direction of all holders
of the Preferred Securities. The Property Trustee shall not revoke
any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing
the time, method and place of conducting any remedy available to the
Property Trustee or the Debenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the
directions of the Holders of the
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Preferred Securities under this paragraph unless the Property Trustee
has obtained an opinion of tax counsel to the effect that, as a
result of such action, for the purposes of United States federal
income tax the Trust will not fail to be classified as a grantor
trust. If the Property Trustee fails to enforce its rights under the
Declaration, to the fullest extent permitted by law, any Holder of
Preferred Securities may, after such Holder's written request to the
Property Trustee to enforce such rights, institute a legal proceeding
directly against any Person to enforce the Property Trustee's rights
under the Declaration without first instituting a legal proceeding
against the Property Trustee or any other Person.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of
Preferred Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Preferred Securities. Each such
notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting
on which such Holders are entitled to vote or of such matter upon
which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or
to distribute the Debentures in accordance with the Declaration and
the terms of the Securities.
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 Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
6. VOTING RIGHTS -- COMMON SECURITIES.
(a) Except as provided under paragraphs 6(b), 6(c) and 7, and as
otherwise required by law and the Declaration, the Holders of the
Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace
any
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Trustee or to increase or decrease the number of Trustees, subject to the
exclusive right of the Holders of the Preferred Securities to appoint, remove or
replace a Special Regular Trustee.
(c) Subject to Section 2.6 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated, and subject to the requirements of
the second to last sentence of this paragraph, the Holders of a
Majority in liquidation amount of the Common Securities, voting
separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Property
Trustee, or the exercise of any trust or power conferred upon the
Property Trustee under the Declaration as holder of the Debentures,
including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred on the Property Trustee with
respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 513 of the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable; provided,
however, that, where a consent under the Indenture would require the
consent of all Holders of Debentures, the Property Trustee may
only give such consent at the direction of all Holders of the
Common Securities. Pursuant to this paragraph 6(c), the Property
Trustee shall not revoke any action previously authorized or approved
by a vote of the Holders of the Common Securities. Other than with
respect to directing the time, method and place of conducting any
remedy available to the Property Trustee or the Debenture Trustee as
set forth above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Property Trustee has
obtained an opinion of tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be
classified as an association taxable as a corporation or a
partnership and that each Holder of the Securities will be treated as
owning an undivided beneficial interest in the Debentures on account
of such action. If the Property Trustee fails to enforce its rights
under the Declaration, to the fullest extent permitted by law, any
Holder of Common Securities may, after such Holder's written request
to the Property Trustee to enforce such rights, institute a legal
proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a
legal proceeding against the Property Trustee or any other Person.
A-12
<PAGE>
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened
for such purpose, at a meeting of all of the Holders of Securities in
the Trust or pursuant to written consent. The Regular Trustees will
cause a notice of any meeting at which Holders of Common Securities
are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder
of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of proxies
or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the
terms of the Securities.
7. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides
for, or the Regular Trustees otherwise propose to effect, (i) any
action that would materially adversely affect the powers, preferences
or special rights of the Securities, whether by way of amendment to
the Declaration or otherwise, or (ii) the dissolution, winding-up or
termination of the Trust, other than as described in Section 8.1 of
the Declaration, then the Holders of outstanding Securities, voting
together as a class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such
amendment or proposal shall not be effective except with the approval
of the Holders of at least 66 2/3% in liquidation amount of the
Securities affected thereby; provided, however, that, the rights of
Holders of Preferred Securities under Article V of the Declaration to
appoint, remove or replace a Special Regular Trustee shall not be
amended without the consent of each Holder of Preferred Securities;
provided, further however, if any amendment or proposal referred to
in clause (i) above would materially adversely affect only the
Preferred Securities or the Common Securities, then only the affected
class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval
of 66 2/3% in liquidation amount of such class of securities.
(b) In the event the consent of the Property Trustee as the holder of the
Debentures and the Preferred Securities Guarantee is required under
the
A-13
<PAGE>
Indenture with respect to any amendment, modification or termination
of the Indenture, the Debentures or the Preferred Securities
Guarantee, the Property Trustee shall request the direction of the
Holders of the Securities with respect to such amendment,
modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority in
liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture
would require the consent of all Holders of the Debentures, the
Property Trustee may only give such consent at the direction of all
Holders of the Debentures ; provided, further, that the Property
Trustee shall not take any action in accordance with the directions
of the Holders of the Securities under this paragraph 7(b) unless the
Property Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust
will not be classified as other than a grantor trust.
8. PRO RATA.
A reference in these terms of the Securities to any payment, distribution or
treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Indenture has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
9. RANKING.
The Preferred Securities rank pari passu and payment thereon shall be made Pro
Rata with the Common Securities except that, where an Event of Default occurs
and is continuing under the Indenture in respect of the Debentures held by the
Property Trustee, the rights of Holders of the Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights to payment of the Holders of the Preferred
Securities.
A-14
<PAGE>
10. LISTING.
The Regular Trustees shall use their best efforts to cause the Preferred
Securities to be listed for quotation on the New York Stock Exchange Limited.
11. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE.
Each Holder of Preferred Securities and Common Securities, by the acceptance
thereof, agrees to the provisions of the Preferred Securities Guarantee and the
Common Securities Guarantee, respectively, including the subordination
provisions therein and to the provisions of the Indenture.
12. NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive rights to subscribe for
any additional securities.
13. MISCELLANEOUS.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration and the Preferred Securities
Guarantee and the Indenture to a Holder without charge on written request to the
Trust at its principal place of business.
These terms and the rights of the parties herewith shall be governed by and
interpreted in accordance with the laws of the State of Delaware and all rights
and remedies shall be governed by such laws without regard to principles of
conflict of laws.
A-15
<PAGE>
ANNEX I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE, INSERT: This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depository or by a nominee of the Depository to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized representative of
the Depositary (55 Water Street, New York) to the Trust or its agent for
registration of transfer, exchange or payment, and any Preferred Security issued
is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depositary and any payment hereon is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.]
Certificate Number Number of Preferred Securities
------------ ------------
CUSIP NO.
----------
Certificate Evidencing Preferred Securities
of
NWPS CAPITAL FINANCING III
Preferred Securities.
(liquidation amount $25 per Preferred Security)
NWPS CAPITAL FINANCING III, a business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that _______________ (the
"Holder") is the registered owner of ________________ preferred securities of
the Trust representing undivided beneficial interests in the assets of the
Trust designated the _____% Trust Preferred Capital 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.
A-16
<PAGE>
THE DESIGNATION, RIGHTS, PRIVILEGES, RESTRICTIONS (INCLUDING RESTRICTIONS ON
TRANSFER), PREFERENCES AND OTHER TERMS AND PROVISIONS OF THE PREFERRED
SECURITIES REPRESENTED HEREBY ARE ISSUED AND SHALL IN ALL RESPECTS BE SUBJECT
TO THE PROVISIONS OF THE AMENDED AND RESTATED DECLARATION OF TRUST OF THE
TRUST DATED AS OF ___________, 1995, AS THE SAME MAY BE AMENDED FROM TIME TO
TIME (THE "DECLARATION"), INCLUDING THE DESIGNATION OF THE TERMS OF THE
SECURITIES AS SET FORTH IN EXHIBIT A TO THE DECLARATION. Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Preferred
Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Preferred Securities Guarantee and
the Indenture to a Holder without charge upon written request to the Trust
at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration and is
entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income tax
purposes, the Debentures as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
__________, 199 .
NWPS Capital Financing I
By:
-------------------------------------
as Trustee
By:
-------------------------------------
as Trustee
A-17
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints
-------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
A-18
<PAGE>
ANNEX II
Certificate Number Number of Common Securities
------------ ------------
Certificate Evidencing Common Securities
of
NWPS CAPITAL FINANCING III
Common Securities.
(liquidation amount $25 per Common Security)
NWPS CAPITAL FINANCING III, a business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that ____________ (the
"Holder") is the registered owner of ________ common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the _____% Trust Common Capital Securities (liquidation amount $25
per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. THE DESIGNATION, RIGHTS, PRIVILEGES, RESTRICTIONS
(INCLUDING RESTRICTIONS ON TRANSFER), PREFERENCES AND OTHER TERMS AND
PROVISIONS OF THE COMMON SECURITIES REPRESENTED HEREBY ARE ISSUED AND SHALL
IN ALL RESPECTS BE SUBJECT TO THE PROVISIONS OF THE AMENDED AND RESTATED
DECLARATION OF TRUST OF THE TRUST DATED AS OF ___________, 1995, AS THE SAME
MAY BE AMENDED FROM TIME TO TIME (THE "DECLARATION"), INCLUDING THE
DESIGNATION OF THE TERMS OF THE SECURITIES AS SET FORTH IN EXHIBIT A TO THE
DECLARATION. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration.
The Holder is entitled to the benefits of the Common Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration,
the Common Securities Guarantee and the Indenture to a Holder without charge
upon written request to the Trust at its principal place of business.
A-19
<PAGE>
Upon receipt of this certificate, the Holder is bound by the Declaration and is
entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal income tax
purposes the Debentures as indebtedness and the Common Securities as evidence of
indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
___________, 199 .
NWPS Capital Financing I
By:
-------------------------------------
as Trustee
By:
-------------------------------------
as Trustee
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints
--------------
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
------------------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A-20
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE>
Ex. 4(a)(29)
FORM OF SUBORDINATED DEBT SECURITIES INDENTURE
BETWEEN NORTHWESTERN PUBLIC SERVICE COMPANY AND
THE CHASE MANHATTAN BANK (N.A.) AS TRUSTEE
<PAGE>
CROSS-REFERENCE TABLE FOR THE
SUBORDINATED DEBT SECURITIES INDENTURE
SECTION OF
TRUST INDENTURE
ACT OF 1939, AS AMENDED SECTION OF INDENTURE
- ----------------------- --------------------
SECTION 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 607
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 607
(a)(3) . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 608
SECTION 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 612
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 612
SECTION 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 701
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 701
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 701
SECTION 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 702
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 702
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 702
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 702
SECTION 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 703
(b) . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 601, 602
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 602
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 602
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 514
SECTION 316(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 104(d)
SECTION 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . .1003
SECTION 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 107
- -----------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
PAGE
----
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions of
General Application
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Amounts. . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent. . . . . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper. . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors. . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution. . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . 2
CEDEL S.A.. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Depositary . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities Guarantee . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request; Company Order. . . . . . . . . . . . . . . . . 3
Conversion Date . . . . . . . . . . . . . . . . . . . . . . . . 3
Conversion Event. . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office. . . . . . . . . . . . . . . . . . . . . 3
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . 4
Dollar; $ . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Dollar Equivalent of the Currency Unit. . . . . . . . . . . . . 4
Dollar Equivalent of the Foreign Currency . . . . . . . . . . . 4
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Election Date . . . . . . . . . . . . . . . . . . . . . . . . . 4
Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
European Communities. . . . . . . . . . . . . . . . . . . . . . 4
European Monetary System. . . . . . . . . . . . . . . . . . . . 4
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Date . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Rate Agent . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Rate Officer's Certificate . . . . . . . . . . . . . . 4
Federal Bankruptcy Code . . . . . . . . . . . . . . . . . . . . 5
- ------------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of this Indenture.
-i-
<PAGE>
PAGE
----
Foreign Currency. . . . . . . . . . . . . . . . . . . . . . . . 5
Government Obligations. . . . . . . . . . . . . . . . . . . . . 5
Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indexed Security. . . . . . . . . . . . . . . . . . . . . . . . 5
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . 6
Market Exchange Rate. . . . . . . . . . . . . . . . . . . . . . 6
Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
NWPS Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 6
Original Issue Discount Security. . . . . . . . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Place of Payment. . . . . . . . . . . . . . . . . . . . . . . . 8
Predecessor Security. . . . . . . . . . . . . . . . . . . . . . 8
Preferred Securities. . . . . . . . . . . . . . . . . . . . . . 8
Preferred Securities Guarantee. . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Price. . . . . . . . . . . . . . . . . . . . . . . . 8
Registered Security . . . . . . . . . . . . . . . . . . . . . . 8
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . 9
Repayment Date. . . . . . . . . . . . . . . . . . . . . . . . . 9
Repayment Price . . . . . . . . . . . . . . . . . . . . . . . . 9
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 9
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Security Register; Security Registrar . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . . . . . . . 9
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . 9
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . 9
Trust Securities. . . . . . . . . . . . . . . . . . . . . . . .10
Trust Securities Guarantees . . . . . . . . . . . . . . . . . .10
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
United States . . . . . . . . . . . . . . . . . . . . . . . . .10
United States Person. . . . . . . . . . . . . . . . . . . . . .10
Valuation Date. . . . . . . . . . . . . . . . . . . . . . . . .10
Vice President. . . . . . . . . . . . . . . . . . . . . . . . .10
Voting Stock. . . . . . . . . . . . . . . . . . . . . . . . . .10
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . . . . .10
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . . . . . . .11
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . .11
- -----------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
-ii-
<PAGE>
PAGE
----
SECTION 105. Notices, etc. to Trustee and Company. . . . . . . . . . . . . .13
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . .13
SECTION 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . .13
SECTION 108. Effect of Headings and Table of Contents. . . . . . . . . . . .14
SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . . . . . . .14
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . .14
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . .14
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 113. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . .14
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 202. Form of Trustee's Certificate of Authentication . . . . . . . .15
SECTION 203. Securities Issuable in Global Form. . . . . . . . . . . . . . .15
ARTICLE THREE
The Securities
SECTION 301. Amount Unlimited; Issuable in Series. . . . . . . . . . . . . .16
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 303. Execution, Authentication, Delivery and Dating. . . . . . . . .20
SECTION 304. Temporary Securities. . . . . . . . . . . . . . . . . . . . . .21
SECTION 305. Registration of Transfer and Exchange . . . . . . . . . . . . .23
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. . . . . . . .25
SECTION 307. Payment of Interest; Interest Rights Preserved;
Optional Interest Reset . . . . . . . . . . . . . . . . . . . .26
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . .28
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
-iii-
<PAGE>
PAGE
----
SECTION 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . .29
SECTION 311. Currency and Manner of Payments in Respect of
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 312. Appointment and Resignation of Successor Exchange
Rate Agent. . . . . . . . . . . . . . . . . . . . . . . . . . .32
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . .33
SECTION 402. Application of Trust Money. . . . . . . . . . . . . . . . . . .34
ARTICLE FIVE
Remedies
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . .35
SECTION 502. Acceleration of Maturity; Rescission and Annulment. . . . . . .36
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . .37
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . .38
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 506. Application of Money Collected. . . . . . . . . . . . . . . . .39
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . .39
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest. . . . . . . . . . . . . . . . . . . . . .40
SECTION 509. Restoration of Rights and Remedies. . . . . . . . . . . . . . .40
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . .41
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . .41
SECTION 512. Control by Holders. . . . . . . . . . . . . . . . . . . . . . .41
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
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<PAGE>
PAGE
----
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . .41
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . .42
SECTION 515. Waiver of Stay or Extension Laws. . . . . . . . . . . . . . . .42
ARTICLE SIX
The Trustee
SECTION 601. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . .42
SECTION 602. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . .43
SECTION 603. Trustee Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 604. May Hold Securities . . . . . . . . . . . . . . . . . . . . . .44
SECTION 605. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . .44
SECTION 606. Compensation and Reimbursement. . . . . . . . . . . . . . . . .44
SECTION 607. Corporate Trustee Required; Eligibility . . . . . . . . . . . .45
SECTION 608. Resignation and Removal; Appointment of Successor . . . . . . .45
SECTION 609. Acceptance of Appointment by Successor. . . . . . . . . . . . .47
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 611. Appointment of Authenticating Agent . . . . . . . . . . . . . .48
SECTION 612. Preferential Collection of Claims Against Company . . . . . . .50
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Disclosure of Names and Addresses of Holders. . . . . . . . . .50
SECTION 702. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . .50
SECTION 703. Reports by Company. . . . . . . . . . . . . . . . . . . . . . .50
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
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<PAGE>
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
PAGE
----
SECTION 801. Company May Consolidate, etc., Only on Certain
Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 802. Successor Person Substituted. . . . . . . . . . . . . . . . . .52
SECTION 803. Assignment of Rights. . . . . . . . . . . . . . . . . . . . . .52
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders. . . . . . .52
SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . .53
SECTION 903. Execution of Supplemental Indentures. . . . . . . . . . . . . .54
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . .54
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . .55
SECTION 906. Reference in Securities to Supplemental Indentures. . . . . . .55
SECTION 907. Notice of Supplemental Indentures . . . . . . . . . . . . . . .55
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium, if any, and Interest . . . . . .55
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . .55
SECTION 1003. Money for Securities Payments to Be Held in Trust . . . . . . .56
SECTION 1004. Statement as to Compliance. . . . . . . . . . . . . . . . . . .57
SECTION 1005. Additional Amounts. . . . . . . . . . . . . . . . . . . . . . .57
SECTION 1006. Payment of Taxes and Other Claims . . . . . . . . . . . . . . .58
SECTION 1007. Maintenance of Properties . . . . . . . . . . . . . . . . . . .58
SECTION 1008. Corporate Existence . . . . . . . . . . . . . . . . . . . . . .59
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
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<PAGE>
PAGE
----
SECTION 1009. Limitation on Dividends; Transactions with
Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 1010. Covenants as to NWPS Trusts . . . . . . . . . . . . . . . . . .60
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Applicability of Article. . . . . . . . . . . . . . . . . . . .60
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . .60
SECTION 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . .60
SECTION 1104. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . .61
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . .61
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . .62
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . .62
ARTICLE TWELVE
Sinking Funds
SECTION 1201. Applicability of Article. . . . . . . . . . . . . . . . . . . .62
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . .63
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . .63
ARTICLE THIRTEEN
Repayment at Option of Holders
SECTION 1301. Applicability of Article. . . . . . . . . . . . . . . . . . . .64
SECTION 1302. Repayment of Securities . . . . . . . . . . . . . . . . . . . .64
SECTION 1303. Exercise of Option. . . . . . . . . . . . . . . . . . . . . . .65
SECTION 1304. When Securities Presented for Repayment Become Due
and Payable . . . . . . . . . . . . . . . . . . . . . . . . . .65
SECTION 1305. Securities Repaid in Part . . . . . . . . . . . . . . . . . . .66
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
-vii-
<PAGE>
ARTICLE FOURTEEN
Defeasance and Covenant Defeasance
PAGE
----
SECTION 1401. Company's Option to Effect Defeasance or Covenant
Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . .66
SECTION 1402. Defeasance and Discharge. . . . . . . . . . . . . . . . . . . .66
SECTION 1403. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . .66
SECTION 1404. Conditions to Defeasance or Covenant Defeasance . . . . . . . .67
SECTION 1405. Deposited Money and Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions . . . . . . . . .69
SECTION 1406. Reinstatement.. . . . . . . . . . . . . . . . . . . . . . . . .69
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
SIGNATURES AND SEAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
-viii-
<PAGE>
FORM OF SUBORDINATED DEBT SECURITIES INDENTURE
BETWEEN NORTHWESTERN PUBLIC SERVICE COMPANY AND
THE CHASE MANHATTAN BANK (N.A.) AS TRUSTEE
INDENTURE, dated as of _____________ , 1995, between Northwestern Public Service
Company, a corporation duly organized and existing under the laws of the State
of Delaware (the "Company") having its principal office at 33 Third Street,
S.E., Huron, South Dakota 57350, and The Chase Manhattan Bank (N.A.), a
national banking association duly organized and existing under the laws of the
United States, as Trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of its unsecured debentures, notes or
other evidences of indebtedness (the "Securities"), to be issued in one or more
series as in this Indenture provided. This Indenture is subject to the
provisions of the Trust Indenture Act of 1939, as amended, that are required to
be part of this Indenture and shall, to the extent applicable, be governed by
such provisions. All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
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:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under
the Trust Indenture Act;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with United States generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted
<PAGE>
hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
(4) 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 Three, are defined in that Article.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Additional Amounts" has the meaning specified in Section 1005.
"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" of 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.
"Authenticating Agent" means any Person authorized by the Trustee pursuant to
Section 611 to act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper, in the English language or in an
official language of the country of publication, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in each place in connection with which the term is used or
in the financial community of each such place. Where successive publications
are required to be made in Authorized Newspapers, such publications may be made
in the same or in different newspapers in the same city meeting the foregoing
requirements and in each case on any Business Day.
"Board of Directors" means either the board of directors of the Company or any
duly authorized committee of such board.
"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 any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities pursuant to Section
301, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment or other location are
authorized or obligated by law or executive order to close.
"CEDEL S.A." means Cedel, S.A., or its successor.
-2-
<PAGE>
"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 execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
"Common Securities" means undivided beneficial interests in the assets of a
NWPS Trust which rank pari passu with Preferred Securities issued by such NWPS
Trust; provided, however, that upon the occurrence of an Event of Default, the
rights of holders of Common Securities to payment in respect to distributions
and payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Common Securities Guarantee" means any Guarantee that the Company enters into
that operates directly or indirectly for the benefit of holders of Common
Securities of a NWPS Trust.
"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 request or order signed in
the name of the Company by its Chairman, its President, any Vice President, its
Treasurer or an Assistant Treasurer, and delivered to the Trustee.
"Conversion Date" has the meaning specified in Section 312(d).
"Conversion Event" means the cessation of use of (i) a Foreign Currency both by
the government of the country which issued such Currency and by a central bank
or other public institution of or within the international banking community for
the settlement of transactions, (ii) the ECU both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Communities or (iii) any currency unit (or composite
currency) other than the ECU for the purposes for which it was established.
"Corporate Trust Office" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office on the date of execution of this Indenture is located
at 4 Chase MetroTech Center, Brooklyn, New York 11245, except that with respect
to presentation of Securities for payment or for registration of transfer or
exchange, such term shall mean the office or agency of the Trustee at which, at
any particular time, its corporate agency business shall be conducted.
"Corporation" includes corporations, associations, companies and business
trusts.
"Currency" means any currency or currencies, composite currency or currency unit
or currency units, including, without limitation, the ECU, issued by the
government of one or more countries or by any recognized confederation or
association of such governments.
-3-
<PAGE>
"Debt" means notes, bonds, debentures or other similar evidences of indebtedness
for money borrowed.
"Declaration" means, in respect of a NWPS Trust, the amended and restated
declaration of trust of such NWPS Trust or any other governing instrument of
such NWPS Trust.
"Default" means any event which is, or after notice or passage of time or both
would be, an Event of Default.
"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 of America as at the time shall be legal tender for the
payment of public and private debts.
"Dollar Equivalent of the Currency Unit" has the meaning specified in Section
312(g).
"Dollar Equivalent of the Foreign Currency" has the meaning specified in Section
312(f).
"ECU" means the European Currency Unit as defined and revised from time to time
by the Council of the European Communities.
"Election Date" has the meaning specified in Section 312(h).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels Office, or
its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the European Coal
and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System established by the
Resolution of December 5, 1978 of the Council of the European Communities.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
"Exchange Rate Agent" means, with respect to Securities of or within any series,
unless otherwise specified with respect to any Securities pursuant to Section
301, a New York Clearing House bank, designated pursuant to Section 301 or
Section 313.
"Exchange Rate Officer's Certificate" means a tested telex or a certificate
setting forth (i) the applicable Market Exchange Rate and (ii) the Dollar or
Foreign Currency amounts of principal (and premium, if any) and interest, if any
(on an aggregate basis and on the basis of a Security having the lowest
denomination principal amount determined in accordance with Section 302 in the
relevant Currency), payable with respect to a Security of any series on the
basis of such
-4-
<PAGE>
Market Exchange Rate, sent (in the case of a telex) or signed (in the case of a
certificate) by the Treasurer, any Vice President or any Assistant Treasurer of
the Company.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the United
States Code, as amended from time to time.
"Foreign Currency" means any Currency other than Currency of the United States.
"Government Obligations" means, unless otherwise specified with respect to any
series of Securities pursuant to Section 301, securities which are (i) direct
obligations of the government which issued the Currency in which the Securities
of a particular series are payable or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the government which
issued the Currency in which the Securities of such series are payable, the
payment of which is unconditionally guaranteed by such government, which, in
either case, are full faith and credit obligations of such government payable in
such Currency and are not callable or redeemable at the option of the issuer
thereof and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of a depository receipt;
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest or principal of the Government
Obligation evidenced by such depository receipt.
"Guarantor" means Northwestern Public Service Company, a Delaware corporation.
"Holder" means, in the case of a Registered Security, the Person in whose name a
Security is registered in the Security Register.
"Indenture" means this instrument as originally executed 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 particular series of Securities established as contemplated by Section
301; provided, however, that, if at any time more than one Person is acting as
Trustee under this instrument, "Indenture" shall mean, with respect to any one
or more series of Securities for which such Person is Trustee, this instrument
as originally executed or 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 particular series of
Securities for which such Person is Trustee established as contemplated by
Section 301, exclusive, however, of any provisions or terms which relate solely
to other series of Securities for which such Person is not Trustee, regardless
of when such terms or provisions were adopted, and exclusive of any provisions
or terms adopted by means of one or more indentures supplemental hereto executed
and delivered after such Person had become such Trustee but to which such
Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
-5-
<PAGE>
"Interest", when used with respect to an Original Issue Discount Security which
by its terms bears interest only after Maturity, means interest payable after
Maturity at the rate prescribed in such Original Issue Discount Security.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Market Exchange Rate" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, (i) for any conversion involving a currency
unit on the one hand and Dollars or any Foreign Currency on the other, the
exchange rate between the relevant currency unit and Dollars or such Foreign
Currency calculated by the method specified pursuant to Section 301 for the
Securities of the relevant series, (ii) for any conversion of Dollars into any
Foreign Currency, the noon (New York City time) buying rate for such Foreign
Currency for cable transfers quoted in New York City as certified for customs
purposes by the Federal Reserve Bank of New York and (iii) for any conversion of
one Foreign Currency into Dollars or another Foreign Currency, the spot rate at
noon local time in the relevant market at which, in accordance with normal
banking procedures, the Dollars or Foreign Currency into which conversion is
being made could be purchased with the Foreign Currency from which conversion is
being made from major banks located in either New York City, London or any other
principal market for Dollars or such purchased Foreign Currency, in each case
determined by the Exchange Rate Agent. Unless otherwise specified with respect
to any Securities pursuant to Section 301, in the event of the unavailability of
any of the exchange rates provided for in the foregoing clauses (i), (ii) and
(iii), the Exchange Rate Agent shall use, in its sole discretion and without
liability on its part, such quotation of the Federal Reserve Bank of New York as
of the most recent available date, or quotations from one or more major banks in
New York City, London or another principal market for the Currency in question,
or such other quotations as the Exchange Rate Agent shall deem appropriate.
Unless otherwise specified by the Exchange Rate Agent, if there is more than one
market for dealing in any Currency by reason of foreign exchange regulations or
otherwise, the market to be used in respect of such Currency shall be that upon
which a non-resident issuer of securities designated in such Currency would
purchase such Currency in order to make payments in respect of such securities.
"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 therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"NWPS Trust" means each of NWPS Capital Financing I, NWPS Capital Financing II,
NWPS Capital Financing III, each a Delaware statutory business trust.
"Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel for
the Company, including an employee of the Company.
-6-
<PAGE>
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption or
repayment at the option of the Holder money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities and any coupons appertaining thereto;
provided that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1402 and
1403, with respect to which the Company has effected defeasance
and/or covenant defeasance as provided in Article Fourteen; and
(iv) Securities which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined as of the date such Security is originally
issued by the Company as set forth in an Exchange Rate Officer's Certificate
delivered to the Trustee, of the principal amount (or, in the case of an
Original Issue Discount Security, the Dollar equivalent as of such date of
original issuance of the amount determined as provided in clause (i) above), of
such Security, (iii) the principal amount of any Indexed Security that may be
counted in making such determination or calculation and that shall be deemed
outstanding for such purpose shall be equal to the principal
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face amount of such Indexed Security at original issuance, unless otherwise
provided with respect to such Security pursuant to Section 301, and (iv)
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in making such calculation or in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
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 such other obligor.
"Paying Agent" means any Person (including the Company acting as Paying Agent)
authorized by the Company to pay the principal of (or premium, if any, on) or
interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means, when used with respect to the Securities of or within
any series, the place or places where the principal of (and premium, if any, on)
and interest on such Securities are payable as specified as contemplated by
Sections 301 and 1002.
"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 evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Securities" means undivided beneficial interests in the assets of a
NWPS Trust which rank pari passu with Common Securities issued by such NWPS
Trust; provided, however, that upon the occurrence of an Event of Default, the
rights of holders of Common Securities to payment in respect of distributions
and payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any Guarantee that the Guarantor may
enter into with Wilmington Trust Company, as trustee of a NWPS Trust, or other
Persons, that operate directly or indirectly for the benefit of holders of
Preferred Securities of such NWPS Capital Trust.
"Redemption Date", when used with respect to any Security to be redeemed, in
whole or in part, 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.
"Registered Security" means any Security registered in the Security Register.
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"Regular Record Date" for the interest payable on any Interest Payment Date on
the Registered Securities of or within any series means the date specified for
that purpose as contemplated by Section 301.
"Repayment Date" means, when used with respect to any Security to be repaid at
the option of the Holder, the date fixed for such repayment pursuant to this
Indenture.
"Repayment Price" means, when used with respect to any Security to be repaid at
the option of the Holder, the price at which it is to be repaid pursuant to this
Indenture.
"Responsible Officer", when used with respect to the Trustee, means the chairman
or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, or any vice president, secretary, any
assistant secretary, treasurer, any assistant treasurer, cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
assistant controller within the corporate trust administration division or any
other officer of the 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 his knowledge of and familiarity with the particular
subject.
"Securities" has the meaning stated in the first recital of this Indenture and
more particularly means any Securities authenticated and delivered under this
Indenture; provided, however, that if at any time there is more than one Person
acting as Trustee under this Indenture, "Securities" with respect to the
Indenture as to which such Person is Trustee shall have the meaning stated in
the first recital of this Indenture and shall more particularly mean Securities
authenticated and delivered under this Indenture, exclusive, however, of
Securities of any series as to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any installment of
principal thereof or interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment of
principal or interest is due and payable, as such date may be extended pursuant
to the provisions of Section 308.
"Subsidiary" means any corporation of which at the time of determination the
Company, directly and/or indirectly through one or more Subsidiaries, owns 50%
or more of the shares of Voting Stock.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in force
at the date as of which this Indenture was executed, except as provided in
Section 905.
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"Trust Securities" means Common Securities and Preferred Securities.
"Trust Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this
Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder; provided, however, that if
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean only the Trustee with respect to
Securities of that series.
"United States" means, unless otherwise specified with respect to any Securities
pursuant to Section 301, the United States of America (including the states and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, an individual who 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 an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source.
"Valuation Date" has the meaning specified in Section 312(c).
"Vice President", when used with respect to the Company or the Trustee, means
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president".
"Voting Stock" means stock of the class or classes having general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of a corporation (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
"Yield to Maturity" means the yield to maturity, computed at the time of
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the Trustee
an Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture (including any covenant compliance with which constitutes
a condition precedent) relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically
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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 covenant or
condition provided for in this Indenture (other than pursuant to Section 1004)
shall include: (1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto; (2) 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; (3) a statement that, in the opinion of each
such individual, he has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and (4) a statement as to whether, in the
opinion of each such individual, such covenant or condition 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 his certificate or opinion is 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.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by
Holders of the Outstanding Securities of all series or one or more
series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders
in person or by agents duly appointed in writing. Except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where
it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. 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
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for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this
Section.
(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. 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 authority. The
fact and date of the execution of any such instrument or writing, or
the authority of the Person executing the same, may also be proved in
any other manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Registered Securities held
by any Person, and the date of holding the same, shall be proved by
the Security Register.
(d) If the Company shall solicit from the Holders of Registered Securities
any request, demand, authorization, direction, notice, consent, waiver
or other Act, the Company may, at its option, by or pursuant to a
Board Resolution, 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. Notwithstanding TIA Section 316(c), such
record date shall be the record date specified in or pursuant to such
Board Resolution, which shall be a date not earlier than the date
thirty (30) days prior to the first solicitation of Holders generally
in connection therewith and not later than the date such solicitation
is completed. 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 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 such record date;
provided that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not
later than eleven months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security 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.
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SECTION 105. Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other documents provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by
the Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Administration Division, or (2) 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 mailed,
first-class postage prepaid, to the Company addressed to it at the address of
its principal office specified in the first paragraph of this Indenture or at
any other address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders of Registered
Securities by the Company or the Trustee, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each such Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders of Registered Securities 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 of Registered Securities. Any notice mailed to a
Holder in the manner herein prescribed shall be conclusively deemed to have been
received by such Holder, whether or not such Holder actually receives such
notice. In case, by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impractical to mail
notice of any event to Holders of Registered Securities when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be sufficient giving of such notice for every purpose hereunder. Any
request, demand, authorization, direction, notice, consent or waiver required or
permitted under this Indenture shall be in the English language, except that any
published notice may be in an official language of the country of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, 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 hereof limits, qualifies or conflicts with a provision of the
Trust Indenture Act that is required under such Act to be a part of and govern
this Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
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SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in any Security or coupon 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 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give
to any Person, other than the parties hereto, any Authenticating Agent, any
Paying Agent, any Securities Registrar and their successors hereunder and the
Holders of Securities, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 112. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. THIS INDENTURE IS SUBJECT TO
THE PROVISIONS OF THE TRUST INDENTURE ACT OF 1939, AS AMENDED, THAT ARE REQUIRED
TO BE PART OF THIS INDENTURE AND SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED BY
SUCH PROVISIONS.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated Maturity
or 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 any Security
other than a provision in the Securities of any 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 with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity or Maturity; provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date, Stated Maturity or Maturity, as the case may be.
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ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series shall be in substantially the
form as shall be established by or pursuant to a Board Resolution or in one or
more indentures supplemental hereto, 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.
If the forms of Securities of any series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
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. Any portion of the text of any Security may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the
Security. The Trustee's certificate of authentication on all Securities shall
be in substantially the form set forth in this Article. The definitive
Securities shall be printed, lithographed or engraved on steel-engraved borders
or may be produced in any other manner, all as determined by the officers of the
Company executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
The Chase Manhattan Bank (N.A.),
as Trustee
By:
Authorized Officer
SECTION 203. Securities Issuable in Global Form.
If Securities of or within a series are issuable in global form, as specified as
contemplated by Section 301, then, notwithstanding clause (10) of Section 301,
any such Security shall represent such of the Outstanding Securities of such
series as shall be specified therein and may provide that it shall represent the
aggregate amount of Outstanding Securities of such series from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities of such
series represented thereby may from time to time be increased or decreased to
reflect exchanges. Any endorsement of a Security in global form to reflect the
amount, or any increase or decrease in the amount, of Outstanding Securities
represented thereby shall be made by the Trustee in such manner and upon
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instructions given by such Person or Persons as shall be specified therein or in
the Company Order to be delivered to the Trustee pursuant to Section 303 or
Section 304. Subject to the provisions of Section 303 and, if applicable,
Section 304, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 303 or Section 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but need
not comply with Section 102 and need not be accompanied by an Opinion of
Counsel. The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303. Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein. Notwithstanding the provisions of
Section 309 and except as provided in the preceding paragraph, the Company, the
Trustee and any agent of the Company and the Trustee shall treat as the Holder
of such principal amount of Outstanding Securities represented by a permanent
global Security in the case of a permanent global Security in registered form,
the Holder of such permanent global Security in registered form.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited. The Securities may be issued in one
or more series. There shall be established in one or more Board Resolutions or
pursuant to authority granted by one or more Board Resolutions and, subject to
Section 303, set forth in, or determined in the manner provided in, an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series, any or all of the following, as
applicable (each of which (except for the matters set forth in clauses (1), (2)
and (19) below), if so provided, may be determined from time to time by the
Company with respect to unissued Securities of the series and set forth in such
Securities of the series when issued from time to time):
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities of the
series that 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
the series pursuant to Section 304, 305, 306, 906, 1107 or 1305);
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(3) the date or dates, or the method by which such date or dates will be
determined or extended, on which the principal of the Securities of
the series is payable;
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue,
or the method by which such date or dates shall be determined, the
Interest Payment Dates on which such interest shall be payable and the
Regular Record Date, if any, for the interest payable on any
Registered Security on any Interest Payment Date, or the method by
which such date or dates shall be determined, and the basis upon which
interest shall be calculated if other than on the basis of a 360-day
year of twelve 30-day months;
(5) the rights, if any, to defer payments of interest on the Securities by
extending the interest payment periods and the duration of such
extension;
(6) the security and subordination terms of the Securities of the series;
(7) the place or places, if any, other than or in addition to The City of
New York, where the principal of (and premium, if any, on) and any
interest on Securities of the series shall be payable, any Registered
Securities of the series may be surrendered for registration of
transfer, Securities of the series may be surrendered for exchange
and, if different than the location specified in Section 106, the
place or places where notices or demands to or upon the Company in
respect of the Securities of the series and this Indenture may be
served;
(8) the period or periods within which, the price or prices at which, the
Currency in which, and other terms and conditions upon which
Securities of the series may be redeemed, in whole or in part, at the
option of the Company, if the Company is to have that option;
(9) the obligation, if any, of the Company to redeem, repay or purchase
Securities of the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or
periods within which, the price or prices at which, the Currency in
which, and other terms and conditions upon which Securities of the
series shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;
(10) if other than denominations of $25 and any integral multiple thereof,
the denomination or denominations in which any Registered Securities
of the series shall be issuable;
(11) if other than the Trustee, the identity of each Security Registrar
and/or Paying Agent;
(12) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable
upon declaration of acceleration of the
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Maturity thereof pursuant to Section 502 or the method by which such
portion shall be determined;
(13) if other than Dollars, the Currency in which payment of the principal
of (and premium, if any, on) or interest, if any, on the Securities of
the series shall be payable or in which the Securities of the series
shall be denominated and the particular provisions applicable thereto
in accordance with, in addition to or in lieu of any of the provisions
of Section 312;
(14) whether the amount of payments of principal of (and premium, if any,
on) or interest on the Securities of the series may be determined with
reference to an index, formula or other method (which index, formula
or method may be based, without limitation, on one or more Currencies,
commodities, equity indices or other indices), and the manner in which
such amounts shall be determined;
(15) whether the principal of (and premium, if any, on) and interest, if
any, on the Securities of the series are to be payable, at the
election of the Company or a Holder thereof, in a Currency other than
that in which such Securities are denominated or stated to be payable,
the period or periods within which (including the Election Date), and
the terms and conditions upon which, such election may be made, and
the time and manner of determining the exchange rate between the
Currency in which such Securities are denominated or stated to be
payable and the Currency in which such Securities are to be so
payable, in each case in accordance with, in addition to or in lieu of
any of the provisions of Section 312;
(16) the designation of the initial Exchange Rate Agent, if any;
(17) any provisions in modification of, in addition to or in lieu of the
provisions of Article Fourteen that shall be applicable to the
Securities of the series;
(18) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(19) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company with respect to Securities of the
series, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
(20) whether any Securities of the series are to be issuable initially in
temporary global form and whether any Securities of the series are to
be issuable in permanent global form and, if so, whether beneficial
owners of interests in any such permanent global Security may exchange
such interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in
Section 305, and if Securities of the series are to be issuable in
global form, the identity of any initial depository therefor;
provided, that, unless otherwise provided, Securities shall be issued
as Registered Securities;
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(21) the date as of which and any temporary global Security representing
Outstanding Securities of the series shall be dated if other than the
date of original issuance of the first Security of the series to be
issued;
(22) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than 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
the extent to which, or the manner in which, any interest payable on a
temporary global Security on an Interest Payment Date will be paid if
other than in the manner provided in Section 304;
(23) if Securities of the series are to be issuable in definitive form
(whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, the form and/or terms
of such certificates, documents or conditions;
(24) whether and under what circumstances the Company will pay Additional
Amounts as contemplated by Section 1005 on the Securities of the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax,
assessment or governmental charge and, if so, whether the Company will
have the option to redeem such Securities rather than pay such
Additional Amounts (and the terms of any such option);
(25) if the Securities of the series are to be convertible into or
exchangeable for any securities of any Person (including the Company),
the terms and conditions upon which such Securities will be so
convertible or exchangeable; and
(26) any other terms, conditions, rights and preferences (or limitations on
such rights and preferences) relating to the series (which terms shall
not be inconsistent with the requirements of the Trust Indenture Act
or the provisions of this Indenture). All Securities of any one
series shall be substantially identical except as to denomination and
except as may otherwise be provided in or pursuant to such Board
Resolution (subject to Section 303) and set forth in such Officers'
Certificate or in any such indenture supplemental hereto. Not all
Securities of any one series need be issued at the same time, and,
unless otherwise provided, a series may be reopened for issuances of
additional Securities of such series. If any of the terms of the
series are established by action taken pursuant to one or more Board
Resolutions, a copy of an appropriate record of such action(s) shall
be certified by the Secretary or an Assistant Secretary of the Company
and such Board Resolutions shall be delivered to the Trustee at or
prior to the delivery of the Officers' Certificate setting forth the
terms of the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in such denominations as shall
be specified as contemplated by Section 301. With respect to Securities of any
series denominated in Dollars, in the absence of any such provisions, the
Registered Securities of such series, other than Registered
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Securities issued in global form (which may be of any denomination), shall be
issuable in denominations of $25 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman, its
President or a Vice President, under its corporate seal reproduced thereon
attested by its Secretary or an Assistant Secretary. The signature of any of
these officers on the Securities may be the manual or facsimile signatures of
the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals who were at
any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities. If not
all the Securities of any series are to be issued at one time and if the Board
Resolution or supplemental indenture establishing such series shall so permit,
such Company Order may set forth procedures acceptable to the Trustee for the
issuance of such Securities and determining terms of particular Securities of
such series such as interest rate, maturity date, date of issuance and date from
which interest shall accrue.
In authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Sections 315(a) through 315(d)) shall
be fully protected in relying upon, an Opinion of Counsel stating:
(a) that the form or forms of such Securities have been established in
conformity with the provisions of this Indenture;
(b) that the terms of such Securities have been established in conformity
with the provisions of this Indenture;
(c) that such Securities, when completed by appropriate insertions and
executed and delivered by the Company to the Trustee for
authentication in accordance with this Indenture, authenticated and
delivered by the Trustee in accordance with this Indenture and issued
by the Company in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute the legal, valid and
binding obligations of the Company, enforceable in accordance with
their terms, subject to applicable bankruptcy, insolvency,
reorganization and other similar laws of general applicability
relating to or affecting the enforcement of creditors' rights, to
general equitable principles and to such other customary
qualifications;
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(d) that all laws and requirements in respect of the execution and
delivery by the Company of such Securities, and of the supplemental
indentures, if any, have been complied with and that authentication
and delivery of such Securities and the execution and delivery of the
supplemental indenture, if any, by the Trustee will not violate the
terms of the Indenture;
(e) that the Company has the corporate power to issue such Securities, and
has duly taken all necessary corporate action with respect to such
issuance; and
(f) that the issuance of such Securities will not contravene the articles
of incorporation or by-laws of the Company or result in any violation
of any of the terms or provisions of any law or regulation or of any
indenture, mortgage or other agreement known to such Counsel by which
the Company is bound.
Notwithstanding the provisions of Section 301 and of the preceding two
paragraphs, if not all the Securities of any series are to be issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to the preceding two paragraphs prior to or at the
time of issuance of each Security, but such documents shall be delivered prior
to or at the time of issuance of the first Security of such series.
The Trustee shall not be required to authenticate and deliver any such
Securities if the issue of such Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee. Each Registered Security shall be dated the date of its
authentication.
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 duly executed by
the Trustee by manual signature of an authorized officer, 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 but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 310 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 of this Indenture.
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, in
registered form, and with such appropriate insertions, omissions, substitutions
and other variations as the
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officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities. Such temporary Securities may be in global
form.
Except in the case of temporary Securities in global form (which shall be
exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series, upon
surrender of the temporary securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series, the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Securities of the
same series of authorized denominations. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series.
If temporary Securities of any series are issued in global form, any such
temporary global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euroclear and CEDEL S.A., for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date specified in,
or determined pursuant to the terms of, any such temporary global Security (the
"Exchange Date"), the Company shall deliver to the Trustee definitive
Securities, in aggregate principal amount equal to the principal amount of such
temporary global Security, executed by the Company. On or after the Exchange
Date such temporary global Security shall be surrendered by the Common
Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in registered form or permanent global
registered form, or any combination thereof, as specified as contemplated by
Section 301, and, if any combination thereof is so specified, as requested by
the beneficial owner thereof; provided, however, that, unless otherwise
specified in such temporary global Security, upon such presentation by the
Common Depositary, such temporary global Security is accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by Euroclear
as to the portion of such temporary global Security held for its account then to
be exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by CEDEL S.A. as to the portion of such temporary global Security held
for its account then to be exchanged, each in such other form as may be
established pursuant to Section 301.
Unless otherwise specified in such temporary global Security, the interest of a
beneficial owner of Securities of a series in a temporary global Security shall
be exchanged for definitive Securities of the same series and of like tenor
following the Exchange Date when the account holder instructs Euroclear or CEDEL
S.A., as the case may be, to request such exchange on his behalf and delivers to
Euroclear or CEDEL S.A., as the case may be, a certificate in
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such form as may be established pursuant to Section 301, dated no earlier than
15 days prior to the Exchange Date, copies of which certificate shall be
available from the offices of Euroclear and CEDEL S.A., the Trustee, any
Authenticating Agent appointed for such series of Securities and each Paying
Agent. Unless otherwise specified in such temporary global Security, any such
exchange shall be made free of charge to the beneficial owners of such temporary
global Security, except that a Person receiving definitive Securities must bear
the cost of insurance, postage, transportation and the like in the event that
such Person does not take delivery of such definitive Securities in person at
the offices of Euroclear or CEDEL S.A.
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, except that, unless otherwise specified
as contemplated by Section 301, interest payable on a temporary global Security
on an Interest Payment Date for Securities of such series occurring prior to the
applicable Exchange Date shall be payable to Euroclear and CEDEL S.A. on such
Interest Payment Date upon delivery by Euroclear and CEDEL S.A. to the Trustee
of a certificate or certificates in such form as may be established pursuant
to Section 301, for credit without further interest on or after such Interest
Payment Date to the respective accounts of the Persons who are the beneficial
owners of such temporary global Security on such Interest Payment Date and who
have each delivered to Euroclear or CEDEL S.A., as the case may be, a
certificate dated no earlier than 15 days prior to the Interest Payment Date
occurring prior to such Exchange Date in such form as may be established
pursuant to Section 301. Notwithstanding anything to the contrary herein
contained, the certifications made pursuant to this paragraph shall satisfy the
certification requirements of the preceding two paragraphs of this Section and
of the third paragraph of Section 303 of this Indenture and the interests of the
Persons who are the beneficial owners of the temporary global Security with
respect to which such certification was made will be exchanged for definitive
Securities of the same series and of like tenor on the Exchange Date or the date
of certification if such date occurs after the Exchange Date, without further
act or deed by such beneficial owners. Except as otherwise provided in this
paragraph, no payments or principal or interest owing with respect to a
beneficial interest in a temporary global Security will be made unless and until
such interest in such temporary global Security shall have been exchanged for an
interest in a definitive Security. Any interest so received by Euroclear and
CEDEL S.A. and not paid as herein provided shall be returned to the Trustee
immediately prior to the expiration of two years after such Interest Payment
Date in order to be repaid to the Company in accordance with Section 1003.
SECTION 305. Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee
a register for each series of Securities (the registers maintained in the
Corporate Trust Office of the Trustee and in any other office or agency of the
Company in a Place of Payment being herein sometimes 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 Registered
Securities and of transfers of Registered Securities. The Security Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. At all reasonable times, the Security
Register shall be open to inspection by the Trustee. The Trustee is hereby
initially
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appointed as security registrar (the "Security Registrar") for the purpose of
registering Registered Securities and transfers of Registered Securities as
herein provided.
Upon surrender for registration of transfer of any Registered Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee, one or more new Registered Securities of the
same series, of any authorized denominations and of a like aggregate principal
amount and tenor.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series, of any authorized
denomination and of a like aggregate principal amount, upon surrender of the
Registered Securities to be exchanged at such office or agency. Whenever any
Registered Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Registered
Securities which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as contemplated by
Section 301, any permanent global Security shall be exchangeable only as
provided in this paragraph. If any beneficial owner of an interest in a
permanent global Security is entitled to exchange such interest for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified as contemplated by Section 301 and provided that
any applicable notice provided in the permanent global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
deliver to the Trustee definitive Securities in aggregate principal amount equal
to the principal amount of such beneficial owner's interest in such permanent
global Security, executed by the Company. On or after the earliest date on
which such interests may be so exchanged, such permanent global Security shall
be surrendered by the Common Depositary or such other depositary as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose, to be exchanged, in whole or from time to time
in part, for definitive Securities without charge, and the Trustee shall
authenticate and deliver, in exchange for each portion of such permanent global
Security, an equal aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of such
permanent global Security to be exchanged which shall be in the form of
Registered Securities; provided, however, that no such exchanges may occur
during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption. If a Registered Security is issued in exchange for any portion
of a permanent global Security after the close of business at the office or
agency where such exchange occurs on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Registered Security, but will be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with the provisions of this Indenture.
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All Securities issued upon any registration of transfer or exchange of
Securities shall be the 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 Registered Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Security Registrar)
be duly endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
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, 906, 1107 or 1305 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the selection for redemption of Securities of
that series under Section 1103 or 1203 and ending at the close of business on
the date of the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part, or (iii) to issue, register the transfer of or exchange
any Security which has been surrendered for repayment at the option of the
Holder, except the portion, if any, of such Security not to be so repaid.
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, or, in case any such
mutilated 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.
If there shall be delivered to the Company and to the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be 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 has been acquired by a bona fide
purchaser, the Company shall execute and upon Company Order 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, or, in case any
such 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 government charge that may be imposed in relation thereto and any other
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
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or not the destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that 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; Optional Interest
Reset.
(a) Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Registered 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 such Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 1002; provided, however, that each
installment of interest on any Registered Security may at the Company's option
be paid by (i) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 309, to the address of
such Person as it appears on the Security Register or (ii) transfer to an
account maintained by the payee located in the United States.
Any interest on any Registered Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such defaulted interest and, if
applicable, interest on such defaulted interest (to the extent lawful) at the
rate specified in the Securities of such series (such defaulted interest and, if
applicable, interest thereon herein collectively called "Defaulted Interest")
may be paid by the Company, at its election in each case, as provided in clause
(1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities of such
series (or their respective Predecessor Securities) are
registered at the close of business on 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 Registered 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 in the Currency in which the
Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such
series and except, if applicable, as provided in Sections 312(b),
312(d) and 312(e)) 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
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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 cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor to be given in the manner provided in Section 106, not
less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted
Interest shall be paid to the Persons in whose name the
Registered Securities of such series (or their respective
Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Registered 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.
(b) The provisions of this Section 307(b) may be made applicable to any
series of Securities pursuant to Section 301 (with such modifications,
additions or substitutions as may be specified pursuant to such
Section 301). The interest rate (or the spread or spread multiplier
used to calculate such interest rate, if applicable) on any Security
of such series may be reset by the Company on the date or dates
specified on the face of such Security (each an "Optional Reset
Date"). The Company may exercise such option with respect to such
Security by notifying the Trustee of such exercise at least 50 but not
more than 60 days prior to an Optional Reset Date for such Note. Not
later than 40 days prior to each Optional Reset Date, the Trustee
shall transmit, in the manner provided for in Section 106, to the
Holder of any such Security a notice (the "Reset Notice") indicating
whether the Company has elected to reset the interest rate (or the
spread or spread multiplier used to calculate such interest rate, if
applicable), and if so (i) such new interest rate (or such new spread
or spread multiplier, if applicable) and (ii) the provisions, if any,
for redemption during the period from such Optional Reset Date to the
next Optional Reset Date or if there is no such next Optional Reset
Date, to the Stated Maturity Date of such Security (each such period a
"Subsequent Interest Period"), including the date or dates on which or
the period or periods during which and the price or prices at which
such redemption may occur during the Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 days prior to the Optional
Reset Date, the Company may, at its option, revoke the interest rate (or the
spread or spread multiplier used to calculate such interest rate, if applicable)
provided for in the Reset Notice and establish an interest rate (or a spread or
spread multiplier used to calculate such interest rate, if applicable) that is
higher than the interest rate (or the spread or spread multiplier, if
applicable) provided for in the
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Reset Notice, for the Subsequent Interest Period by causing the Trustee
to transmit, in the manner provided for in Section 106, notice of such higher
interest rate (or such higher spread or spread multiplier, if applicable) to the
Holder of such Security. Such notice shall be irrevocable. All Securities with
respect to which the interest rate (or the spread or spread multiplier used to
calculate such interest rate, if applicable) is reset on an Optional Reset Date,
and with respect to which the Holders of such Securities have not tendered such
Securities for repayment (or have validly revoked any such tender) pursuant to
the next succeeding paragraph, will bear such higher interest rate (or such
higher spread or spread multiplier, if applicable).
The Holder of any such Security will have the option to elect repayment by the
Company of the principal of such Security on each Optional Reset Date at a price
equal to the principal amount thereof plus interest accrued to such Optional
Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder
must follow the procedures set forth in Article Thirteen for repayment at the
Option of Holders except that the period for delivery or notification to the
Trustee shall be at least 25 but not more than 35 days prior to such Optional
Reset Date and except that, if the Holder has tendered any Security for
repayment pursuant to the Reset Notice, the Holder may, by written notice to the
Trustee, revoke such tender or repayment until the close of business on the
tenth day before such Optional Reset Date.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered 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 Registered Security is registered as the owner of
such Registered Security for the purpose of receiving payment of principal of
(and premium, if any, on) and (subject to Sections 305 and 307) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and none of the Company, the Trustee or any agent of the Company or the
Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security Registrar
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of a Security
in global form or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with respect to such
global Security or impair, as between such depositary and owners of beneficial
interests in such global Security, the operation of customary practices
governing the exercise of the rights of such depositary (or its nominee) as
Holder of such global Security.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, repayment at the option of
the Holder, registration of transfer or exchange or for credit against any
current or future sinking fund payment shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee. All Securities so delivered to
the Trustee shall be promptly canceled by it. The Company may at any
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time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly canceled by the Trustee. If the
Company shall so acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are surrendered to the Trustee for
cancellation. 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 Trustee shall
be disposed of by the Trustee in accordance with its customary procedures and
certification of their disposal delivered to the Company unless by Company Order
the Company shall direct that canceled Securities be returned to it.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 with respect to any
Securities, interest, if any, on the Securities of each series shall be computed
on the basis of a 360-day year of twelve 30-day months.
SECTION 311. Currency and Manner of Payments in Respect of Securities.
(a) With respect to Registered Securities of any series not permitting the
election provided for in paragraph (b) below or the Holders of which
have not made the election provided for in paragraph (b) below,
payment of the principal of (and premium, if any, on) and interest, if
any, on any Registered Security of such series will be made in the
Currency in which such Registered Security is payable. The provisions
of this Section 311 may be modified or superseded with respect to any
Securities pursuant to Section 301.
(b) It may be provided pursuant to Section 301 with respect to Registered
Securities of any series that Holders shall have the option, subject
to paragraphs (d) and (e) below, to receive payments of principal of
(and premium, if any, on) or interest, if any, on such Registered
Securities in any of the Currencies which may be designated for such
election by delivering to the Trustee a written election with
signature guarantees and in the applicable form established pursuant
to Section 301, not later than the close of business on the Election
Date immediately preceding the applicable payment date. If a Holder
so elects to receive such payments in any such Currency, such election
will remain in effect for such Holder or any transferee of such Holder
until changed by such Holder or such transferee by written notice to
the Trustee (but any such change must be made not later than the close
of business on the Election Date immediately preceding the next
payment date to be effective for the payment to be made on such
payment date and no such change of election may be made with respect
to payments to be made on any Registered Security of such series with
respect to which an Event of Default has occurred or with respect to
which the Company has deposited funds pursuant to Article Four or
Fourteen or with respect to which a notice of redemption has been
given by the Company or a notice of option to elect repayment has been
sent by such Holder or such transferee). Any
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Holder of any such Registered Security who shall not have delivered
any such election to the Trustee not later than the close of business
on the applicable Election Date will be paid the amount due on the
applicable payment date in the relevant Currency as provided in
Section 311(a). The Trustee shall notify the Exchange Rate Agent as
soon as practicable after the Election Date of the aggregate principal
amount of Registered Securities for which Holders have made such
written election.
(c) Unless otherwise specified pursuant to Section 301, if the election
referred to in paragraph (b) above has been provided for pursuant to
Section 301, then, unless otherwise specified pursuant to Section 301,
not later than the fourth Business Day after the Election Date for
each payment date for Registered Securities of any series, the
Exchange Rate Agent will deliver to the Company a written notice
specifying, in the Currency in which Registered Securities of such
series are payable, the respective aggregate amounts of principal of
(and premium, if any, on) and interest, if any, on the Registered
Securities to be paid on such payment date, specifying the amounts in
such Currency so payable in respect of the Registered Securities as to
which the Holders of Registered Securities of such series shall have
elected to be paid in another Currency as provided in paragraph (b)
above. If the election referred to in paragraph (b) above has been
provided for pursuant to Section 301 and if at least one Holder has
made such election, then, unless otherwise specified pursuant to
Section 301, on the second Business Day preceding such payment date
the Company will deliver to the Trustee for such series of Registered
Securities an Exchange Rate Officer's Certificate in respect of the
Dollar or Foreign Currency payments to be made on such payment date.
Unless otherwise specified pursuant to Section 301, the Dollar or
Foreign Currency amount receivable by Holders of Registered Securities
who have elected payment in a Currency as provided in paragraph (b)
above shall be determined by the Company on the basis of the
applicable Market Exchange Rate in effect on the third Business Day
(the "Valuation Date") immediately preceding each payment date and
such determination shall be conclusive and binding for all purposes,
absent manifest error.
(d) If a Conversion Event occurs with respect to a Foreign Currency in
which any of the Securities are denominated or payable other than
pursuant to an election provided for pursuant to paragraph (b) above,
then with respect to each date for the payment of principal of (and
premium, if any, on) and interest, if any, on the applicable
Securities denominated or payable in such Foreign Currency occurring
after the last date on which such Foreign Currency was used (the
"Conversion Date"), the Dollar shall be the Currency of payment for
use on each such payment date. Unless otherwise specified pursuant to
Section 301, the Dollar amount to be paid by the Company to the
Trustee and by the Trustee or any Paying Agent to the Holders of such
Securities with respect to such payment date shall be, in the case of
a Foreign Currency other than a currency unit, the Dollar Equivalent
of the Foreign Currency or, in the case of a currency unit, the Dollar
Equivalent of the Currency Unit, in each case as determined by the
Exchange Rate Agent in the manner provided in paragraph (f) or (g)
below.
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(e) Unless otherwise specified pursuant to Section 301, if the Holder of a
Registered Security denominated in any Currency shall have elected to
be paid in another Currency as provided in paragraph (b) above, and a
Conversion Event occurs with respect to such elected Currency, such
Holder shall receive payment in the Currency in which payment would
have been made in the absence of such election; and if a Conversion
Event occurs with respect to the Currency in which payment would have
been made in the absence of such election, such Holder shall receive
payment in Dollars as provided in paragraph (d) above.
(f) The "Dollar Equivalent of the Foreign Currency" shall be determined by
the Exchange Rate Agent and shall be obtained for each subsequent
payment date by converting the specified Foreign Currency into Dollars
at the Market Exchange Rate on the Conversion Date.
(g) The "Dollar Equivalent of the Currency Unit" shall be determined by
the Exchange Rate Agent and subject to the provisions of paragraph (h)
below shall be the sum of each amount obtained by converting the
Specified Amount of each Component Currency into Dollars at the Market
Exchange Rate for such Component Currency on the Valuation Date with
respect to each payment.
(h) For purposes of this Section 311 the following terms shall have the
following meanings:
A "Component Currency" shall mean any Currency which, on the
Conversion Date, was a component currency of the relevant currency
unit, including, but not limited to, the ECU. A "Specified Amount" of
a Component Currency shall mean the number of units of such Component
Currency or fractions thereof which were represented in the relevant
currency unit, including, but not limited to, the ECU, on the
Conversion Date. If after the Conversion Date the official unit of
any Component Currency is altered by way of combination or
subdivision, the Specified Amount of such Component Currency shall be
divided or multiplied in the same proportion. If after the Conversion
Date two or more Component Currencies are consolidated into a single
currency, the respective Specified Amounts of such Component
Currencies shall be replaced by an amount in such single Currency
equal to the sum of the respective Specified Amounts of such
consolidated Component Currencies expressed in such single Currency,
and such amount shall thereafter be a Specified Amount and such single
Currency shall thereafter be a Component Currency. If after the
Conversion Date any Component Currency shall be divided into two or
more currencies, the Specified Amount of such Component Currency shall
be replaced by amounts of such two or more currencies, having an
aggregate Dollar Equivalent value at the Market Exchange Rate on the
date of such replacement equal to the Dollar Equivalent value of the
Specified Amount of such former Component Currency at the Market
Exchange Rate immediately before such division and such amounts shall
thereafter be Specified Amounts and such currencies shall thereafter
be Component Currencies. If, after the Conversion Date of the
relevant currency unit, including, but not limited to, the ECU, a
Conversion Event (other than any event referred to above in this
definition of "Specified Amount")
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occurs with respect to any Component Currency of such currency unit
and is continuing on the applicable Valuation Date, the Specified
Amount of such Component Currency shall, for purposes of calculating
the Dollar Equivalent of the Currency Unit, be converted into Dollars
at the Market Exchange Rate in effect on the Conversion Date of such
Component Currency.
"Election Date" shall mean the date for any series of Registered
Securities as specified pursuant to clause (13) of Section 301 by
which the written election referred to in paragraph (b) above may be
made.
All decisions and determinations of the Exchange Rate Agent regarding the Dollar
Equivalent of the Foreign Currency, the Dollar Equivalent of the Currency Unit,
the Market Exchange Rate and changes in the Specified Amounts as specified above
shall be in its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and irrevocably binding upon the Company, the
Trustee and all Holders of such Securities denominated or payable in the
relevant Currency. The Exchange Rate Agent shall promptly give written notice
to the Company and the Trustee of any such decision or determination.
In the event that the Company determines in good faith that a Conversion Event
has occurred with respect to a Foreign Currency, the Company will immediately
give written notice thereof to the Trustee and to the Exchange Rate Agent (and
the Trustee will promptly thereafter give notice in the manner provided for in
Section 106 to the affected Holders) specifying the Conversion Date. In the
event the Company so determines that a Conversion Event has occurred with
respect to the ECU or any other currency unit in which Securities are
denominated or payable, the Company will immediately give written notice thereof
to the Trustee and to the Exchange Rate Agent (and the Trustee will promptly
thereafter give notice in the manner provided for in Section 106 to the affected
Holders) specifying the Conversion Date and the Specified Amount of each
Component Currency on the Conversion Date. In the event the Company determines
in good faith that any subsequent change in any Component Currency as set forth
in the definition of Specified Amount above has occurred, the Company will
similarly give written notice to the Trustee and the Exchange Rate Agent.
The Trustee shall be fully justified and protected in relying and acting upon
information received by it from the Company and the Exchange Rate Agent and
shall not otherwise have any duty or obligation to determine the accuracy or
validity of such information independent of the Company or the Exchange Rate
Agent.
SECTION 312. Appointment and Resignation of Successor Exchange Rate Agent.
(a) Unless otherwise specified pursuant to Section 301, if and so long as
the Securities of any series (i) are denominated in a Currency other
than Dollars or (ii) may be payable in a Currency other than Dollars,
or so long as it is required under any other provision of this
Indenture, then the Company will maintain with respect to each such
series of Securities, or as so required, at least one Exchange Rate
Agent. The Company will cause the Exchange Rate Agent to make the
necessary foreign exchange determinations at the time and in the
manner specified pursuant to Section 301 for the purpose of
determining the applicable rate of exchange and, if applicable,
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for the purpose of converting the issued Currency into the applicable
payment Currency for the payment of principal (and premium, if any)
and interest, if any, pursuant to Section 311.
(b) No resignation of the Exchange Rate Agent and no appointment of a
successor Exchange Rate Agent pursuant to this Section shall become
effective until the acceptance of appointment by the successor
Exchange Rate Agent as evidenced by a written instrument delivered to
the Company and the Trustee.
(c) If the Exchange Rate Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the
Exchange Rate Agent for any cause with respect to the Securities of
one or more series, the Company, by or pursuant to a Board Resolution,
shall promptly appoint a successor Exchange Rate Agent or Exchange
Rate Agents with respect to the Securities of that or those series (it
being understood that any such successor Exchange Rate Agent may be
appointed with respect to the Securities of one or more or all of such
series and that, unless otherwise specified pursuant to Section 301,
at any time there shall only be one Exchange Rate Agent with respect
to the Securities of any particular series that are originally issued
by the Company on the same date and that are initially denominated
and/or payable in the same Currency).
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect with
respect to any series of Securities specified in such Company Request (except as
to any surviving rights of registration of transfer or exchange of Securities of
such series herein expressly provided for and the obligation of the Company to
pay any Additional Amounts as contemplated by Section 1005) and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered (other than (i) Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided
in Section 306, and (ii) Securities of such series for whose
payment money has theretofore been deposited in trust with the
Trustee or any Paying Agent or segregated and held in trust by
the Company and thereafter repaid to the Company, as provided in
Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all Securities of such series not theretofore delivered to the
Trustee for cancellation
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(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and
at the expense, of the Company, and the Company,
in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust
funds in trust for such purpose an amount in the Currency in
which the Securities of such series are payable, sufficient to
pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the date of such
deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for
relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606, the obligations of
the Trustee to any Authenticating Agent under Section 611 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities, and this
Indenture, to the payment either directly or through any Paying Agent (including
the Company acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium, if any) and interest
for whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required by law.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, 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):
(1) default in the payment of any interest on any Security of that series
when such interest becomes due and payable, and continuance of such
default for a period of 30 days; provided, that, if Securities are
issued to a NWPS Trust or a trustee of such trust in connection with
the issuance of Trust Securities by such trust, such thirty (30) day
period will be replaced by a ten (10) day period; and provided,
further, that a valid extension of the interest payment period by the
Company in accordance with the terms of any indenture supplemental
hereto shall not constitute a default in the payment of interest for
this purpose; or
(2) default in the payment of the principal of (or premium, if any, on)
any Security of that series at its Maturity; provided, however, that a
valid extension of the maturity of such Securities in accordance with
the terms of any indenture supplemental hereto shall not constitute a
default in the payment of principal or premium, if any; or
(3) default in the deposit of any sinking fund payment, when and as due by
the terms of the Securities of that series and Article 12; or
(4) default in the performance, or breach, of any covenant or agreement of
the Company in this Indenture which affects or is applicable to the
Securities of that series (other than a default in the performance, or
breach of a covenant or agreement which is specifically dealt with
elsewhere in this Section or which has expressly been included in this
Indenture solely for the benefit of one or more series of Securities
other than that series), and continuance of such default or breach 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 25% in principal amount of all
Outstanding Securities of that 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; or
(5) the entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under the
Federal Bankruptcy Code or any other applicable federal or state law,
or appointing a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or of any substantial part
of its property, or ordering the winding up or liquidation of its
affairs, and the
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continuance of any such decree or order unstayed and in effect for a
period of 90 consecutive days; or
(6) in the event Securities are issued and sold to a NWPS Trust or a
trustee of such trust in connection with the issuance of Trust
Securities by such NWPS Trust, such NWPS Trust shall have voluntarily
or involuntarily dissolved, wound-up its business or otherwise
terminated its existence except in connection with (i) the
distribution of Securities to holders of Trust Securities in
liquidation or redemption of their interests in such NWPS Trust, (ii)
the redemption of all of the outstanding Trust Securities of such NWPS
Trust or (iii) certain mergers, consolidations or amalgamations, each
as permitted by the Declaration of such NWPS Trust.
(7) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or 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 the Federal Bankruptcy Code or any other applicable federal or
state law, or the consent by it to the filing of any such petition or
to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other 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
(8) any other Event of Default provided with respect to Securities of that
series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default described in clause (1), (2), (3), (4) or (7) of Section
501 with respect to Securities of any series at the time Outstanding occurs and
is continuing, then in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities of that series may
declare the principal amount (or, if the Securities of that series are Original
Issue Discount Securities or Indexed Securities, such portion of the principal
amount as may be specified in the terms of that series) of all of the Securities
of that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or specified portion thereof) shall become immediately
due and payable. If an Event of Default specified in Section 501(5) or 501(6)
occurs and is continuing, then the principal amount of all the Securities shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to Securities of
any series (or of all series, as the case may be) has been made and before a
judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter provided in this Article, the Holders of a majority in principal
amount of the Outstanding Securities of that series (or of all series, as the
case may be), by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay in the Currency in which the Securities of such series are payable
(except as otherwise
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specified pursuant to Section 301 for the Securities of such series
and except, if applicable, as provided in Sections 312(b), 312(d) and
312(e)),
(A) all overdue interest on all Outstanding Securities of that series
(or of all series, as the case may be),
(B) all unpaid principal of (and premium, if any, on) any Outstanding
Securities of that series (or of all series, as the case may be)
which has become due otherwise than by such declaration of
acceleration, and interest on such unpaid principal at the rate
or rates prescribed therefor in such Securities,
(C) interest on overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series (or of
all series, as the case may be), other than the non-payment of amounts
of principal of (or premium, if any, on) or interest on Securities of
that series (or of all series, as the case may be) which have become
due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days or 10 days in the case of Securities
issued to a NWPS Trust or a trustee of such trust, or
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(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
then the Company will, upon demand of the Trustee, pay to the Trustee for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal (and premium, if any) and interest, and
interest on any overdue principal (and premium, if any) and on any overdue
interest, at the rate or rates prescribed therefor in such Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name 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 (or of all
series, as the case may be) occurs and is 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 (or of all series, as the case may be) 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 504. 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, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any), or such portion of the principal amount of any
series of Original Issue Discount Securities or Indexed Securities as
may be specified in the terms of such series, and interest 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 the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
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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 amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
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 505. 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 of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee 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, upon presentation of the Securities, and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
606;
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any, on) and interest on the
Securities 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 (and premium, if
any) and interest, respectively; and
Third: The balance, if any, to the Company or any other Person or
Persons entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
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(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series in the case of any Event of
Default described in clause (1), (2), (3), (4) or (7) of Section 501,
or, in the case of any Event of Default described in clause (5) or (6)
of Section 501, the Holders of not less than 25% in principal amount
of all Outstanding Securities, 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;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority or
more in principal amount of the Outstanding Securities of that series
in the case of any Event of Default described in clause (1), (2), (3),
(4) or (7) of Section 501, or, in the case of any Event of Default
described in clause (5) or (6) of Section 501, by the Holders of a
majority or more in principal amount of all Outstanding Securities;
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
Holders of Securities of the same series, in the case of any Event of Default
described in clause (1), (2), (3), (4) or (7) of Section 501, or of Holders of
all Securities in the case of any Event of Default described in clause (5) or
(6) of Section 501, 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 Holders of Securities of the same series, in the case of any Event of
Default described in clause (1), (2), (3), (4) or (7) of Section 501, or of
Holders of all Securities in the case of any Event of Default described in
clause (5) or (6) of Section 501.
SECTION 508. 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, as provided herein (including, if applicable, Article Fourteen) and in
such Security, of the principal of (and premium, if any, on) and (subject to
Section 307) interest on, such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
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SECTION 509. 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 has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders of Securities shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders of Securities 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 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security 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 512. Control by Holders.
With respect to the Securities of any series, the Holders of not less than 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 relating to or arising under clause (1), (2), (3), (4)
or (7) of Section 501, and, with respect to all Securities, the Holders of not
less than a majority in principal amount of all Outstanding Securities 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, not relating to or arising under clause (1), (2), (3),
(4) or (7) of Section 501, provided that in each case
(1) such direction shall not be in conflict with any rule of law or with
this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders of
Securities of such series not consenting.
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SECTION 513. Waiver of Past Defaults.
Subject to Section 502, 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 described in clause
(1), (2), (3), (4) or (7) of Section 501 (or, in the case of a default described
in clause (5) or (6) of Section 501, the Holders of not less than a majority in
principal amount of all Outstanding Securities may waive any such past default),
and its consequences, except a default
(1) in respect of the payment of the principal of (or premium, if any, on)
or interest on any Security, or
(2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, any such default shall cease to exist, and any Event 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 Event of Default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
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, a court may require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess costs against any such
party litigant, in the manner and to the extent provided in the Trust Indenture
Act; provided, that neither this Section nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company or the Trustee or in any suit
for the enforcement of the right to receive the principal of and interest on any
Security.
SECTION 515. 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.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
Within 90 days after the occurrence of any Default hereunder with respect to the
Securities of any series, the Trustee shall transmit in the manner and to the
extent provided in TIA Section 313(c), notice of such default hereunder known to
the Trustee, unless such Default shall have been cured or waived; provided,
however, that, except in the case of a Default in the payment of the principal
of (or premium, if any, on) or interest on any Security of such series or in the
payment of any sinking fund installment with respect to Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Holders of
Securities of such series; and provided, further, that in the case of any
Default of the character specified in Section 501(3) with respect to Securities
of such series, no such notice to Holders shall be given until at least 30 days
after the occurrence thereof.
SECTION 602. Certain Rights of Trustee.
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by
a Board Resolution;
(3) 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, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(5) 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 of the Holders of Securities of any series pursuant to this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses
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and liabilities which might be incurred by it in compliance with such
request or direction;
(6) 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 be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney;
(7) 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
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture. The Trustee shall not be required 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.
SECTION 603. Trustee Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except for the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Securities and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility on Form T-1 supplied to the
Company are true and accurate, subject to the qualifications set forth therein.
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 604. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar
or any other agent of the Company or of the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
TIA Sections 310(b) and 311, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
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SECTION 605. 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 otherwise
agreed with the Company.
SECTION 606. Compensation and Reimbursement.
The Company agrees:
(1) to 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);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements
and advances 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 any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder. The obligations of the Company under this Section to
compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the
Trustee shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture. As security
for the performance of such obligations of the Company, the Trustee
shall have a claim prior to the Securities upon all property and funds
held or collected by the Trustee as such, except funds held in trust
for the payment of principal of (and premium, if any, on) or interest
on particular Securities.
SECTION 607. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible to act
as Trustee under TIA Section 310(a)(1) and shall have a combined capital and
surplus of at least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of Federal,
State, territorial or District of Columbia 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.
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SECTION 608. 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 609.
(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 609 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 not less than a majority in
principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security for
at least six months, or
(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, 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, (i) the Company, by a Board Resolution, may
remove the Trustee with respect to all Securities, or (ii) subject to
TIA Section 315(e), any Holder who has been a bona fide Holder of a
Security 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,
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
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at any time there shall be only one Trustee with respect to the
Securities of any particular series). 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 successor
Trustee so appointed shall, forthwith upon its acceptance of such
appointment, 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
hereinafter provided, any Holder who has been a bona fide Holder of a
Security of such series 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 with
respect to the Securities of such series.
(f) 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 to the Holders of Securities of such series in the manner
provided for in Section 106. 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 609. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, 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 its charges, 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
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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 successor Trustee, such retiring Trustee 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. Whenever there is a successor Trustee with
respect to one or more (but less than all) series of securities issued
pursuant to this Indenture, the terms "Indenture" and "Securities"
shall have the meanings specified in the provisos to the respective
definitions of those terms in Section 101 which contemplate such
situation.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts
referred to in paragraph (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 610. 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; and in
case at that time any of the Securities shall not have been authenticated, any
successor Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificates shall have the full force which it is anywhere in the
Securities or in this Indenture provided that the certificate of the Trustee
shall have; provided, however, that the right to adopt
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the certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
SECTION 611. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding, the Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series and the Trustee shall give written notice
of such appointment to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, in the manner provided for in
Section 106. 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. Any such appointment shall be evidenced
by an instrument in writing signed by a Responsible Officer of the Trustee, and
a copy of such instrument shall be promptly furnished to the Company. 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 of America, any state 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 corporation 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 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 an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, it 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 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 and shall give written notice of
such appointment to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, in the manner provided for in
Section 106. 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
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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, subject to the provisions
of Section 606.
If an appointment with respect to one or more series is made pursuant to this
Section, the Securities of such series may have endorsed thereon, in addition to
the Trustee's certificate of authentication, an alternate certificate of
authentication in the following form:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
The Chase Manhattan Bank (N.A.),
as Trustee
By:
Authenticating Agent
By:
Authorized Officer
SECTION 612. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same, agrees with the
Company and the Trustee that none of the Company or the Trustee or any agent of
either of them shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with TIA
Section 312, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the first May 15 after
the first issuance of Securities pursuant to this Indenture, the Trustee shall
transmit to the Holders of Securities, in
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the manner and to the extent provided in TIA Section 313(c), a brief report
dated as of such May 15 if required by TIA Section 313. A copy of each such
report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange upon which the Securities are listed, with the
Commission and with the Company. The Company will notify the Trustee when the
Securities are listed on any stock exchange.
SECTION 703. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if the Company is
not required to file information, documents or reports pursuant to
either of such Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934 in respect of a
security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit to all Holders, in the manner and to the extent provided in
TIA Section 313(c), within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2)
of this Section as may be required by rules and regulations prescribed
from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation or
convey, transfer or lease, or permit one or more of its Subsidiaries to convey,
transfer or lease, all or substantially all of the property and assets of the
Company and its Subsidiaries on a consolidated basis, to any Person, unless:
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(1) 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, the properties and assets of the Company and its
Subsidiaries on a consolidated basis (A) shall be a corporation,
partnership or trust organized and validly existing under the laws of
the United States of America, any state thereof or the District of
Columbia and (B) shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, the Company's obligation for the due and punctual payment
of the principal of (and premium, if any, on) and interest on all the
Securities and the performance and observance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(3) the Company or such Person shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
This Section shall only apply to a merger or consolidation in which the Company
is not the surviving corporation and to conveyances, leases and transfers by the
Company as transferor or lessor.
SECTION 802. Successor Person Substituted.
Upon any consolidation by the Company with or merger by the Company into any
other corporation or any conveyance, transfer or lease of the properties and
assets of the Company and its Subsidiaries on a consolidated basis to any Person
in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made 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 Person had been named as the Company herein,
and in the event of any such conveyance or transfer, the Company (which term
shall for this purpose mean the Person named as the "Company" in the first
paragraph of this Indenture or any successor Person which shall theretofore
become such in the manner described in Section 801), except in the case of a
lease, shall be discharged of all obligations and covenants under this Indenture
and the Securities and may be dissolved and liquidated.
SECTION 803. Assignment of Rights.
The Company will have the right at all times to assign any of its respective
rights or obligations under this Indenture to a direct or indirect wholly-owned
Subsidiary of the Company; provided, that in the event of any such assignment,
the Company will remain liable for all of its respective obligations. Subject
to the foregoing, this Indenture will be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties hereto.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by or pursuant
to a Board Resolution, 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:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company
contained herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that
such covenants are being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default (and if such Events of Default
are to be for the benefit of less than all series of Securities,
stating that such Events of Default are being included solely for the
benefit of such series); or
(4) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective
only when there is no Security Outstanding of any series created prior
to the execution of such supplemental indenture which is entitled to
the benefit of such provision; or
(5) to secure the Securities; or
(6) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(7) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 609(b); or
(8) to close this Indenture with respect to the authentication and
delivery of additional series of Securities, to cure any ambiguity, to
correct or supplement any provision herein which may be inconsistent
with any other provision herein, or to make any other provisions with
respect to matters or questions arising under this Indenture; provided
such action shall not adversely affect the interests of the Holders of
Securities of any series in any material respect.
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SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount
of all Outstanding Securities of any series, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by or pursuant to 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 which affect
such series of Securities or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security of such series,
(1) change the Stated Maturity of the principal of, or any installment of
interest on, any Security of such series, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or change any obligation of the Company
to pay Additional Amounts contemplated by Section 1005 (except as
contemplated by Section 801(1) and permitted by Section 901(1)), or
reduce the amount of the principal of an Original Issue Discount
Security of such series that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to
Section 502 or the amount thereof provable in bankruptcy pursuant to
Section 504, or change the redemption provisions of any Security, or
adversely affect any right of repayment at the option of any Holder of
any Security of such series, or change any Place of Payment where, or
the Currency in which, any Security of such series or any premium or
interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption or repayment at the option of
the Holder, on or after the Redemption Date or Repayment Date, as the
case may be), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of such series required for any such supplemental
indenture, for any waiver of compliance with certain provisions of
this Indenture which affect such series or certain defaults applicable
to such series hereunder and their consequences provided for in this
Indenture, or
(3) modify any of the provisions of this Section or Section 513, except to
increase any such percentage or to provide that certain other
provisions of this Indenture which affect such series cannot be
modified or waived without the consent of the Holder of each
Outstanding Security of such series.
Any such supplemental indenture 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, shall not
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.
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SECTION 903. 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 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 or
immunities under this Indenture or otherwise.
SECTION 904. 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.
SECTION 905. 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 906. 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 907. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any supplemental
indenture pursuant to the provisions of Section 902, the Company shall give
notice thereof to the Holders of each Outstanding Security affected, in the
manner provided for in Section 106, setting forth in general terms the substance
of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders of each series
of Securities that it will duly and punctually pay the principal of (and
premium, if any, on) and interest on the Securities of that series in accordance
with the terms of the Securities and this Indenture.
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SECTION 1002. Maintenance of Office or Agency.
If the Securities of a series are issuable only as Registered Securities, the
Company will maintain in each Place of Payment for any series of Securities an
office or agency where Securities of that series may be presented or surrendered
for payment, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind any
such designation; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. Unless otherwise specified with
respect to any Securities as contemplated by Section 301 with respect to a
series of Securities, the Company hereby designates as a Place of Payment for
each series of Securities the office or agency of the Company in The City of New
York, and initially appoints the Trustee at its Corporate Trust Office as Paying
Agent in such city and as its agent to receive all such presentations,
surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to Section
301, if and so long as the Securities of any series (i) are denominated in a
Currency other than Dollars or (ii) may be payable in a Currency other than
Dollars, or so long as it is required under any other provision of the
Indenture, then the Company will maintain with respect to each such series of
Securities, or as so required, at least one Exchange Rate Agent.
SECTION 1003. 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 any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any, on) or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum in the Currency in which the Securities of such series are payable (except
as otherwise specified pursuant to Section 301 for the Securities of such series
and except, if applicable, as provided in Sections 312(b), 312(d) and 312(e))
sufficient to pay the principal (and premium, if any) or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so
to act.
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Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to or on each due date of the principal of (and
premium, if any, on) or interest on any Securities of that series, deposit with
a Paying Agent a sum (in the Currency described in the preceding paragraph)
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum 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 will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent (other than the Trustee) for any series
of Securities 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 will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any, on) and interest on Securities of such series 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;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities of such series) in the making of any
payment of principal of (or premium, if any, on) or interest on the
Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, 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 sums were held by the Company or such Paying Agent;
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 sums.
Except as provided in the Securities of any series, 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, on) or interest on any
Security of any series, 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 the Holder of such Security or coupon shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, 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 repayment, may at the
expense of the Company cause to be published once, in an Authorized Newspaper,
notice 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 publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
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SECTION 1004. Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the end of each
fiscal year, a brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or her knowledge of
the Company's compliance with all conditions and covenants under this Indenture.
For purposes of this Section 1004, such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
SECTION 1005. Additional Amounts.
If any Securities of a series provide for the payment of additional amounts to
any Holder who is not a United States person in respect of any tax, assessment
or governmental charge ("Additional Amounts"), the Company will pay to the
Holder of any Security of such series such Additional Amounts as may be
specified as contemplated by Section 301. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal (or premium, if any, on)
or interest on, or in respect of, any Security of a series or the net proceeds
received on the sale or exchange of any Security of a series, such mention shall
be deemed to include mention of the payment of Additional Amounts provided for
by the terms of such series established pursuant to Section 301 to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to such terms and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
Except as otherwise specified as contemplated by Section 301, if the Securities
of a series provide for the payment of Additional Amounts, at least 10 days
prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment or principal (and premium, if any) is
made), and at least 10 days prior to each date of payment of principal (and
premium, if any) or interest if there has been any change with respect to the
matters set forth in the below-mentioned Officers' Certificate, the Company will
furnish the Trustee and the Company's principal Paying Agent or Paying Agents,
if other than the Trustee, with an Officers' Certificate instructing the Trustee
and such Paying Agent or Paying Agents whether such payment of principal of (and
premium, if any, on) or interest on the Securities of that series shall be made
to Holders of Securities of that series who are not United States persons
without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series and the Company will pay to the Trustee or
such Paying Agent the Additional Amounts required by the terms of such
Securities. In the event that the Trustee or any Paying Agent, as the case may
be, shall not so receive the above-mentioned certificate, then the Trustee or
such Paying Agent shall be entitled to (i) assume that no such withholding or
deduction is required with respect to any payment of principal (and premium, if
any) or interest with respect to any Securities of a series until it shall have
received a certificate advising otherwise and (ii) to make all payments of
principal (and premium, if any) and interest with respect to the Securities of a
series without withholding or deductions until otherwise advised. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions
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taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, all material taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
SECTION 1007. Maintenance of Properties.
The Company will cause all property necessary for the operation of the business
of the Company and its Subsidiaries as a whole to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will 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 and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent or restrict the sale, abandonment or other
disposition of any of such property if such action is, in the judgment of the
Company, desirable in the conduct of the business of the Company and its
Subsidiaries as a whole and not disadvantageous in any material respect to the
Holders.
SECTION 1008. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and the rights (charter and statutory) and franchises of the Company and any
Subsidiary; provided, however, that the Company shall not be required to
preserve any such right or franchise if the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries as a whole.
SECTION 1009. Limitation on Dividends; Transactions with Affiliates.
(a) If Securities are issued to a NWPS Trust or a trustee of such trust in
connection with the issuance of Trust Securities by such NWPS Trust
and (i) there shall have occurred any event that would constitute an
Event of Default or (ii) the Company shall be in default with respect
of its payment or any other obligations under the Preferred Securities
Guarantee or Common Securities Guarantee relating to such NWPS Trust,
then (A) the Company shall not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock,
and (B) the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company which rank pari passu with or junior
to such Securities, provided that the foregoing restriction in
paragraph (A)
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does not apply to any stock dividends paid by the Company where the
dividend stock is the same stock as that on which the dividend is
being paid.
(b) If Securities are issued to a NWPS Trust or a trustee of such a trust
in connection with the issuance of Trust Securities by such NWPS Trust
and the Company shall have given notice of its election to defer
payments of interest on such Securities by extending the interest
payment period as provided in the Indenture and such period, or any
extension thereof, shall be continuing, then (A) the Company shall not
declare or pay any dividend or, make any distributions with respect
to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, and (B) the Company shall not
make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Company
which rank pari passu with or junior to such Securities, provided that
the foregoing restriction in paragraph (A) does not apply to any stock
dividends paid by the Company where the dividend stock is the same as
that on which the dividend is being paid.
SECTION 1010. Covenants as to NWPS Trusts.
In the event Securities are issued and sold to a NWPS Trust or a trustee of such
trust in connection with the issuance of Trust Securities by such NWPS Trust,
for so long as such Trust Securities remain outstanding, the Company will (i)
maintain 100% direct or indirect ownership of the Common Securities of such NWPS
Trust; provided, however, that any permitted successor of the Company under the
Indenture may succeed to the Company's ownership of the Common Securities, and
(ii) use its reasonable efforts to cause such NWPS Trust (a) to remain a
statutory business trust, except in connection with a distribution of Securities
as provided in the Declaration of such NWPS Trust, the redemption of all of the
Trust Securities and in connection with certain mergers, consolidations or
amalgamation permitted by the Declaration of such NWPS Trust, and (b) otherwise
continue to be treated as a grantor trust for United States federal income tax
purposes.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall
be redeemable in accordance with the terms of such Securities and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of
the Company, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal amount
of Securities of such series to be redeemed and shall deliver to the Trustee
such
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documentation and records as shall enable the Trustee to select the Securities
to be redeemed pursuant to Section 1103. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
SECTION 1103. Selection by Trustee 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 not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of
portions of the principal of Securities of such series; provided, however, that
no such partial redemption shall reduce the portion of the principal amount of a
Security not redeemed to less than the minimum authorized denomination for
Securities of such series established pursuant to Section 301.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, 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 Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Except as otherwise specified as contemplated by Section 301, notice of
redemption shall be given in the manner provided for in Section 106 not less
than 30 nor more than 60 days prior to the Redemption Date, to each Holder of
Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price (together with
accrued interest, if any, to the Redemption Date payable as provided
in Section 1106) will become due and payable upon each such Security,
or the portion thereof, to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
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(5) the place or places where such Securities are to be surrendered for
payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the Company
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.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or with
a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 1003) an amount of money in the
Currency in which the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series and except,
if applicable as provided in Sections 312(b), 312(d) and 312(e)) sufficient to
pay the Redemption Price of, and accrued interest on, all the Securities which
are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified in the Currency in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series and except, if applicable as provided in Sections
312(b), 312(d) and 312(e)) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price, together
with accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest on Registered Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption or portion thereof shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) set forth in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part (pursuant to the provisions of
this Article or of Article Twelve) shall be surrendered 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 such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and
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deliver to the Holder of such Security without service charge, a new Security or
Securities of the same series, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
Retirements of Securities of any series pursuant to any sinking fund shall be
made in accordance with the terms of such Securities and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
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 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
Subject to Section 1203, in lieu of making all or any part of any mandatory
sinking fund payment with respect to any Securities of a series in cash, subject
to the limitations set forth at Section 1001, the Company may at its option (1)
deliver to the Trustee Outstanding Securities of a series (other than any
previously called for redemption) theretofore purchased or otherwise acquired by
the Company and/or (2) receive credit for the principal amount of Securities of
such series which have been previously delivered to the Trustee by the Company
or for 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 any
mandatory sinking fund payment with respect to the Securities of the same series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; provided, however, that such Securities have not been
previously so credited. Such Securities 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 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash in the Currency in which the Securities
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of such series are payable (except as otherwise specified pursuant to Section
301 for the Securities of such series and except, if applicable, as provided in
Sections 312(b), 312(d) and 312(e)) and the portion thereof, if any, which is to
be satisfied by delivering or crediting Securities of that series pursuant to
Section 1202 (which Securities will, if not previously delivered, accompany such
certificate) and whether the Company intends to exercise its right to make a
permitted optional sinking fund payment with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the next succeeding sinking fund payment date. In the case of the
failure of the Company to deliver such certificate, the sinking fund payment due
on the next succeeding sinking fund payment date for that series shall be paid
entirely in cash and shall be sufficient to redeem the principal amount of such
Securities subject to a mandatory sinking fund payment without the option to
deliver or credit Securities as provided in Section 1202 and without the right
to make any optional sinking fund payment, if any, with respect to such series.
Not more than 60 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 1103 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 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
Prior to any sinking fund payment date, the Company shall pay to the Trustee or
a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 1103) in cash a sum equal to any
interest that will accrue to the date fixed for redemption of Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 1203.
Notwithstanding the foregoing, with respect to a sinking fund for any series of
Securities, if at any time the amount of cash to be paid into such sinking fund
on the next succeeding sinking fund payment date, together with any unused
balance of any preceding sinking fund payment or payments for such series, does
not exceed in the aggregate $100,000, the Trustee, unless requested by the
Company, shall not give the next succeeding notice of the redemption of
Securities of such series through the operation of the sinking fund. Any such
unused balance of moneys deposited in such sinking fund shall be added to the
sinking fund payment for such series to be made in cash on the next succeeding
sinking fund payment date or, at the request of the Company, shall be applied at
any time or from time to time to the purchase of Securities of such series, by
public or private purchase, in the open market or otherwise, at a purchase price
for such Securities (excluding accrued interest and brokerage commissions, for
which the Trustee or any Paying Agent will be reimbursed by the Company) not in
excess of the principal amount thereof.
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ARTICLE THIRTEEN
REPAYMENT AT OPTION OF HOLDERS
SECTION 1301. Applicability of Article.
Repayment of Securities of any series before their Stated Maturity at the option
of Holders thereof shall be made in accordance with the terms of such Securities
and (except as otherwise specified as contemplated by Section 301 for Securities
of any series) in accordance with this Article.
SECTION 1302. Repayment of Securities.
Securities of any series subject to repayment in whole or in part at the option
of the Holders thereof will, unless otherwise provided in the terms of such
Securities, be repaid at a price equal to the principal amount thereof, together
with interest, if any, thereon accrued to the Repayment Date specified in or
pursuant to the terms of such Securities. The Company covenants that on or
before the Repayment Date it will deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money in the Currency in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series and except, if
applicable, as provided in Sections 312(b), 312(d) and 312(e)) sufficient to pay
the principal (or, if so provided by the terms of the Securities of any series,
a percentage of the principal) of, and (except if the Repayment Date shall be an
Interest Payment Date) accrued interest on, all the Securities or portions
thereof, as the case may be, to be repaid on such date.
SECTION 1303. Exercise of Option.
Securities of any series subject to repayment at the option of the Holders
thereof will contain an "Option to Elect Repayment" form on the reverse of such
Securities. To be repaid at the option of the Holder, any Security so providing
for such repayment, with the "Option to Elect Repayment" form on the reverse of
such Security duly completed by the Holder (or by the Holder's attorney duly
authorized in writing), must be received by the Company at the Place of Payment
therefor specified in the terms of such Security (or at such other place or
places or which the Company shall from time to time notify the Holders of such
Securities) not earlier than 45 days nor later than 30 days prior to the
Repayment Date. If less than the entire principal amount of such Security is to
be repaid in accordance with the terms of such Security, the principal amount of
such Security to be repaid, in increments of the minimum denomination for
Securities of such series, and the denomination or denominations of the Security
or Securities to be issued to the Holder for the portion of the principal amount
of such Security surrendered that is not to be repaid, must be specified. The
principal amount of any Security providing for repayment at the option of the
Holder thereof may not be repaid in part if, following such repayment, the
unpaid principal amount of such Security would be less than the minimum
authorized denomination of Securities of the series of which such Security to be
repaid is a part. Except as otherwise may be provided by the terms of any
Security providing for repayment at the option of the Holder thereof, exercise
of the repayment option by the Holder shall be irrevocable unless waived by the
Company.
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SECTION 1304. When Securities Presented for Repayment Become Due and Payable.
If Securities of any series providing for repayment at the option of the Holders
thereof shall have been surrendered as provided in this Article and as provided
by or pursuant to the terms of such Securities, such Securities or the portions
thereof, as the case may be, to be repaid shall become due and payable and shall
be paid by the Company on the Repayment Date therein specified, and on and after
such Repayment Date (unless the Company shall default in the payment of such
Securities on such Repayment Date) such Securities shall, if the same were
interest-bearing, cease to bear interest. Upon surrender of any such Security
for repayment in accordance with such provisions, the principal amount of such
Security so to be repaid shall be paid by the Company, together with accrued
interest, if any, to the Repayment Date; provided, however, that in the case of
Registered Securities, installments of interest, if any, whose Stated Maturity
is on or prior to the Repayment Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If the principal amount of any Security surrendered for repayment shall not be
so repaid upon surrender thereof, such principal amount (together with interest,
if any, thereon accrued to such Repayment Date) shall, until paid, bear interest
from the Repayment Date at the rate of interest Yield to Maturity (in the case
of Original Issue Discount Securities) set forth in such Security.
SECTION 1305. Securities Repaid in Part.
Upon surrender of any Registered Security which is to be repaid in part only,
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge and at the expense of the
Company, a new Registered Security or Securities of the same series, of any
authorized denomination specified by the Holder, in an aggregate principal
amount equal to and in exchange for the portion of the principal of such
Security so surrendered which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Company's Option to Effect Defeasance or Covenant Defeasance.
Except as otherwise specified as contemplated by Section 301 for Securities of
any series of this Section 1401, the provisions of this Article Fourteen shall
apply to each series of Securities, and the Company may, at its option, effect
(i) defeasance of the Securities of or within a series under Section 1402,
except that the Company shall not effect any such defeasance under Section 1402
in respect of any Securities of which a NWPS Trust or a trustee of such trust is
the Holder, or (ii) covenant defeasance of or within a series under Section 1403
in accordance with the terms of such Securities and in accordance with this
Article.
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SECTION 1402. Defeasance and Discharge.
Upon the Company's exercise of the above option applicable to this Section with
respect to any Securities of or within a series, the Company shall be deemed to
have been discharged from its obligations with respect to such Outstanding
Securities on the date the conditions set forth in Section 1404 are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Outstanding Securities, which shall thereafter be deemed to
be "Outstanding" only for the purposes of Section 1405 and the other Sections of
this Indenture referred to in (A) and (B) below, and to have satisfied all its
other obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (A) the
rights of Holders of such Outstanding Securities to receive, solely from the
trust fund described in Section 1404 and as more fully set forth in such
Section, payments in respect of the principal of (and premium, if any, on) and
interest on such Securities (B) the Company's obligations with respect to such
Securities under Sections 304, 305, 306, 1002 and 1003 and with respect to the
payment of Additional Amounts, if any, on such Securities as contemplated by
Section 1005, (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (D) this Article Fourteen. Subject to compliance with
this Article Fourteen, the Company may exercise its option under this Section
1402 notwithstanding the prior exercise of its option under Section 1403 with
respect to such Securities.
SECTION 1403. Covenant Defeasance.
Upon the Company's exercise of the above option applicable to this Section with
respect to any Securities of or within a series, the Company shall be released
from its obligations under Section 803 and Sections 1006 through 1008, and, if
specified pursuant to Section 301, its obligations under any other covenant,
with respect to such Outstanding Securities on and after the date the conditions
set forth in Section 1404 are satisfied (hereinafter, "covenant defeasance"),
and such Securities shall thereafter be deemed not to be "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to such Outstanding
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 501(4) or otherwise,
as the case may be, but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 1402 or
Section 1403 to any Outstanding Securities of or within a series:
(1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall
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agree to comply with the provisions of this Article Fourteen
applicable to it) as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities,
(A) an amount (in such Currency in which such Securities are then
specified as payable at Stated Maturity), or (B) Government
Obligations applicable to such Securities (determined on the basis of
the Currency in which such Securities are then specified as payable at
Stated Maturity) which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment of
principal (including any premium) and interest, if any, under such
Securities, money in an amount, or (C) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, (i) the principal of (and premium, if any, on) and
interest on such Outstanding Securities on the Stated Maturity (or
Redemption Date, if applicable) of such principal (and premium, if
any) or installment or interest and (ii) any mandatory sinking fund
payments or analogous payments applicable to such Outstanding
Securities on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of such Securities;
provided that the Trustee shall have been irrevocably instructed to
apply such money or the proceeds of such Government Obligations to
said payments with respect to such Securities. Before such a deposit,
the Company may give to the Trustee, in accordance with Section 1102
hereof, a notice of its election to redeem all or any portion of such
Outstanding Securities at a future date in accordance with the terms
of the Securities of such series and Article Eleven hereof, which
notice shall be irrevocable. Such irrevocable redemption notice, if
given, shall be given effect in applying the foregoing.
(2) No Default or Event of Default with respect to such Securities shall
have occurred and be continuing on the date of such deposit or,
insofar as paragraphs (5) and (7) of Section 501 are concerned, at any
time during the period ending on the 91st day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party
or by which it is bound.
(4) In the case of an election under Section 1402, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (y) since the date of execution
of this Indenture, there has been a change in the applicable United
States federal income tax law, in either case to the effect that, and
based thereon such opinion shall confirm that, the Holders of such
Outstanding Securities will not recognize income, gain or loss for
United States federal income tax purposes as a result of such
defeasance and will be subject to United States federal income
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tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred.
(5) In the case of an election under Section 1403, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities will not recognize income, gain
or loss for United States federal income tax purposes as a result of
such covenant defeasance and will be subject to United States federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred.
(6) Notwithstanding any other provisions of this Section, such defeasance
or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations in
connection therewith pursuant to Section 301.
(7) The Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the deposit contemplated by subsection (1) shall
not result in the Company, the Trustee or the defeasance trust being
deemed an "investment company" under the Investment Company Act of
1940, as amended.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the defeasance
under Section 1402 or the covenant defeasance under Section 1403 (as
the case may be) have been complied with.
SECTION 1405. Deposited Money and Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money and
Government Obligations (or other property as may be provided pursuant to Section
301) (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee -- collectively for purposes of this Section 1405, the
"Trustee") pursuant to Section 1404 in respect of such Outstanding Securities
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to Section 301,
if, after a deposit referred to in Section 1404(1) has been made, (a) the Holder
of a Security in respect of which such deposit was made is entitled to, and
does, elect pursuant to Section 312(b) or the terms of such Security to receive
payment in a Currency other than that in which the deposit pursuant to Section
1404(1) has been made in respect of such Security, or (b) a Conversion Event
occurs as contemplated in Section 312(d) or 312(e) or by the terms of any
Security in respect of which the deposit pursuant to Section 1404(1) has been
made, the indebtedness represented by such Security shall be deemed to have
been, and will be, fully discharged and satisfied through the payment of
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the principal of (premium, if any, on), and interest, if any, on such Security
as they become due out of the proceeds yielded by converting (from time to time
as specified below in the case of any such election) the amount or other
property deposited in respect of such Security into the Currency in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable Market Exchange Rate for such Currency in effect on the third
Business Day prior to each payment date, except, with respect to a Conversion
Event, for such Currency in effect (as nearly as feasible) at the time of the
Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1404 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Securities.
Anything in this Article Fourteen to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations (or other property and any proceeds therefrom)
held by it as provided in Section 1404 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
defeasance or covenant defeasance, as applicable, in accordance with this
Article.
SECTION 1406. Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in accordance
with Section 1405 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and such
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1402 or 1403, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 1405; provided, however, that if the Company makes any payment of
principal of (or premium, if any, on) or interest on any such Security following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
held by the Trustee or Paying Agent.
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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.
Seal
NORTHWESTERN PUBLIC SERVICE COMPANY
By:
----------------------------------------------------
Name:
Title:
Attest:
------------
Seal
THE CHASE MANHATTAN BANK (N.A.)
By:
----------------------------------------------------
Name:
Title:
Attest:
------------
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STATE OF )
COUNTY OF ) ss.:
On the day of ______, 1995, before me personally ______________________________
came to be known, who, being by me duly sworn, did depose and say that he is the
__________________________________ of Northwestern Public Service Company, one
of the corporations described in and which executed the above instrument; that
he knows the corporate seal of said corporation; that the seal affixed to the
said instrument is such corporation 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
seal Commission expires
STATE OF )
COUNTY OF ) SS.:
On the day of __________, 1995, before me personally _________________________
came to be known, who, being by me duly sworn, did depose and say that he is the
____________________ of _________________________, one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said instrument
is such corporation 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
seal Commission expires
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FORM OF SUPPLEMENTAL INDENTURE
TO BE USED IN CONNECTION WITH THE ISSUANCE OF
SUBORDINATED DEBT SECURITIES AND PREFERRED SECURITIES
FIRST SUPPLEMENTAL INDENTURE, dated as of ___________________,
1995 (this "First Supplemental Indenture"), between Northwestern
Public Service Company, a Delaware corporation (the "Company")
and The Chase Manhattan Bank (N.A.), as trustee (the "Trustee")
under the Indenture dated as of ________________, 1995 between
the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's
subordinated debt securities to be issued from time to time in
one or more series as might be determined by the Company under
the Indenture, in an unlimited aggregate principal amount which
may be authenticated and delivered as provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its
Securities to be known as its ________% Junior Subordinated
Deferrable Interest Debentures due __________ (the "Debentures"),
the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in
the Indenture and this First Supplemental Indenture;
WHEREAS, NWPS Capital Financing I, a Delaware statutory business
trust (the "Trust"), has offered to the public $___________
aggregate liquidation amount of its _____% Trust Preferred
Capital Securities (the "Preferred Securities"), representing
undivided beneficial interests in the assets of the Trust, and
proposes to invest the proceeds from such offering in $__________
aggregate principal amount of the Debentures; and
WHEREAS, the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture and all requirements
necessary to make this First Supplemental Indenture a valid
instrument in accordance with its terms and to make the
Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company
have been performed, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects;
NOW THEREFORE, in consideration of the purchase and acceptance of
the Debentures by the Holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and
substance of the Debentures and the terms, provisions and
conditions thereof, the Company covenants and agrees with the
Trustee as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning
when used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental
Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or
Article of this First Supplemental Indenture;
(e) headings are for convenience of reference only and do
not affect interpretation;
(f) the following terms have the meanings given to them in
the Declaration: (i) Business Day; (ii) Clearing
Agency; (iii) Delaware Trustee; (iv) Dissolution Tax
Opinion; (v) Investment Company Event; (vi) No
Recognition Opinion; (vii) Property Trustee; (viii)
Preferred Security Certificate; (ix) Regular Trustees;
(x) Special Event; and (xi) Tax Event; and
(g) the following terms have the meanings given to them in
this Section 1.1(g):
"Additional Interest" has the meaning specified in Section
2.5(c).
"Declaration" means the Amended and Restated Declaration of Trust
of NWPS Capital Financing I, a Delaware statutory business trust,
dated as of _______________, 1995, as amended or restated from
time to time.
"Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in
accordance with the Declaration, and the Debentures held by the
Property Trustee are to be distributed to the holders of the
Trust Securities issued by the Trust pro rata in accordance with
the Declaration.
"Extended Maturity Date" means, if the Company elects to extend
the Maturity Date in accordance with Section 2.2(b), the date
selected by the Company which is after the Scheduled Maturity
Date but before _______________.
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"Maturity Date" means the date on which the Debentures mature and
on which the principal shall be due and payable together with all
accrued and unpaid interest thereon including Compounded Interest
and Additional Interest, if any.
"Scheduled Maturity Date" means _______________.
"Senior Indebtedness" means with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A)
indebtedness of such obligor for money borrowed and (B)
indebtedness evidenced by securities, debentures, bonds or other
similar instruments issued by such obligor, including, without
limitation, all obligations under its General Mortgage and Deed
of Trust dated as of August 1, 1993 (the "New Mortgage") between
the Company and The Chase Manhattan Bank (National Association),
and the Indenture dated August 1, 1940 (the "First Mortgage")
between the Company and The Chase Manhattan Bank (National
Association) and C.J. Heinzelmann; (ii) all capital lease
obligations of such obligor; (iii) all obligations of such
obligor issued or assumed as the deferred purchase price of
property, all conditional sale obligations of such obligor and
all obligations of such obligor under any title retention
agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of such
obligor for the reimbursement on any letter of credit, banker's
acceptance, security purchase facility or similar credit
transaction; (v) all obligations of the type referred to in
clauses (i) through (iv) of other persons for the payment of
which such obligor is responsible or liable as obligor, guarantor
or otherwise; and (vi) all obligations of the type referred to in
clauses (i) through (v) of other persons secured by any lien on
any property or asset of such obligor (whether or not such
obligation is assumed by such obligor), except for (1) any such
indebtedness that is by its terms subordinated to or pari passu
with the Debentures, as the case may be, and (2) any indebtedness
between or among any obligor and its Affiliates, including all
other debt securities and guarantees in respect of those debt
securities, issued to (a) any other NWPS Trust, or a trustee of
such trust, and (b) any other trust or a trustee of such trust,
partnership or other entity affiliated with the Company which is
a financing vehicle of the Company ("Financing Entity") in
connection with an issuance of preferred securities by such
Financing Entity of preferred securities or other securities
which rank pari passu with or junior to the Preferred Securities.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized a series of Securities designated the
"_____% Junior Subordinated Deferrable Interest Debentures due
___________", limited in aggregate principal amount to $_________
million, which amount shall be as set forth in any written
Company Order for the authentication and delivery of Debentures
pursuant to Section 303 of the Indenture.
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SECTION 2.2. Maturity.
(a) The Maturity Date will be either:
(i) the Scheduled Maturity Date; or
(ii) if the Company elects to extend the Maturity Date
beyond the Scheduled Maturity Date in accordance
with Section 2.2(b), the Extended Maturity Date;
(b) the Company may at any time before the day which is 90
days before the Scheduled Maturity Date, elect to
extend the Maturity Date only once to the Extended
Maturity Date, provided that the following conditions
in this Section 2.2(b) are satisfied both at the date
the Company gives notice in accordance with Section
2.2(c) of its election to extend the Maturity Date and
at the Scheduled Maturity Date:
(i) the Company is not in bankruptcy or otherwise
insolvent;
(ii) the Company is not in default on any Securities
issued to the Trust or any trustee of the Trust in
connection with the issuance of Trust Securities
by the Trust;
(iii) the Company has made timely payments on the
Debentures for the immediately preceding 18
months without deferrals;
(iv) the Trust is not in arrears on payments of
Distributions on the Trust Securities issued by
it; and
(v) the Debentures are rated investment grade or the
equivalent by any one of Standard & Poor's Ratings
Group, Moody's Investors Service, Inc., Fitch
Investor Services, Duff & Phelps Credit Rating
Company or any other nationally recognized
statistical rating organization; and
(c) if the Company elects to extend the Maturity Date in
accordance with Section 2.2(b), the Company shall give
notice to Holders of the Debentures, the Property
Trustee, the Trust and the Trustee of the extension of
the Maturity Date and the Extended Maturity Date at
least 90 days before the Scheduled Maturity Date.
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Debentures shall be issued
as Registered Securities in fully registered certificated form
without interest coupons. Principal of and interest on
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the Debentures issued in certificated form will be payable, the
transfer of such Debentures will be registrable and such Debentures
will be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Trustee; provided,
however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall
appear in the Security Register. Notwithstanding the foregoing, so
long as the Holder of any Debentures is the Property Trustee, the
payment of the principal of and interest (including Compounded
Interest and Additional Interest, if any) on such Debentures held
by the Property Trustee will be made at such place and to such
account as may be designated by the Property Trustee.
SECTION 2.4. Global Debenture.
(a) In connection with a Dissolution Event:
(i) the Debentures in certificated form may be
presented to the Trustee by the Property Trustee
in exchange for a global Debenture in an aggregate
principal amount equal to all Outstanding
Debentures (a "Global Debenture"), to be
registered in the name of the Depository, or its
nominee, and delivered by the Trustee to the
Depository for crediting to the accounts of its
participants pursuant to the instructions of the
Regular Trustees. The Company upon any such
presentation shall execute a Global Debenture in
such aggregate principal amount and deliver the
same to the Trustee for authentication and
delivery in accordance with the Indenture and this
First Supplemental Indenture. Payments on the
Debentures issued as a Global Debenture will be
made to the Depository; and
(ii) if any Preferred Securities are held in non book-
entry certificated form, the Debentures in
certificated form may be presented to the Trustee
by the Property Trustee and any Preferred Security
Certificate which represents Preferred Securities
other than Preferred Securities held by the
Clearing Agency or its nominee ("Non Book-Entry
Preferred Securities") will be deemed to represent
beneficial interests in Debentures presented to
the Trustee by the Property Trustee having an
aggregate principal amount equal to the aggregate
liquidation amount of the Non Book-Entry Preferred
Securities until such Preferred Security
Certificates presented to the Security Registrar
for transfer or reissuance at which time such
Preferred Security Certificates will be cancelled
and a Debenture registered in the name of the
holder of the Preferred Security Certificate or
the transferee of the holder of such Preferred
Security Certificate, as the case may be, with an
aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Security
Certificate cancelled will be executed by the
Company and delivered to the Trustee for
authentication and
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delivery in accordance with the Indenture and
this First Supplemental Indenture. On issue of
such Debentures, Debentures with an equivalent
aggregate principal amount that were presented
by the Property Trustee to the Trustee will be
deemed to have been cancelled.
(b) A Global Debenture may be transferred, in whole but not
in part, only to another nominee of the Depositary, or
to a successor Depositary selected or approved by the
Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary or
if at any time the Depositary for such series shall no
longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, and a successor
Depositary for such series is not appointed by the
Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case
may be, the Company will execute, and, subject to
Article Two of the Indenture, the Trustee will
authenticate and deliver the Debentures in definitive
registered form without coupons, in authorized
denominations, and in an aggregate principal amount
equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. In addition,
the Company may at any time determine that the
Debentures shall no longer be represented by a Global
Debenture. In such event the Company will execute and
subject to a certificate evidencing such determination
by the Company, will authenticate and deliver the
Debentures in definitive registered form without
coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such
Global Debenture. Upon the exchange of the Global
Debenture for such Debentures in definitive registered
form without coupons, in authorized denominations, the
Global Debenture shall be cancelled by the Trustee.
Such Debentures in definitive registered form issued in
exchange for the Global Debenture shall be registered
in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such
Securities to the Depositary for delivery to the
Persons in whose names such Securities are so
registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest at the rate of _____%
per annum (the "Coupon Rate") from the original date of
issuance until the principal thereof becomes due and
payable, and on any overdue principal and (to the
extent that payment of such interest is enforceable
under applicable law) on any overdue installment of
interest at the Coupon Rate, compounded quarterly,
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payable (subject to the provisions of Article Four)
quarterly in arrears on March 31, June 30, September 30
and December 31 of each year (each, an "Interest
Payment Date"), commencing on _______________, 1995, to
the Person in whose name such Debenture or any
predecessor Debenture is registered, at the close of
business on the regular record date for such interest
installment, which, in respect of any Debentures of
which the Property Trustee is the Holder of or a Global
Debenture, shall be the close of business on the
Business Day next preceding that Interest Payment Date.
Notwithstanding the foregoing sentence, if the
Preferred Securities are no longer in book-entry only
form or if pursuant to the Indenture the Debentures are
not represented by a Global Debenture, the Company may
select a regular record date for such interest
installment which shall be any date at least one
Business Day before an Interest Payment Date.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve
30-day months. Except as provided in the following
sentence, the amount of interest payable for any period
shorter than a full quarterly period for which interest
in computed, will be computed on the basis of the
actual number of days elapsed in such a 30-day month.
In the event that any date on which interest is payable
on the Debentures is not a Business Day, then payment
of interest payable on such date will be made on the
next succeeding day which is a Business Day (and
without any interest or other payment in respect of any
such delay), 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.
(c) If at any time while the Property Trustee is the Holder
of any Debentures, the Trust or the Property Trustee is
required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any
other taxing authority, then, in any case, the Company
will pay as additional interest ("Additional Interest")
on the Debentures held by the Property Trustee, such
additional amounts as shall be required so that the net
amounts received and retained by the Trust and the
Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal
to the amounts the Trust and the Property Trustee would
have received had no such taxes, duties, assessments or
other government charges been imposed.
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ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Special Event Redemption.
If a Tax Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) after receiving a Dissolution Tax Opinion, the Regular
Trustees shall have been informed by tax counsel
rendering the Dissolution Tax Opinion that a No
Recognition Opinion cannot be delivered to the Trust,
then, notwithstanding Section 3.2(a) but subject to Section
3.2(b), the Company shall have the right upon not less than 30
days nor more than 60 days notice to the Holders of the
Debentures to redeem the Debentures in whole or in part for cash
within 90 days following the occurrence of such Tax Event (the
"90-Day Period"), provided that, if at the time there is
available to the Company the opportunity to eliminate within the
90-Day Period, the Tax Event by taking some ministerial action
("Ministerial Action"), such as filing a form or making an
election or pursuing some other similar reasonable measure which
has no adverse effect on the Company, the Trust or the Holders of
the Trust Securities issued by the Trust, the Company shall
pursue such Ministerial Action in lieu of redemption; and
provided, further, that the Company shall have no right to redeem
the Debentures while the Trust is pursuing any Ministerial Action
pursuant to its obligations under the Declaration. The
Redemption Price shall be paid prior to 12:00 noon, New York
time, on the date of such redemption or such earlier time as the
Company determines provided that the Company shall deposit with
the Trustee an amount sufficient to pay the Redemption Price by
10:00 a.m. on the date such Redemption Price is to be paid.
SECTION 3.2. Optional Redemption by Company.
(a) Subject to the provisions of Section 3.2(b) and to the
provisions of Article Eleven of the Indenture, except
as otherwise may be specified in this First
Supplemental Indenture, the Company shall have the
right to redeem the Debentures, in whole or in part,
from time to time, on or after _______________, at a
redemption price equal to 100% of the principal amount
to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption (the "Optional
Redemption Price"). Any redemption pursuant to this
paragraph will be made upon not less than 30 nor more
than 60 days' notice to the Holder of the Debentures,
at the Optional Redemption Price. If the Debentures
are only partially redeemed pursuant to this Section
3.2, the Debentures will be redeemed pro rata or by lot
or by any other method utilized by the Trustee;
provided that, if at the time of redemption the
Debentures are registered as a Global Debenture, the
Depository shall
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determine by lot the principal amount of such
Debentures held by each Holder of Debenture to
be redeemed. The Optional Redemption Price shall be
paid prior to 12:00 noon, New York time, on the date of
such redemption or at such earlier time as the Company
determines provided that the Company shall deposit with
the Trustee an amount sufficient to pay the Optional
Redemption Price by 10:00 a.m. on the date such
Optional Redemption Price is to be paid.
(b) If a partial redemption of the Debentures would result
in the delisting of the Preferred Securities issued by
the Trust from any national securities exchange or
other organization on which the Preferred Securities
are then listed, the Company shall not be permitted to
effect such partial redemption and may only redeem the
Debentures in whole.
SECTION 3.3. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking
fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Company shall have the right, at any time during the term of
the Debentures, from time to time to defer payments of interest
by extending the interest payment period of such Debentures for
up to 20 consecutive quarters (the "Extended Interest Payment
Period"). To the extent permitted by applicable law, interest,
the payment of which has been deferred because of the extension
of the interest payment period pursuant to this Section 4.1, will
bear interest thereon at the Coupon Rate compounded quarterly for
each quarter of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period
the Company shall pay all interest accrued and unpaid on the
Debentures, including any Additional Interest and Compounded
Interest ("Deferred Interest") that shall be payable, to the
Holders of the Debentures in whose names the Debentures are
registered in the Security Register on the first record date
after the end of the Extended Interest Payment Period. Before
the termination of any Extended Interest Payment Period, the
Company may further extend such period, provided that such period
together with all such further extensions thereof shall not
exceed 20 consecutive quarters. Upon the termination of any
Extended Interest Payment Period and upon the payment of all
Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an
Extended Interest Payment Period, except at the end thereof.
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SECTION 4.2. Notice of Extension.
(a) If the Property Trustee is the only registered Holder
of the Debentures at the time the Company selects an
Extended Interest Payment Period, the Company shall
give written notice to the Regular Trustees, the
Property Trustee and the Trustee of its selection of
such Extended Interest Payment Period one Business Day
before the earlier of (a) the next succeeding date on
which Distributions on the Trust Securities issued by
the Trust are payable, or (b) the date the Trust is
required to give notice of the record date or the date
such Distributions are payable to the New York Stock
Exchange or other applicable self-regulatory
organization or to holders of the Preferred Securities
issued by the Trust, but in any event at least one
Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the
Debentures at the time the Company selects an Extended
Interest Payment Period, the Company shall give the
Holders of the Debentures and the Trustee written
notice of its selection of such Extended Interest
Payment Period 10 Business Days before the earlier of
(i) the next succeeding Interest Payment Date, or (ii)
the date the Company is required to give notice of the
record or payment date of such interest payment to the
New York Stock Exchange or other applicable
self-regulatory organization or to Holders of the
Debentures.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be
counted as one of the 20 quarters permitted in the
maximum Extended Interest Payment Period permitted
under Section 4.1.
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the
Debentures to the Property Trustee in connection with the sale of
the Trust Securities by the Trust, the Company shall:
(a) pay for all costs and expenses relating to the
offering, sale and issuance of the Debentures,
including commissions to the underwriters payable
pursuant to the Underwriting Agreement and the Pricing
Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section
7.06 of the Indenture; and
(b) pay for all costs and expenses of the Trust (including,
but not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and
issuance of the Trust Securities (including commissions
to the underwriters in
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connection therewith), the fees and expenses of the
Property Trustee and the Delaware Trustee, the costs
and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping
services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expenses
and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust
assets); and (c) pay any and all taxes (other than
United States withholding taxes attributable to the
Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
ARTICLE VI
SUBORDINATION
SECTION 6.1. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Debentures
issued hereunder by such Holder's acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject
to the provisions of this Article Six; and each Holder of a
Debenture, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such
provisions. The payment by the Company of the principal of,
premium, if any, and interest on all Debentures issued hereunder
shall, to the extent and in the manner hereinafter set forth, be
subordinated and junior in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article Six shall prevent the occurrence of
any default or Event of Default hereunder.
SECTION 6.2. Default on Senior Indebtedness.
In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any
other payment due on any Senior Indebtedness of the Company, as
the case may be, or in the event that the maturity of any Senior
Indebtedness of the Company, as the case may be, has been
accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the
principal (including redemption and sinking fund payments) of, or
premium, if any, or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited
by the preceding paragraph of this Section 6.2, such payment
shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Indebtedness or their
respective representatives, or to the trustee or trustees under
any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear,
but only to the extent that the
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holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days
of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to
the Trustee shall be paid to the holders of Senior Indebtedness.
SECTION 6.3. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding-up or
liquidation or reorganization of the Company, whether voluntary
or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof
provided for in money in accordance with its terms, before any
payment is made by the Company on account of the principal (and
premium, if any) or interest on the Debentures; and upon any such
dissolution or winding-up or liquidation or reorganization, any
payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or
securities, to which the Holders of the Debenture or the Trustee
would be entitled to receive from the Company, except for the
provisions of this Article Six, shall be paid by the Company or
by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by
the Holders of the Debentures or by the Trustee under this
Indenture if received by them or it, directly to the holders of
Senior Indebtedness of the Company (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held
by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing
such Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay
such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of Debentures or
to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character,
whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Trustee before all Senior
Indebtedness of the Company is paid in full, or provision is made
for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior
Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been
issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior
Indebtedness of the Company, as the case may be, remaining unpaid
to the extent necessary to pay such Senior Indebtedness in full
in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of such
Senior Indebtedness.
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For purposes of this Article Six, 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, the payment of which is
subordinated at least to the extent provided in this Article Six
with respect to the Debentures to the payment of all Senior
Indebtedness of the Company, as the case may be, that may at the
time be outstanding, provided that (i) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any
such reorganization or readjustment, and (ii) the rights of the
holders of such Senior Indebtedness are not, without the consent
of such holders, altered by such reorganization or readjustment.
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 Eight of the Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 6.3 if such other corporation shall, as
a part of such consolidation, merger, conveyance or transfer,
comply with the conditions stated in Article Eight of the
Indenture. Nothing in Section 6.2 or in this Section 6.3 shall
apply to claims of, or payments to, the Trustee under or pursuant
to Section 606 of the Indenture.
SECTION 6.4. Subrogation.
Subject to the payment in full of all Senior Indebtedness of the
Company, the rights of the Holders of the Debentures shall be
subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash,
property or securities of the Company, as the case may be,
applicable to such Senior Indebtedness until the principal of
(and premium, if any) and interest on the Debentures shall be
paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the
Holders of the Debentures or the Trustee would be entitled except
for the provisions of this Article Six, and no payment over
pursuant to the provisions of this Article Six to or for the
benefit of the holders of such Senior Indebtedness by Holders of
the Debentures or the Trustee, shall, as between the Company, its
creditors other than Holders of Senior Indebtedness of the
Company, and the holders of the Debentures shall be deemed to be
a payment by the Company to or on account of such Senior
Indebtedness. It is understood that the provisions of this
Article Six are and are intended solely for the purposes of
defining the relative rights of the Holders of the Debentures, on
the one hand, and the holders of such Senior Indebtedness on the
other hand.
Nothing contained in this Article Six or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as
between the Company, its creditors other than the holders of
Senior Indebtedness of the Company, and the Holders of the
Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Debentures the
principal of (and premium, if any) and interest on the Debentures
as and when the same shall become due and payable in accordance
with their terms, or is intended
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to or shall affect the relative rights of the Holders of the
Debentures and creditors of the Company, as the case may be,
other than the holders of Senior Indebtedness of the Company, as
the case may be, nor shall anything herein or therein prevent
the Trustee or the Holder of any Debenture from exercising all
remedies otherwise permitted by applicable law upon default
under the Indenture, subject to the rights, if any, under this
Article Six of the holders of such Senior Indebtedness in
respect of cash, property or securities of the Company, as the
case may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article Six, the Trustee, subject to the
provisions of Section 602 of the Indenture, and the Holders of
the Debentures shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization
proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or
to the Holders of the Debentures, for the purposes of
ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, as the case may be, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Article Six.
SECTION 6.5. Trustee to Effectuate Subordination.
Each Holder of Debentures by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article Six and appoints the
Trustee such Holder's attorney-in-fact for any and all such
purposes.
SECTION 6.6. Notice by the Company.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that
would prohibit the making of any payment of monies to or by the
Trustee in respect of the Debentures pursuant to the provisions
of this Article Six. Notwithstanding the provisions of this
Article Six or any other provision of the Indenture and this
First Supplemental Indenture, the Trustee shall not be charged
with knowledge of the existence of any facts that would prohibit
the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of this
Article Six, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the
Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and before the receipt of any such written
notice, the Trustee, subject to the provisions of Section 602 of
the Indenture, shall be entitled in all respects to assume that
no such facts exist; provided, however, that, if the Trustee
shall not have received the notice provided for in this Section
6.6 at least two Business Days prior to the date upon which by
the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of
(or premium, if any) or interest on any
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<PAGE>
Debenture), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for
which they were received, and shall not be affected by any
notice to the contrary that may be received by it within two
Business Days prior to such date.
The Trustee, subject to the provisions of Section 602 of the
Indenture, shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of
Senior Indebtedness of the Company, as the case may be (or a
trustee on behalf of such holder) to establish that such notice
has been given by a holder of such Senior Indebtedness or a
trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence
is required with respect to the right of any Person as a holder
of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article Six, the Trustee may
request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this
Article Six, and, if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such
payment.
SECTION 6.7. Rights of the Trustee; Holders of Senior
Indebtedness.
The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article Six in respect of any Senior
Indebtedness at any time held by it, to the same extent as any
other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such
holder.
With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only
such of its covenants and obligations as are specifically set
forth in this Article Six, and no implied covenants or
obligations with respect to the holders of such 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 such Senior Indebtedness and, subject to
the provisions of Section 602 of the Indenture, the Trustee shall
not be liable to any holder of such Senior Indebtedness if it
shall pay over or deliver to Holders of Debentures, the Company
or any other Person money or assets to which any holder of such
Senior Indebtedness shall be entitled by virtue of this Article
Six or otherwise.
SECTION 6.8. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired
by any act or failure to act on the part of the Company, as the
case may be, or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the
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<PAGE>
Company, as the case may be, with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof
that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may,
at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Debentures, without
incurring responsibility to the Holders of the Debentures and
without impairing or releasing the subordination provided in this
Article Six or the obligations hereunder of the Holders of the
Debentures to the holders of such Senior Indebtedness, do any one
or more the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any
manner such Senior Indebtedness or any instrument evidencing the
same or any agreement under which such Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such Senior
Indebtedness; (iii) release any Person liable in any manner for
the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company, as the
case may be, and any other Person.
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. Listing on an Exchange.
If the Debentures are to be issued as a Global Debenture in
connection with the distribution of the Debentures to the holders
of the Preferred Securities issued by the Trust upon a
Dissolution Event, the Company will use its best efforts to list
such Debentures on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed.
ARTICLE VIII
FORM OF DEBENTURE
SECTION 8.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to
be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT: This
Debenture is a Global Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name
of a Depository or a nominee of a Depository. This Debenture is
exchangeable for Debentures registered in the name of a person
other than
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<PAGE>
the Depository or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture
(other than a transfer of this Debenture as a whole by the
Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street,
New York, New York) to the issuer or its agent for registration
of transfer, exchange or payment, and any Debenture issued is
registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co.,
has an interest herein.]
No._________________
$___________________
[CUSIP No.__________]
____% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE __________
Northwestern Public Service Company, a Delaware corporation (the
"Company", which term includes any successor corporation under
the Indenture hereinafter referred to), for value received,
hereby promises to pay to , or registered assigns, the principal
sum of _______ Dollars on _______________, (or on such later date
before _______________, if the Company elects to extend the
maturity date as further described herein), and to pay interest
on said principal sum from _______________, 1995, or from the
most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided
for, quarterly (subject to deferral as set forth herein) in
arrears on March 31, June 30, September 30 and December 31 of
each year commencing _______________, 1995, at the rate of _____%
per annum until the principal hereof shall have become due and
payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded
quarterly. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which
interest is payable on this Debenture is not a Business Day, then
payment of interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if
such Business Day 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. The interest installment so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose
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<PAGE>
name this Debenture (or one or more Predecessor Debentures, as
defined in said Indenture) is registered at the close of
business on the regular record date for such interest
installment, which shall be the close of business on the
business day next preceding such Interest Payment Date. Any
such interest installment not punctually paid or duly provided
for shall forthwith cease to be payable to the registered
Holders on such regular record date and may be paid to the
Person in whose name this Debenture (or one or more Predecessor
Debentures) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the
registered Holders of this series of Debentures not less than 10
days prior to such special record date, or may be paid at any
time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures
may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. The
principal of (and premium, if any) and the interest on this
Debenture shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of
the United States of America that at the time of payment is
legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of
the Company by check mailed to the registered Holder at such
address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of this
Debenture is the Property Trustee, the payment of the principal
of (and premium, if any) and interest on this Debenture will be
made at such place and to such account as may be designated by
the Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness,
and this Debenture is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her
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 or her attorney-in-fact for any and all
such purposes. Each Holder hereof, by his or her 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.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory
for any purpose until the Certificate of Authentication hereon
shall have been signed by or on behalf of the Trustee.
Unless the Certificate of Authentication hereon has been executed
by the Trustee referred to on the reverse side hereof, this
Debenture shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
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<PAGE>
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated:_______________
NORTHWESTERN PUBLIC SERVICE COMPANY
By:__________________________________
Attest:
By:___________________
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
___________________________
as Trustee or as Authentication Agent
By:________________________ By:___________________________
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures
of the Company (herein sometimes referred to as the
"Debentures"), specified in the Indenture, all issued or to be
issued in one or more series under and pursuant to an Indenture
dated as of _______________, 1995, duly executed and delivered
between the Company and ____________________, as Trustee (the
"Trustee"), as supplemented by the First
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<PAGE>
Supplemental Indenture dated as of _______________, 1995,
between the Company and the Trustee (the Indenture as so
supplemented, the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and
the Holders of the Debentures. By the terms of the Indenture,
the Debentures are issuable in series that may vary as to
amount, date of maturity, rate of interest and in other respects
as provided in the Indenture. This series of Debentures is
limited in aggregate principal amount as specified in said First
Supplemental Indenture.
Because of the occurrence and continuation of a Tax Event, in
certain circumstances, this Debenture will become due and payable
at the principal amount together with any interest accrued
thereon (the "Redemption Price"). The Redemption Price shall be
paid prior to 12:00 noon, New York time, on the date of such
redemption or at such earlier time as the Company determines.
The Company shall have the right to redeem this Debenture at the
option of the Company, without premium or penalty, in whole or in
part at any time on or after _______________, (an "Optional
Redemption") or at any time in certain circumstances upon the
occurrence of a Tax Event, at a redemption price equal to 100% of
the principal amount plus any accrued but unpaid interest, to the
date of such redemption (the "Optional Redemption Price"). Any
redemption pursuant to this paragraph will be made upon not less
than 30 nor more than 60 days' notice, at the Optional Redemption
Price. If the Debentures are only partially redeemed by the
Company pursuant to an Optional Redemption, the Debentures will
be redeemed pro rata or by lot or by any other method utilized by
the Trustee; provided that if, at the time of redemption, the
Debentures are registered as a Global Debenture, the Depository
shall determine by lot the principal amount of such Debentures
held by each Debentureholder to be redeemed.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal of all of the
Debentures may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Debentures of each
series affected at the time outstanding, as defined in the
Indenture, to execute supplemental indentures for the purpose of
adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders
of the Debentures; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Debentures
of any series, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, or
reduce any premium payable upon the
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<PAGE>
redemption thereof, without the consent of the Holder of each
Debenture so affected, or (ii) reduce the aforesaid percentage
of Debentures, the Holders of which are required to consent to
any such supplemental indenture, without the consent of the
Holders of each Debenture then outstanding and affected thereby.
The Indenture also contains provisions permitting the Holders
of a majority in aggregate principal amount of the Debentures of
any series at the time outstanding affected thereby, on behalf
of all of the Holders of the Debentures of such series, to waive
any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences,
except a default in the payment of the principal of or premium,
if any, or interest on any of the Debentures of such series.
Any such consent or waiver by the registered Holder of this
Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future
Holders and owners of this Debenture and of any Debenture issued
in exchange herefor or in place hereof (whether by registration
of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and premium, if any, and interest on this
Debenture at the time and place and at the rate and in the money
herein prescribed.
The Company shall have the right at any time during the term of
the Debentures from time to time to extend the interest payment
period of such Debentures to up to 20 consecutive quarters (an
"Extended Interest Payment Period"), at the end of which period
the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the
Debentures to the extent that payment of such interest is
enforceable under applicable law). Before the termination of any
such Extended Interest Payment Period, the Company may further
extend such Extended Interest Payment Period, provided that such
Extended Interest Payment Period together with all such further
extensions thereof shall not exceed 20 consecutive quarters. At
the termination of any such Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest and any
additional amounts then due, the Company may commence a new
Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the
registered Holder hereof on the Security Register of the Company,
upon surrender of this Debenture for registration of transfer at
the office or agency of the Company in the City and State of New
York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly
executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures
of authorized denominations and for the same aggregate principal
amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such
transfer, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in relation
thereto.
-21-
<PAGE>
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any
Security Registrar may deem and treat the registered holder
hereof as the absolute owner hereof (whether or not this
Debenture shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the
Security Registrar) for the purpose of receiving payment of or on
account of the principal hereof and premium, if any, and interest
due hereon and for all other purposes, and neither the Company
nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration
for the issuance hereof, expressly waived and released.
The Debentures 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 herein and therein set forth, Debentures of
this series so issued are exchangeable for a like aggregate
principal amount of Debentures of this series of a different
authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Debenture that are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
ARTICLE IX
ORIGINAL ISSUE OF DEBENTURES
SECTION 9.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $__________ may,
upon execution of this First Supplemental Indenture, be executed
by the Company and delivered to the Trustee for authentication, and
the Trustee shall thereupon authenticate and deliver said
Debentures to or upon the written order of the Company, signed by
its Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action
by the Company.
-22-
<PAGE>
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Ratification of Indenture.
The Indenture, as supplemented by this First Supplemental
Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein
provided.
SECTION 10.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by
the Trustee, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representation as to
the validity or sufficiency of this First Supplemental Indenture.
SECTION 10.3. Governing Law.
This First Supplemental Indenture and each Debenture shall be
deemed to be a contract made under the internal laws of the State
of New York, and for all purposes shall be construed in
accordance with the laws of said State.
SECTION 10.4. Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason
be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect
any other provisions of this First Supplemental Indenture or of
the Debentures, but First Supplemental Indenture and the
Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or
therein.
SECTION 10.5. Counterparts.
This First Supplemental Indenture may be executed in any number
of counterparts each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, on the date
or dates indicated in the acknowledgements and as of the day and
year first above written.
NORTHWESTERN PUBLIC SERVICE COMPANY
By:________________________________
Name:
Title:
Attest:__________________
Secretary
THE CHASE MANHATTAN BANK (N.A.)
By:_________________________________
Name:
Title:
Attest:___________________
Secretary
-24-
<PAGE>
STATE OF )
COUNTY OF ) ss.:
On the day of __________, 1995, before me personally
________________________________ came to be known, who, being by
me duly sworn, did depose and say that he is the
__________________________________ of Northwestern Public
Service Company, one of the corporations described in and which
executed the above instrument; that he knows the corporate seal
of said corporation; that the seal affixed to the said
instrument is such corporation 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
seal Commission expires
STATE OF )
COUNTY OF ) SS.:
On the day of _______________, 1995, before me personally
_____________________________came to be known, who, being by me
duly sworn, did depose and say that he is the
____________________ of _________________________, one of the
corporations described in and which executed the above
instrument; that he knows the corporate seal of said
corporation; that the seal affixed to the said instrument is
such corporation 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
seal Commission expires
-25-
<PAGE>
FORM OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
<PAGE>
NWPS CAPITAL FINANCING I
Cross-Reference Table
for the Guarantee Agreement
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
- ------------------- ----------
Section 310(a) . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . . . . . . . . . .4.1(c), 2.8
310(c) . . . . . . . . . . . . . . . . . . Not Applicable
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . Not Applicable
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313. . . . . . . . . . . . . . . . . . . . . . . . . .2.3
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . .2.4
314(b) . . . . . . . . . . . . . . . . . . Not Applicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . .2.5
314(d) . . . . . . . . . . . . . . . . . . Not Applicable
314(e) . . . . . . . . . . . . . . . . . . . . . 2.5, 3.2
314(f) . . . . . . . . . . . . . . . . . . . . . 2.1, 3.2
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
315(b) . . . . . . . . . . . . . . . . . . . . . . . .2.7
315(c) . . . . . . . . . . . . . . . . . . . . . . . .3.1
315(d) . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
Section 316(a) . . . . . . . . . . . . . . . . . . . .5.4(a), 2.6
316(b) . . . . . . . . . . . . . . . . . . . . . . . .5.3
316(c) . . . . . . . . . . . . . . . . . . . . . . . .2.2
Section 317(a) . . . . . . . . . . . . . . . . . . Not Applicable
317(b) . . . . . . . . . . . . . . . . . . Not Applicable
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . .2.1
318(c) . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
- ----------
Note: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Guarantee Agreement.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions and Interpretation
Page
----
SECTION 1.1. Definitions and Interpretation . . . . . . . . . . . .2
Affiliate. . . . . . . . . . . . . . . . . . . . . . .2
Common Securities. . . . . . . . . . . . . . . . . . .2
Covered Person . . . . . . . . . . . . . . . . . . . .2
Event of Default . . . . . . . . . . . . . . . . . . .2
Guarantee Payments . . . . . . . . . . . . . . . . . .2
Holder . . . . . . . . . . . . . . . . . . . . . . . .3
Indemnified Person . . . . . . . . . . . . . . . . . .3
Indenture. . . . . . . . . . . . . . . . . . . . . . .3
Majority in Liquidation amount of the Securities . . .3
Officers' Certificate. . . . . . . . . . . . . . . . .3
Person . . . . . . . . . . . . . . . . . . . . . . . .4
Preferred Guarantee Trust. . . . . . . . . . . . . . .4
Responsible Officer. . . . . . . . . . . . . . . . . .4
Successor Preferred Guarantee Trustee. . . . . . . . .4
Trust Indenture Act. . . . . . . . . . . . . . . . . .4
ARTICLE II
Trust Indenture Act
SECTION 2.1. Trust Indenture Act; Application . . . . . . . . . . .5
SECTION 2.2. Lists of Holders of Securities . . . . . . . . . . . .5
SECTION 2.3. Reports by the Preferred Trust Guarantee . . . . . . .5
SECTION 2.4. Periodic Reports to Preferred Guarantee Trustee. . . .5
SECTION 2.5. Evidence of Compliance with Conditions Precedent . . .6
SECTION 2.6. Event of Default; Waiver . . . . . . . . . . . . . . .6
SECTION 2.7. Event of Default; Notice . . . . . . . . . . . . . . .6
SECTION 2.8. Conflicting Interests. . . . . . . . . . . . . . . . .7
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Note: This table of contents shall not, for any purpose, be deemed
to be a part of the Guarantee Agreement.
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<PAGE>
ARTICLE III
Powers, Duties, Rights of
Preferred Guarantee Trustee
Page
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SECTION 3.1. Powers and Duties of the Preferred Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . .7
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee. . . . .9
SECTION 3.3. Not Responsible for Recitals or Issuance of
Guarantee . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
Preferred Guarantee Trustee
SECTION 4.1. Preferred Guarantee Trustee; Eligibility . . . . . . 11
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustees. . . . . . . . . . 12
ARTICLE V
Guarantee
SECTION 5.1. Guarantee. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2. Waiver of Notice and Demand. . . . . . . . . . . . . 13
SECTION 5.3. Obligations Not Affected . . . . . . . . . . . . . . 13
SECTION 5.4. Rights of Holders. . . . . . . . . . . . . . . . . . 14
SECTION 5.5. Guarantee of Payment . . . . . . . . . . . . . . . . 15
SECTION 5.6. Subrogation. . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7. Independent Obligations. . . . . . . . . . . . . . . 15
ARTICLE VI
Limitations of Transactions; Subordination
SECTION 6.1. Limitation of Transactions . . . . . . . . . . . . . 15
SECTION 6.2. Ranking. . . . . . . . . . . . . . . . . . . . . . . 16
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Note: This table of contents shall not, for any purpose, be deemed
to be a part of the Guarantee Agreement.
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<PAGE>
ARTICLE VII
Termination
Page
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SECTION 7.1. Termination. . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII
Indemnification
SECTION 8.1. Exculpation. . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.2. Indemnification. . . . . . . . . . . . . . . . . . . 17
ARTICLE IX
Miscellaneous
SECTION 9.1. Successors and Assigns . . . . . . . . . . . . . . . 18
SECTION 9.2. Amendments . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.3. Notices. . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.4. Benefit. . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.5. Governing Law. . . . . . . . . . . . . . . . . . . . 19
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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Note: This table of contents shall not, for any purpose, be deemed
to be a part of the Guarantee Agreement.
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<PAGE>
FORM OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
Dated as of __________, 1995
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
_______, 1995, is executed and delivered by Northwestern Public
Service Company, a Delaware corporation (the "Guarantor"), and
Wilmington Trust Company, a Delaware banking corporation, not in
its individual capacity but solely as trustee (the "Preferred
Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as
defined herein) of NWPS Capital Financing I, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of _________, 1995, among
the trustees of the Issuer named therein, the Guarantor as
Sponsor and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof $__________ aggregate stated
liquidation amount of Preferred Securities designated the ___%
Trust Preferred Capital Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this
Guarantee Agreement, to pay to the Holders of the Preferred
Securities the Guarantee Payments (as defined herein) and to
make certain other payments on the terms and conditions set
forth herein;
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee
Agreement") in substantially identical terms to this Guarantee
Agreement for the benefit of the holders of the Common
Securities (as defined herein) except that if an Event of
Default (as defined in the Indenture (as defined herein)), has
occurred and is continuing, the rights of holders of the Common
Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders
of Preferred Securities to receive Guarantee Payments under this
Guarantee Agreement;
NOW, THEREFORE, in consideration of the purchase by each Holder
of Preferred Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Guarantee Agreement for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but
not defined in the preamble above or otherwise in this
Guarantee Agreement have the respective meanings
assigned to them in the Declaration as in effect on
the date hereof;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as
modified, supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this
Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless
otherwise defined in this Guarantee Agreement or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 promulgated under the Securities Act of 1933, as amended, or
any successor rule thereunder.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the
Preferred Securities, to the extent not paid or made by the
Issuer: (i) any accrued and unpaid Distributions (as defined in
the Declaration) that are required to be paid on such Preferred
Securities to the extent the
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Company has made a payment of interest
or principal on the Subordinated Debt Securities (ii) the
redemption price, including all accrued and unpaid Distributions
to the date of redemption (the "Redemption Price") to the extent
the Company has made a payment of interest or principal on the
Subordinated Debt Securities, with respect to any Preferred
Securities called for redemption by the Issuer, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Preferred Securities as
provided in the Declaration or a redemption of all the Preferred Securities
upon the maturity or redemption of the Subordinated Debt Securities), the
lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Preferred Securities to the date of payment to
the extent the Issuer has funds legally available therefor, and (b) the amount
of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer (in either case, the "Liquidation Distribution").
If an event of default under the Indenture has occurred and is
continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement
are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under the Preferred
Securities Guarantee Agreement.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Preferred Securities; provided,
however, that, in determining whether the holders of the
requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees,
representatives or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of __________, 1995,
among the Guarantor (the "Debenture Issuer") and The Chase
Manhattan Bank (N.A.), as trustee and any indenture supplemental
thereto pursuant to which certain subordinated debt securities
of the Debenture Issuer are to be issued to the Property Trustee
of the Issuer.
"Majority in liquidation amount of the Securities" means, except
as provided by the Trust Indenture Act, a vote by Holder(s) of
Preferred Securities, voting separately as a class, of more than
50% of the liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person.
Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Guarantee
Agreement shall include:
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(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer
in rendering the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express
an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied
with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Preferred Guarantee Trustee" means Wilmington Trust Company, in
its capacity as trustee hereunder and not in its individual
capacity, until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the
terms of this Guarantee Agreement and thereafter means each such
Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any vice-president, any assistant
vice-president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Corporate
Trust Department of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the
above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act
as Preferred Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions
of the Trust Indenture Act that are required to be part
of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with
the duties imposed by Section 310 to 317, inclusive, of
the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. Lists of Holders of Securities.
(a) The Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred
Guarantee Trustee may reasonably require, of the name
and addresses of the Holders of the Preferred
Securities ("List of Holders") as of such date, (i)
within 14 days after January 1 and June 30 of each
year, and (ii) at any other time within 30 days of
receipt by the Guarantor of a written request for a
List of Holders as of a date no more than 14 days
before such List of Holders is given to the Preferred
Guarantee Trustee, provided that the Guarantor shall
not be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most
recent List of Holders given to the Preferred Guarantee
Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section
312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Preferred Guarantee Trustee.
Within 60 days after May 15 of each year, the Preferred
Guarantee Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The
Preferred Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Preferred Guarantee Trustee.
The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section
314 (if any) and the compliance certificate required
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by Section 314 of the Trust Indenture Act in the form, in the
manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if
any, provided for in this Guarantee Agreement that relate to any
of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given
by an officer pursuant to Section 314(c)(1) may be given in the
form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 2.7. Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit
by mail, first class postage prepaid, to the Holders of
the Preferred Securities, notices of all Events of
Default known to the Preferred Guarantee Trustee,
unless such defaults have been cured before the giving
of such notice, provided that the Preferred Guarantee
Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or
Responsible Officers of the Preferred Guarantee Trustee
in good faith determines that the withholding of such
notice is in the interests of the Holders of the
Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the
Preferred Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the
administration of the Declaration shall have obtained
written notice, of such Event of Default.
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<PAGE>
SECTION 2.8 Conflicting Interests.
The Declaration shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture
Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Preferred Guarantee
Trustee.
(a) This Guarantee Agreement shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the
Preferred Securities, and the Preferred Guarantee
Trustee shall not transfer this Guarantee Agreement to
any Person except a Holder of Preferred Securities
exercising his or her rights pursuant to Section 5.4(b)
or to a Successor Preferred Guarantee Trustee on
acceptance by such Successor Preferred Guarantee
Trustee of its appointment to act as Successor
Preferred Guarantee Trustee. The right, title and
interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee
Trustee, and such vesting and cessation of title shall
be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment
of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing,
the Preferred Guarantee Trustee shall enforce this
Guarantee Agreement for the benefit of the Holders of
the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence
of any Event of Default and after the curing of all
Events of Default that may have occurred, shall
undertake to perform only such duties as are
specifically set forth in this Guarantee Agreement, and
no implied covenants shall be read into this Guarantee
Agreement against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6), the
Preferred Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct
of his or her own affairs.
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(d) No provision of this Guarantee Agreement shall be
construed to relieve the Preferred Guarantee Trustee
from liability for its own negligent action, its own
negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of
Default and after the curing or waiving of
all such Events of Default that may have
occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely
by the express provisions of this Guarantee
Agreement, and the Preferred Guarantee
Trustee shall not be liable except for the
performance of such duties and obligations as
are specifically set forth in this Guarantee
Agreement, and no implied covenants or
obligations shall be read into this Guarantee
Agreement against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of
the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and
the correctness of the opinions expressed
therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee
and conforming to the requirements of this
Guarantee Agreement; but in the case of any
such certificates or opinions that by any
provision hereof are specifically required to
be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee
shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Declaration;
(ii) the Preferred Guarantee Trustee shall not be
liable for any error of judgment made in good
faith by a Responsible Officer of the Preferred
Guarantee Trustee, unless it shall be proved that
the Preferred Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Preferred Guarantee Trustee shall not be
liable with respect to any action taken or
omitted to be taken by it in good faith in
accordance with the direction of the Holders
of not less than a Majority in liquidation
amount of the Preferred Securities relating
to the time, method and place of conducting
any proceeding for any remedy available to
the Preferred Guarantee Trustee, or
exercising any trust or power conferred upon
the Preferred Guarantee Trustee under this
Guarantee Agreement; and
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(iv) no provision of this Guarantee Agreement shall
require the Preferred Guarantee Trustee to expend
or risk its own funds or otherwise incur personal
financial liability in the performance of any of
its duties or in the exercise of any of its rights
or powers, if the Preferred Guarantee Trustee
shall have reasonable grounds for believing that
the repayment of such funds or liability is not
reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity such
risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) the Preferred Guarantee Trustee may rely and shall
be fully protected in acting or refraining from
acting upon any resolution, certificate,
statement, instrument, opinion, report, notice,
request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or
other paper or document believed by it to be
genuine and to have been signed, sent or presented
by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated
by this Guarantee Agreement shall be sufficiently
evidenced by a Direction or an Officers'
Certificate;
(iii) whenever, in the administration of this
Guarantee Agreement, the Preferred Guarantee
Trustee shall deem it desirable that a matter
be proved or established before taking,
suffering or omitting any action hereunder,
the Preferred Guarantee Trustee (unless other
evidence is herein specifically prescribed)
may, in the absence of bad faith on its part,
request and rely upon an Officers'
Certificate which, upon receipt of such
request, shall be promptly delivered by the
Guarantor;
(iv) the Preferred Guarantee Trustee shall have no duty
to see to any recording, filing or registration of
any instrument (or any rerecording, refiling or
registration thereof);
(v) the Preferred Guarantee Trustee may consult with
counsel, and the written advice or opinion of such
counsel with respect to legal matters shall be
full and complete authorization and protection in
respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance
with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The
Preferred Guarantee Trustee shall have the
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right at any time to seek instructions concerning
the administration of this Guarantee Agreement
from any court of competent jurisdiction;
(vi) the Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such
Holder shall have provided to the Preferred
Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in
the position of the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be
incurred by it in complying with such request or
direction, including such reasonable advances as
may be requested by the Preferred Guarantee
Trustee; provided that, nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence
of an Event of Default, of its obligation to
exercise the rights and powers vested in it by
this Guarantee Agreement;
(vii) the Preferred Guarantee Trustee shall not be
bound to make any investigation into the
facts or matters stated in any resolution,
certificate, statement, instrument, opinion,
report, notice, request, direction, consent,
order, bond, debenture, note, other evidence
of indebtedness or other paper or document,
but the Preferred Guarantee Trustee, in its
discretion, may make such further inquiry or
investigation into such facts or matters as
it may see fit;
(viii) the Preferred Guarantee Trustee may execute
any of the trusts or powers hereunder or
perform any duties hereunder either directly
or by or through agents or attorneys, and the
Preferred Guarantee Trustee shall not be
responsible for any misconduct or negligence
on the part of any agent or attorney
appointed with due care by it hereunder;
(ix) any action taken by the Preferred Guarantee
Trustee or its agents hereunder shall bind the
Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or
its agents alone shall be sufficient and effective
to perform any such action. No third party shall
be required to inquire as to the authority of the
Preferred Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of
this Guarantee Agreement, both of which shall be
conclusively evidenced by the Preferred Guarantee
Trustee's or its agent's taking such action; and
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(x) whenever in the administration of this Guarantee
Agreement the Preferred Guarantee Trustee shall
deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking
any other action hereunder, the Preferred
Guarantee Trustee (i) may request instructions
from the Holders of the Preferred Securities, (ii)
may refrain from enforcing such remedy or right or
taking such other action until such instructions
are received, and (iii) shall be protected in
acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be
deemed to impose any duty or obligation on the
Preferred Guarantee Trustee to perform any act or acts
or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which
it shall be illegal, or in which the Preferred
Guarantee Trustee shall be unqualified or incompetent
in accordance with applicable law, to perform any such
act or acts or to exercise any such right, power, duty
or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be
construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee.
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The
Preferred Guarantee Trustee makes no representation as to the
validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. Preferred Guarantee Trustee; Eligibility.
(a) There shall at all times be a Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or
any State or Territory thereof or of the District
of Columbia, or a corporation or Person permitted
by the Securities and Exchange Commission to act
as an institutional trustee under the Trust
Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision
or examination by Federal, State, Territorial or
District of Columbia
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authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to
the requirements of the supervising or examining
authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined
capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as
set forth in its most recent report of condition
so published.
(b) If at any time the Preferred Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a),
the Preferred Guarantee Trustee shall immediately
resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of
Section 310(b) of the Trust Indenture Act, the
Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustees.
(a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at
any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor
Preferred Guarantee Trustee has been appointed and has
accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee
and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office
shall hold office until a Successor Preferred Guarantee
Trustee shall have been appointed or until its removal
or resignation. The Preferred Guarantee Trustee may
resign from office (without need for prior or
subsequent accounting) by an instrument in writing
executed by the Preferred Guarantee Trustee and
delivered to the Guarantor, which resignation shall not
take effect until a Successor Preferred Guarantee
Trustee has been appointed and has accepted such
appointment by instrument in writing executed by such
Successor Preferred Guarantee Trustee and delivered to
the Guarantor and the resigning Preferred Guarantee
Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have
been appointed and accepted appointment as provided in
this Section 4.2 within 60 days after delivery to the
Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition a
court of competent jurisdiction for appointment of a
Successor Preferred Guarantee Trustee. Such court may
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<PAGE>
thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Preferred
Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim that
the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or
may apply, presentment, demand for payment, any right to require
a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices
and demands.
SECTION 5.3. Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time
of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the
Issuer of any express or implied agreement, covenant,
term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Redemption
Price, Liquidation Distribution or any other sums
payable under the terms of the Preferred Securities or
the extension of time for the performance of any other
obligation under, arising out of, or in connection
with, the Preferred Securities (other than an extension
of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that
results from the extension of any interest payment
period on
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<PAGE>
the Debentures or any extension of the maturity date of
the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise
any right, privilege, power or remedy conferred on the
Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3
that the obligations of the Guarantor hereunder shall
be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with
respect to the happening of any of the foregoing.
SECTION 5.4. Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any
remedy available to the Preferred Guarantee Trustee in
respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Preferred Guarantee
Trustee under this Guarantee Agreement.
(b) If the Preferred Guarantee Trustee fails to enforce
this Guarantee Agreement, any Holder of Preferred
Securities may, after such Holder's written request to
the Preferred Guarantee Trustee to enforce this
Guarantee Agreement, institute a legal proceeding
directly against the Guarantor to enforce its rights
under this Guarantee Agreement, without first
instituting a legal proceeding against the Issuer, the
Preferred Guarantee Trustee or any other Person.
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<PAGE>
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not
of collection. The Guarantor agrees that this Guarantee
Agreement shall not be discharged except by payment of the
Guarantee Payments in full and by complete performance of all
obligations of the Guarantor contained in this Guarantee
Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of
any amounts paid to such Holders by the Guarantor under this
Guarantee Agreement; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this
Guarantee Agreement, if, at the time of any such payment, any
amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the
Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding
the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default, or an Event of Default
under the Declaration, or if the Guarantor has given notice of
its selection of an Extension Period (as defined in the
Indenture) and such period or any extension thereof, is
continuing, then, in each case, (a) the Guarantor shall not
declare or pay any dividend on, or make any distribution with
respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock and (b) the
Guarantor shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Guarantor which rank pari passu with or
junior to the Debentures; provided that the
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<PAGE>
foregoing restriction in this Section 6.1 (a) shall not apply to
any stock dividends paid by the Guarantor where the dividend stock
is the same stock as that on which the dividend is being paid or
to any payment on this Guarantee. In addition, so long as any
Preferred Securities remain outstanding, the Guarantor (i) will
remain the sole direct or indirect owner of all the outstanding
Common Securities and shall not cause or permit the Common
Securities to be transferred except to the extent such transfer
is permitted under the Declaration, provided that any permitted
successor of the Guarantor under the Indenture may succeed to
the Guarantor's ownership of the Common Securities and (ii) will
use its reasonable efforts to cause the Trust to continue to be
treated as a grantor trust for United States federal income tax
purposes except in connection with a distribution of Debentures.
SECTION 6.2. Ranking.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the
Guarantor, including the Debentures, (ii) pari passu with the
most senior preferred or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate upon (i) full payment of
the Redemption Price of all Securities, (ii) the distribution of
the Debentures to the Holders of all of the Preferred Securities
or (iii) full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any
time any Holder of Preferred Securities must restore payment of
any sums paid under the Preferred Securities or under this
Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or
any Covered Person for any loss, damage or claim
incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in
accordance with this Guarantee
-16-
<PAGE>
Agreement and in a manner that such Indemnified Person
reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this
Guarantee Agreement or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor
and upon such information, opinions, reports or
statements presented to the Guarantor by any Person as
to matters the Indemnified Person reasonably believes
are within such other Person's professional or expert
competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including
information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to
Holders of Preferred Securities might properly be paid.
SECTION 8.2. Indemnification.
(a) To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage or
claim incurred by such Indemnified Person by reason of
any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with
this Guarantee Agreement and in a manner such
Indemnified Person reasonably believed to be within the
scope of authority conferred on such Indemnified Person
by this in accordance with this Guarantee Agreement,
except that no Indemnified Person shall be entitled to
be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such
acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an
Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final
disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person
to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as
authorized in Section 8.2(a).
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<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then
outstanding.
SECTION 9.2. Amendments.
Except with respect to any changes that do not materially
adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Guarantee Agreement may only
be amended with the prior approval of the Holders of at least
66-2/3% in liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding
Preferred Securities. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders of the Securities
apply to the giving of such approval.
SECTION 9.3. Notices.
All notices provided for in this Guarantee Agreement shall be in
writing, duly signed by the party giving such notice, and shall
be delivered, telecopied or mailed by registered or certified
mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth
below (or such other address as the Preferred Guarantee
Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
Attn: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the
Guarantor may give notice of to the Holders of the
Preferred Securities):
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<PAGE>
Northwestern Public Service Company
33 Third Street, S.E.
Huron, South Dakota 57350
(c) If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the
Issuer.
All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or
other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders
of the Preferred Securities and the Preferred Guarantee Trustee
and, subject to Section 3.1(a), is not separately transferable
from the Preferred Securities.
SECTION 9.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
Northwestern Public Service
Company
By:
---------------------------
Name:
Title:
Wilmington Trust Company,
as Preferred Guarantee Trustee
By:
---------------------------
Name:
Title:
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<PAGE>
Draft: 7/11/95
EXHIBIT 5(A)
July 27, 1995
Northwestern Public Service Company
33 Third Street S.E.
Huron, South Dakota 57350-1318
and
NWPS Capital Financing I
NWPS Capital Financing II
NWPS Capital Financing III
c/o Northwestern Public Service Company
33 Third Street S.E.
Huron, South Dakota 57350-1318
Re: Registration Statement on Form S-3;
Registration No. 33-60423
Ladies and Gentlemen:
We have acted as counsel for Northwestern Public Service Company,
a Delaware corporation ("Company"), and NWPS Capital Financing I, NWPS Capital
Financing II and NWPS Capital Financing III, each a Delaware statutory business
trust sponsored by the Company (individually a "Trust" and collectively the
"Trusts"), in connection with the preparation and filing with the Securities
Exchange Commission ("Commission") of the above-captioned registration statement
on Form S-3 ("Registration Statement") to register under the Securities Act of
1933, as amended ("Act"), $200,000,000 of what are therein (and hereinafter)
called the Offered Securities, for issuance and sale from time to time. The
Offered Securities consist of any one, some or all of the following kinds of
securities, namely:
(i) common stock, par value $3.50 per share, of the Company
("Common Stock");
(ii) the Company's mortgage bonds ("Mortgage Bonds"), to be
issued in one or more series pursuant to the General Mortgage
Indenture and Deed of Trust dated as of August 1, 1993 between the
Company and The Chase Manhattan Bank (N.A.), as Trustee ("New
Mortgage"), as supplemented by a supplemental indenture or indentures
in substantially the form filed as Exhibit 4(a)(17) to the
Registration Statement ("New Mortgage Supplemental Indenture")
providing for the issuance of the series;
<PAGE>
Northwestern Public Service Company
July 27, 1995
Page 2
(iii) the Company's subordinated debt securities ("Subordinated
Debt Securities") to be issued in one or more series under the
indenture ("Subordinated Debt Securities Indenture") to be entered
into between the Company and The Chase Manhattan Bank (N.A.), as
Trustee, in substantially the form filed as Exhibit 4(a)(29) to the
Registration Statement, as supplemented by a supplemental indenture or
indentures in substantially the form filed as Exhibit 4(a)(30) to the
Registration Statement ("Subordinated Debt Securities Supplemental
Indenture") providing for the issuance of the series;
(iv) preferred securities ("Preferred Securities") to be
issued by one or more of the Trusts, as described in the Prospectus
and in the Prospectus Supplement (hereinafter defined) for the
Preferred Securities; and
(v) guarantees of the Preferred Securities ("Guarantees") to
be issued by the Company in substantially the form filed as Exhibit
4(a)(35) to the Registration Statement.
As counsel to the Company and the Trusts, we have examined (i)
the Registration Statement and exhibits thereto, including the prospectus in the
Registration Statement ("Prospectus") and the separate prospectus supplements
therein ("Prospectus Supplements') for the respective Offered Securities and the
indentures, as applicable, and forms of other documents relating to the Offered
Securities; (ii) the Company's restated certificate of incorporation and bylaws,
both as amended; (iii) documents issued by public officials as to the existence
of the Company and the Trusts under the laws of the State of Delaware; and (iv)
such other documents and records of the Company and the Trusts, and such matters
of law, as we considered to be necessary to enable us to render this opinion.
Based on the foregoing, we are of the opinion as follows:
1. The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware.
2. Each of the Trusts has been duly created and is validly existing
in good standing as a business trust under the Business Trust Act of the State
of Delaware.
3. Subject to final approval by the Board of Directors of the
Company (or by the committee or person to whom the Board delegates the authority
to grant such final approval) of (i) the number of shares of Common Stock to be
issued and sold, and the terms of sale thereof (and assuming the sale price is
not less than the $3.50 per share par value of the Common Stock); (ii) the
aggregate principal amount, rate of interest, maturity date and other terms of
each series of the Mortgage Bonds, and the terms of sale thereof and the terms
of the New Mortgage Supplemental Indenture; and (iii) the terms of the Preferred
Securities, Subordinated Debt Securities and Guarantees, as well as the final
terms of the declarations of trust for the Trusts and the terms of sale of the
Preferred Securities and the Subordinated Debt Securities, the Company has duly
and validly authorized the issuance of the Common Stock, the Mortgage Bonds and
the Subordinated Debt Securities, and the execution and delivery of the New
Mortgage Supplemental Indenture, the Subordinated Debt Securities Indenture, the
Subordinated Debt Securities Supplemental Indenture and the Guarantees.
<PAGE>
Northwestern Public Service Company
July 27, 1995
Page 3
4. Subject to paragraph 3 above, shares of Common Stock, when
issued, sold and delivered as contemplated in the Registration Statement and the
Prospectus Supplement applicable to the Common Stock and in accordance with the
authorization thereof by the Board of Directors of the Company (or by the
committee or person to whom the Board delegates such authority), will be legally
and validly issued, fully paid and nonassessable.
5. Subject to paragraph 3 above, upon execution and delivery of the
New Mortgage Supplemental Indenture and the issuance, sale and delivery by the
Company of one or more series of such Mortgage Bonds, as contemplated in the
Registration Statement and the Prospectus Supplement applicable to such Mortgage
Bonds and in accordance with the authorization thereof by the Board of Directors
of the Company (or by the committee or person to whom the Board delegates such
authority), such Mortgage Bonds will be valid, legal and binding obligations of
the Company, enforceable in accordance with their terms, subject to (i) the due
filing of record of the New Mortgage Supplemental Indenture and of any financing
statements relating thereto in the manner prescribed by the laws of the states
of Iowa, Nebraska, North Dakota and South Dakota in order to give record notice
of the New Mortgage Supplemental Indenture with respect to interests in real
estate subject thereto and to perfect security interests in personal property
subject thereto, (ii) the issuance and sale of the Mortgage Bonds before the
intervention of any lien to which the New Mortgage or the New Mortgage
Supplemental Indenture is not expressly made subject, or not expressly excepted
by the New Mortgage, and (iii) the reservations, encumbrances and restrictions
recited in the granting clause of, and as provided in, the New Mortgage or
referred to in the Prospectus included in the Registration Statement under the
subcaption "Security" under the caption "Description of the Mortgage Bonds," and
except as the legality, validity, binding effect or enforceability of the
Mortgage Bonds may be limited or otherwise affected by (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the enforcement of
creditors' rights generally, or (b) the application of general principles of
equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law), or (c) the laws of the states where the
property subject to the New Mortgage is located that affect the remedies for
defaults under, and the enforcement of the lien and security interests provided
for in, the New Mortgage. (No opinion is expressed herein with respect to the
title of the Company to its properties, or the priority of the lien or security
interests of the Mortgage Bonds on such properties now owned or hereafter
acquired.)
6. Subject to paragraph 3 above, Subordinated Debt Securities, when
issued, sold and delivered as contemplated in the Registration Statement and the
Prospectus Supplement applicable to such Subordinated Debt Securities and in
accordance with the authorization thereof by the Board of Directors of the
Company (or by the committee or person to whom the Board delegates such
authority), will be valid, legal and binding obligations of the Company,
provided that (i) the Subordinated Debt Securities Indenture and any necessary
Subordinated Debt Securities Supplemental Indenture or officer's certificate
with respect thereto have been duly executed and delivered by the Company and
the Subordinated Debt Securities Trustee, (ii) the terms of such Subordinated
Debt Securities have been duly established in accordance with the Subordinated
Debt Securities Indenture and any applicable Subordinated Debt Securities
Supplemental Indenture or officer's certificate with respect thereto, and (iii)
such Subordinated Debt Securities have been duly
<PAGE>
Northwestern Public Service Company
July 27, 1995
Page 4
executed and authenticated in accordance with the Subordinated Debt Securities
Indenture and any applicable Subordinated Debt Securities Supplemental Indenture
or officer's certificate with respect thereto. Subject to the foregoing, such
Subordinated Debt Securities will be enforceable in accordance with their terms
against the Company, except as the enforceability thereof may be limited (a) by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
enforcement of creditors' rights generally and (b) the application of general
principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law).
7. Subject to paragraph 3 above, the Preferred Securities will
represent valid and, subject to paragraph 8 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust which issued the same
when (a) the declaration of trust for such Trust has been duly executed by the
Trust's trustees and by the Company as the Trust's sponsor, (b) the Guarantee
applicable to such Preferred Securities has been duly executed and delivered by
the Company to the Guarantee Trustee of such Guarantee as contemplated in
paragraph 9 below, (c) such Preferred Securities have been issued in accordance
with the terms and provisions of such declaration of trust and (d) such
Preferred Securities have been issued and delivered as contemplated by the
Registration Statement and the Prospectus Supplement applicable to the Preferred
Securities.
8. Holders of validly issued Preferred Securities, as beneficial
owners of the Trust which issued 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. We note that holders of Preferred Securities may be obligated to
make payments as set forth in the declaration of trust for such Trust.
9. Subject to paragraph 3 above, each Guarantee issued with respect
to Preferred Securities will be a valid, legal and binding obligation of the
Company, provided (i) such Guarantee has been duly executed and delivered to the
Guarantee Trustee of such Guarantee, (ii) such Preferred Securities have been
issued as contemplated in paragraph 7 above, and (iii) such Guarantee has been
issued and delivered as contemplated in the Registration Statement and the
Prospectus Supplement applicable to the Guarantees. Subject to the foregoing,
such Guarantee will be enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited (a) by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the enforcement of
creditors' rights generally and (b) the application of general principles of
equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
The opinions expressed in paragraphs 4, 5, 6, 7, 8 and 9 are
subject to the Registration Statement becoming effective with no stop order with
respect thereto having been issued by the Commission, and to the order which has
been issued by the Federal Energy Regulatory Commission remaining in effect,
authorizing under Section 204 of the Federal Power Act the issuance of the
Offered Securities on the terms contemplated in the Registration Statement and
the applicable Prospectus Supplements.
<PAGE>
Northwestern Public Service Company
July 27, 1995
Page 5
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the use of our name under the caption "Legal
Opinions" in the Prospectus and the caption "Legal Matters" in the Prospectus
Supplement for the Preferred Securities.
In rendering this opinion, we have relied as to all matters
governed by the laws of the State of Delaware in paragraphs 2, 7 and 8 above
upon the opinions of Richards, Layton & Finger, P.A., special Delaware counsel
for the Company and the Trusts, which are being filed as exhibits to the
Registration Statement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: /s/ James M. Van Vliet, Jr.
---------------------------------------
James M. Van Vliet, Jr.
<PAGE>
Exhibit 5(b)(i)
WP5.1 #596 NWPSI5.15
PMAltman 07/14/95 11:28am
[Letterhead of Richards, Layton & Finger]
July 27, 1995
NWPS Capital Financing I
c/o Northwestern Public Service Company
33 Third Street S.E.
Huron, South Dakota 57350-1318
Re: NWPS CAPITAL FINANCING I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Northwestern Public
Service Company, a Delaware corporation ("Northwestern"), and NWPS Capital
Financing I, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished to
you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of June 19,
1995 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on June 19, 1995;
(b) The Declaration of Trust of the Trust, dated as of June 19,
1995, between Northwestern and the trustees of the Trust named therein;
(c) Amendment No. 1 to the Registration Statement (the
"Registration Statement") on Form S-3, including a preliminary prospectus (the
"Prospectus"), and a preliminary prospectus supplement (the "Prospectus
Supplement") relating to the __% Trust Preferred Capital Securities of the Trust
<PAGE>
NWPS Capital Financing I
c/o Northwestern Public Service Company
July 27, 1995
Page 2
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 Northwestern, the Trust and others as set forth therein
with the Securities and Exchange Commission on July 27, 1995;
(d) A form of Amended and Restated Declaration of Trust of the
Trust, to be entered into among Northwestern, 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 Exhibit A thereto) (the "Declaration"),
attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated July
27, 1995, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (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
Declaration constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Declaration and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in
<PAGE>
NWPS Capital Financing I
c/o Northwestern Public Service Company
July 27, 1995
Page 3
paragraph 1 below, the 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 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 Security
Certificate for such Preferred Security and the payment for the Preferred
Security acquired by it, in accordance with the Declaration and the Registration
Statement, and (vii) that the Preferred Securities are issued and sold to the
Preferred Security Holders in accordance with the Declaration 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 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
<PAGE>
NWPS Capital Financing I
c/o Northwestern Public Service Company
July 27, 1995
Page 4
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 Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We also
consent to Schiff Hardin & Waite's relying as to matters of Delaware law upon
this opinion in connection with an opinion to be rendered by it in connection
with the Registration Statement. In addition, we hereby consent to the use of
our name under the heading "Legal Matters" in the Prospectus Supplement and
"Legal Opinions" 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
PMA/BJK/lds
<PAGE>
Exhibit 5(b)(ii)
WP5.1 #596 NWPSII5.15
PMAltman 07/14/95 11:30am
[Letterhead of Richards, Layton & Finger]
July 27, 1995
NWPS Capital Financing II
c/o Northwestern Public Service Company
33 Third Street S.E.
Huron, South Dakota 57350-1318
Re: NWPS CAPITAL FINANCING II
Ladies and Gentlemen:
We have acted as special Delaware counsel for Northwestern Public
Service Company, a Delaware corporation ("Northwestern"), and NWPS Capital
Financing II, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished to
you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of June 19,
1995 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on June 19, 1995;
(b) The Declaration of Trust of the Trust, dated as of June 19,
1995, between Northwestern and the trustees of the Trust named therein;
(c) Amendment No. 1 to the Registration Statement (the
"Registration Statement") on Form S-3, including a preliminary prospectus (the
"Prospectus"), and a preliminary prospectus supplement (the "Prospectus
Supplement") relating to the __% Trust Preferred Capital Securities of the Trust
<PAGE>
NWPS Capital Financing II
c/o Northwestern Public Service Company
July 27, 1995
Page 2
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 Northwestern, the Trust and others as set forth therein
with the Securities and Exchange Commission on July 27, 1995;
(d) A form of Amended and Restated Declaration of Trust of the
Trust, to be entered into among Northwestern, 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 Exhibit A thereto) (the "Declaration"),
attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated July
27, 1995, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (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
Declaration constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Declaration and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in
<PAGE>
NWPS Capital Financing II
c/o Northwestern Public Service Company
July 27, 1995
Page 3
paragraph 1 below, the 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 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 Security
Certificate for such Preferred Security and the payment for the Preferred
Security acquired by it, in accordance with the Declaration and the Registration
Statement, and (vii) that the Preferred Securities are issued and sold to the
Preferred Security Holders in accordance with the Declaration 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 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
<PAGE>
NWPS Capital Financing II
c/o Northwestern Public Service Company
July 27, 1995
Page 4
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 Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We also
consent to Schiff Hardin & Waite's relying as to matters of Delaware law upon
this opinion in connection with an opinion to be rendered by it in connection
with the Registration Statement. In addition, we hereby consent to the use of
our name under the heading "Legal Matters" in the Prospectus Supplement and
"Legal Opinions" 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
PMA/BJK/lds
<PAGE>
Exhibit 5(b)(iii)
WP5.1 #596 NWPSIII5.15
PMAltman 07/14/95 11:32am
[Letterhead of Richards, Layton & Finger]
July 27, 1995
NWPS Capital Financing III
c/o Northwestern Public Service Company
33 Third Street S.E.
Huron, South Dakota 57350-1318
Re: NWPS CAPITAL FINANCING III
Ladies and Gentlemen:
We have acted as special Delaware counsel for Northwestern Public
Service Company, a Delaware corporation ("Northwestern"), and NWPS Capital
Financing III, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished to
you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of June 19,
1995 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on June 19, 1995;
(b) The Declaration of Trust of the Trust, dated as of June 19,
1995, between Northwestern and the trustees of the Trust named therein;
(c) Amendment No. 1 to the Registration Statement (the
"Registration Statement") on Form S-3, including a preliminary prospectus (the
"Prospectus"), and a preliminary prospectus supplement (the "Prospectus
Supplement") relating to the __% Trust Preferred Capital Securities of the Trust
<PAGE>
NWPS Capital Financing III
c/o Northwestern Public Service Company
July 27, 1995
Page 2
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 Northwestern, the Trust and others as set forth therein
with the Securities and Exchange Commission on July 27, 1995;
(d) A form of Amended and Restated Declaration of Trust of the
Trust, to be entered into among Northwestern, 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 Exhibit A thereto) (the "Declaration"),
attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated July
27, 1995, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (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
Declaration constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Declaration and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in
<PAGE>
NWPS Capital Financing III
c/o Northwestern Public Service Company
July 27, 1995
Page 3
paragraph 1 below, the 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 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 Security
Certificate for such Preferred Security and the payment for the Preferred
Security acquired by it, in accordance with the Declaration and the Registration
Statement, and (vii) that the Preferred Securities are issued and sold to the
Preferred Security Holders in accordance with the Declaration 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 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
<PAGE>
NWPS Capital Financing III
c/o Northwestern Public Service Company
July 27, 1995
Page 4
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 Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We also
consent to Schiff Hardin & Waite's relying as to matters of Delaware law upon
this opinion in connection with an opinion to be rendered by it in connection
with the Registration Statement. In addition, we hereby consent to the use of
our name under the heading "Legal Matters" in the Prospectus Supplement and
"Legal Opinions" 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
PMA/BJK/lds
<PAGE>
7/13/95
EXHIBIT 8
July 27, 1995
Northwestern Public Service Company
33 Third Street S.E.
Huron, South Dakota 57350-1318
and
NWPS Capital Financing I
c/o Northwestern Public Service Company
33 Third Street S.E.
Huron, South Dakota 57350-1318
Re: Registration Statement on Form S-3;
Registration No. 33-60423
Ladies and Gentlemen:
We have acted as special tax counsel for Northwestern Public
Service Company, a Delaware corporation ("Company"), and NWPS Capital Financing
I, a Delaware statutory business trust sponsored by the Company (the "Trust"),
in connection with the preparation and filing with the Securities and Exchange
Commission of the above-captioned registration statement on Form S-3 (the
"Registration Statement"), for the purpose of registering, among other things,
preferred securities (the "Preferred Securities") of the Trust, junior
subordinated deferrable interest debentures of the Company (the "Debentures")
and the Company's guarantee of the Preferred Securities. In connection
therewith, we have participated in the preparation of, and have reviewed, the
Registration Statement, including the prospectus therein (the "Prospectus") and
the form of prospectus supplement for the Preferred Securities (the "Prospectus
Supplement") included therewith.
We have examined and relied upon the Registration Statement and,
in each case as filed with the Registration Statement, (i) the form of
subordinated debt securities indenture (the "Indenture") between the Company and
The Chase Manhattan Bank (N.A.), as trustee, (ii) the form of supplemental
indenture to be used in connection with the issuance of the Debentures (the
"Supplemental Indenture") which are to be purchased with the proceeds from the
sale of the Preferred Securities, which Supplemental Indenture includes the form
of the Debentures, (iii) the form of declaration of trust for the Trust (the
"Declaration") which includes the form of the Preferred Securities to be issued
under the Declaration, (iv) the form of the Company's guarantee with respect to
the Preferred Securities, and (v) certain other relevant documents used in
connection with the issuance of the Debentures and the Preferred Securities
(collectively, the "Operative Documents").
<PAGE>
Northwestern Public Service Company
July 27, 1995
Page 2
Based on the foregoing and assuming that the Operative Documents
are executed and delivered in substantially the form we have examined and that
the transactions contemplated to occur under the Operative Documents in fact
occur in accordance with the terms thereof, we hereby confirm that, in all
material respects, the discussion in the Prospectus Supplement under the heading
"United States Federal Income Taxation" is a fair and accurate summary of the
matters addressed therein, based upon current law and the assumptions stated or
referred to therein. There can be no assurance that contrary positions may not
be taken by the Internal Revenue Service.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the use of our name under the caption "United
States Federal Income Taxation" in the Prospectus Supplement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: /s/ James M. Van Vliet, Jr.
-----------------------------------
James M. Van Vliet, Jr.
<PAGE>
NORTHWESTERN PUBLIC SERVICE COMPANY
STATEMENT OF COMPUTATION
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
1994
---------------------------
1990 1991 1992 1993 Actual Pro Forma
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR FIXED CHARGES
Net Income per Statement of Income $17,506,083 $14,814,596 $13,721,406 $15,191,073 $15,440,208 $17,463,208
Add:
Income taxes 6,842,233 7,515,841 5,837,513 7,568,119 7,869,343 7,182,343
Interest on long-term debt 6,562,261 7,008,597 7,812,724 8,404,321 8,823,085 13,280,585
Amortization of debt expense and
other interest 289,109 419,498 450,431 590,408 885,742 918,242
One-third of all rentals (estimated
to be representative of the
interest component) 47,639 36,441 34,489 31,705 39,759 39,759
----------- ----------- ----------- ----------- ----------- -----------
Earnings available for fixed charges 31,247,325 29,794,973 27,856,563 31,785,626 33,058,137 38,884,137
----------- ----------- ----------- ----------- ----------- -----------
FIXED CHARGES
Interest on long-term debt 6,562,261 7,008,597 7,812,724 8,404,321 8,823,085 13,280,585
Amortization of debt expense and
other interest 165,347 246,063 302,294 590,408 885,742 918,242
One-third of all rentals (estimated
to be representative of the
interest component) 47,639 36,441 34,489 31,705 39,759 39,759
----------- ----------- ----------- ----------- ----------- -----------
Total fixed charges 6,775,247 7,291,101 8,149,507 9,026,434 9,748,586 14,238,586
----------- ----------- ----------- ----------- ----------- -----------
Preferred dividends 384,518 370,081 143,267 121,463 119,868 2,162,868
Effective tax rate 28% 34% 30% 33% 34% 29%
----------- ----------- ----------- ----------- ----------- -----------
Pre-tax equivalent preferred dividend
requirement 534,053 560,729 204,667 181,288 181,648 3,046,321
----------- ----------- ----------- ----------- ----------- -----------
Total fixed charges, including
preferred dividends 7,309,300 7,851,830 8,354,174 9,207,722 9,930,234 17,284,907
----------- ----------- ----------- ----------- ----------- -----------
Ratio of earnings to fixed charges 4.61 4.09 3.42 3.52 3.39 2.73
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Ratio of earnings to fixed charges,
including preferred dividends 4.28 3.79 3.33 3.45 3.33 2.25
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
Three Months Ended
March 31, 1995
---------------------------
Actual Pro Forma
----------- -----------
<S> <C> <C>
EARNINGS AVAILABLE FOR FIXED CHARGES
Net Income per Statement of Income $7,102,634 $13,839,634
Add:
Income taxes 3,754,254 3,248,254
Interest on long-term debt 2,211,119 3,325,994
Amortization of debt expense and
other interest 433,929 442,054
One-third of all rentals (estimated
to be representative of the
interest component) 9,036 9,036
----------- -----------
Earnings available for fixed charges 13,510,972 20,864,972
----------- -----------
FIXED CHARGES
Interest on long-term debt 2,211,119 3,325,994
Amortization of debt expense and
other interest 433,929 442,054
One-third of all rentals (estimated
to be representative of the
interest component) 9,036 9,036
----------- -----------
Total fixed charges 2,654,084 3,777,084
----------- -----------
Preferred dividends 29,775 540,775
Effective tax rate 35% 19%
----------- -----------
Pre-tax equivalent preferred dividend
requirement 45,808 667,623
----------- -----------
Total fixed charges, including
preferred dividends 2,699,892 4,444,707
----------- -----------
Ratio of earnings to fixed charges 5.09 5.52
----------- -----------
----------- -----------
Ratio of earnings to fixed charges,
including preferred dividends 5.00 4.69
----------- -----------
----------- -----------
</TABLE>